Download the 2010 OC’s WEALTHIEST List (pdf)
Rebounding technology and other fortunes drove a gain in the estimated value of OC’s Wealthiest in the past year.
The 32 richest people here saw an estimated 8% rise in wealth in the past 12 months to a collective worth of $40 billion, according to this week’s Business Journal list.
Much of the gain was a bounce off the bottom for a handful of those whose wealth is tied to technology, echoing a 15% gain in the tech-heavy Nasdaq in the past 12 months.
In other cases, a homebuilder and auto dealer saw a rise as their businesses came back from the dead.
Even with the overall gain, the list paints a picture of a transition year.
Nearly all real estate owners on the list are estimated to have seen further declines in wealth as the industry continues to struggle with lender takeovers, vast amounts of empty space and lower valuations and rents.
That’s a continuation of the trend that prevailed on our 2009 list, when the wealthiest here were estimated to have seen a 10% drop in their wealth from 2008.
The added wealth on this year’s list comes from a group of technology company owners.
The biggest gainers are estimated to be David Sun and John Tu, co-owners of Fountain Valley-based Kingston Technology Co., the largest maker of memory products for computers and consumer electronics.
They’re pegged to have seen a 57% gain to $2.75 billion each with a rebound in prices for memory chips and the economy.
2010 sales are on track to grow by about 45% to roughly $6 billion, which would be a record for the company.
Kingston is getting a boost from higher memory chip prices, which have nearly doubled from their depressed level of a year earlier. Prices and profits on Kingston’s products move in tandem with memory chip prices.
Shares of two publicly traded rivals, Fremont-based Smart Modular Technologies Inc. and Milpitas-based SanDisk Corp., have doubled or more in the past 12 months.
Sun and Tu, who tied for the list’s No. 3 spot, made up half of the added wealth on this year’s list.
Other Tech Gains
The rest of the gain is attributable to some other techies.
No. 5 Henry Samueli, cofounder and chief technology officer of Irvine chipmaker Broadcom Corp., is estimated to have seen a 28% rise in his wealth with a gain in the company’s shares.
About half of Samueli’s wealth is from Broadcom shares, which are up about 40% in the past 12 months.
No. 6 Henry Nicholas, Broadcom’s cofounder and former chief executive, also is estimated to have gained based on his Broadcom shares.
Vincent “Vinny” Smith, executive chairman of Aliso Viejo-based Quest Software Inc. and No. 15 on the list, saw an estimated 47% rise in his wealth with a bounce in Quest shares and a re-evaluation of his wealth on our part to $625 million.
Beyond tech, one of the biggest estimated gainers was No. 13 William Lyon, chairman and chief executive of Newport Beach-based homebuilder William Lyon Homes Inc.
The general, as the former Air Force Reserve commander is known, is pegged to be up 10% to $775 million with improving fortunes in the homebuilding industry.
Shares of publicly traded rivals—particularly those that have cleaned up their balance sheets—are up 5% to 40% in the past 12 months.
No. 14 Ronald Simon, founder and chairman of Newport Beach-based RSI Holding Corp., is estimated to have seen an 8% rise to $650 million.
The gain is based on a jump in shares of building products companies and homebuilders in the past 12 months.
RSI makes household cabinets, while an offshoot of the company builds affordable, easily assembled homes.
The youngest of OC’s Wealthiest, No. 18 Lynsi Martinez, is estimated higher based on her company’s expansion plans and its downturn-proof, cult-like following.
Martinez is president and owner of Irvine-based In-N-Out Burgers Inc. The 28-year-old is set to inherit all of the company in few years time, though we assign all of its wealth to her based on the ability to get financing based on her inheritance.
We estimate Martinez at $475 million, up 12%.
Others, primarily in real estate, were estimated to have seen declines in their wealth.
No. 8 Igor Olenicoff, owner, founder and president of Newport Beach-based Olen Properties Corp., is pegged down 18% to $1.4 billion based on his exposure to hard hit markets in Arizona, Nevada and Florida.
Even so, Olenicoff’s company, which owns offices, apartments and land, is considered to have weathered the downturn better than many.
No. 9 George Argyros, owner, chairman and chief executive of Costa Mesa-based Arnel & Affiliates, is estimated down 16% to $1 billion.
Argyros owns apartments, offices and shopping centers that are presumed to have lost some value in the past 12 months. He also saw a decline in his key stock holdings.
No. 1 Donald Bren, the list’s biggest real estate owner, was left unchanged from a year ago at $12 billion.
We expect our estimate for Bren to be a point of debate for readers, as it was for us. We heard persuasive arguments from credible sources on why Bren should be valued lower.
By keeping Bren flat, some may see us as treating Bren differently than other real estate owners on the list. We are. Our rationale is outlined on page 22.
In sum, we found it hard to value Bren at less than $12 billion based on the holdings of his Newport Beach-based Irvine Company, its low debt and recent home sales that imply rising values for company land from a year ago, when the worth of any land questionable.
We also assume that the biggest hit to Bren’s wealth already played out in 2008 and early 2009. In years past, we’ve said Bren could be worth as much as $15 billion to $20 billion. Now the downturn seems to have brought his wealth closer to our estimate.
Newcomers
The list includes some newcomers and returnees from prior lists.
No. 25 Pawan Seth, a drug developer, debuts on OC’s Wealthiest after years on our list of Other Centimillionaires, which includes those estimated to be worth at least $100 million.
Seth, who holds several patents, is estimated at $300 million, though sources tell us he could be worth more.
No. 29 Robert Hoff, an Irvine general partner at Silicon Valley venture capital firm Crosspoint Venture Partners, returns to OC’s Wealthiest after several years off the list.
He returns based on input from sources who tell us he should be there. Hoff is estimated at $250 million.
William Wang, founder and chief executive of Irvine TV seller Vizio Inc., rounds out the list with a tie for the No. 29 spot at an estimated $250 million.
Methodology
To come up with our list, we’ve spent weeks looking into individual holdings, company assets, public records and press clippings and talking with trusted sources.
Our estimates include the value of stocks, real estate and other assets held by individuals after debt and other factors. It includes shares or other assets held in family trusts or family corporations controlled by an individual.
Like the Forbes 400 and similar listings, our numbers are conservative, ballpark figures. We’ve sought to catalog assets, factor in debt and taxes and determine the cost of exercising stock options and other expenses.
Our list isn’t all-inclusive. We’ve done our best to track down who we believe are OC’s Wealthiest. But we know we’ve missed many. We look forward to comments on our list and those we may have missed.
