This Nvidia Cofounder Could Have Been Worth $70 Billion. Instead He Lives Off The Grid

If Curtis Priem, Nvidia’s first CTO, had held onto all his stock, he’d be the 16th richest person in America. Instead, he sold out years ago and gave most of his fortune to his alma mater Rensselaer Polytechnic Institute.

By Phoebe Liu, Forbes Staff

Curtis Priem wanders across a wooden stage before coming to a standstill a few feet right of center. It’s one of the “acoustic sweet spots” in the 1,165-seat Rensselaer Polytechnic Institute concert hall that the Nvidia cofounder donated $40 million to construct between 2003 and 2008. Bathed in warm stage lights, Priem, 64 and dressed in suit and red tie, gestures toward the thousands of uniquely curved wood panels lining the walls and tightly-woven fabric specifically tuned for air permeability and mass on the ceiling—all built for ideal acoustics. “This is the most technically advanced performance space in the world,” the electrical engineer beams, describing the Troy, NY, venue that is named after him: the Curtis Priem Experimental Media and Performing Arts Center.

It’s part of a much bigger commitment to his alma mater that most recently includes helping it become the first university in the world to house an IBM Quantum System One computer. Expected to be operational by next spring, it will be the cornerstone of a new computational center that will hopefully help RPI and the surrounding area attract top talent.

Since 2001, Priem has given $275 million to RPI, accounting for 40% of RPI’s total gifts during that period, and he’s pledged approximately $80 million more. Only half that amount has ever been publicly acknowledged as gifts from Priem. An anonymous pledge of $360 million was announced by RPI in 2001 around the time Priem started giving, but neither he nor the school would comment on whether he is the donor.

What’s even less known is Priem’s own story. An inventor who has almost 200 patents, he helped design the first graphics processor ever for PCs in the early 1980s and later cofounded semiconductor firm Nvidia, where he spent a decade working as its first chief technology officer.

Following Nvidia’s 1999 IPO, he transferred most of his shares to a charitable foundation, after deciding it was an “excessive amount of money” to hold onto. A few years later he left the company, in part due to a highly litigious first marriage that ended in divorce and domestic violence allegations against his ex-wife. By 2006 he’d sold off his remaining shares. Had he held onto his entire stake, he’d be worth $70 billion. Instead, Forbes estimates that Priem has a fortune that’s closer to $30 million, just over one tenth of what he’s given to RPI.

That includes a $6 million home near Fremont, California where he lives off the grid with unreliable cell service and writes “manifestos” filled with equations about how to solve world problems like “repairing the earth.” (None have been published anywhere). He says he often communicates by giving out unique email addresses—sixteen-digit strings of numbers including one given to this Forbes reporter, as a way of avoiding spam (he says he hasn’t gotten any since 2000). He also owns a Gulfstream G450 private jet, named Snoopy, that he bought in 2021 and now uses to fly to RPI four times a year.

In an interview on RPI’s campus in the historically blue-collar town of Troy, NY, Priem opens up about his donations, why he left Nvidia and a few regrets. “I did a little crazy thing, and I wish I’d kept a little bit more [Nvidia shares],” admits Priem, who says he still thinks of Nvidia twice a day—when he puts on and takes off his Omega Speedmaster X-33 Mars watch, the same model worn by Thunderbirds and Space Shuttle astronauts; it was a gift from Nvidia on his fifth company anniversary. For him, RPI has become the place not only to put his money but also to find meaning and solace. “Hell was happening for me on the outside, and [RPI] was actually my retreat,” says Priem of his work with RPI, where he has served on the board of trustees since 2003. “It became my purpose and my sanity.”

Priem chose RPI over the better-known Massachusetts Institute of Technology thanks in part to it having a fancy IBM computer he wanted to use. It turned out to be an ideal place for Priem, who had always been interested in the intersection of technology and the arts. In high school, after moving “all over the east coast” as a child, his family settled outside Cleveland, where Priem took cello lessons with the Cleveland Orchestra’s Donald White, the first Black musician to play in a major orchestra, and spent two summers at an intensive camp for classical musicians in North Carolina. He also played the trombone. At RPI, he played cello in its orchestra all four years, and credits much of his creativity in the electronics industry and his work at RPI to his musician upbringing. “To perform, you have to practice, right? And you have to be creative,” Priem says. “So I started applying that to electronics and computer science.”

He graduated from RPI with a degree in electrical and computer engineering in 1982, and went to work as a staff engineer for PC company Vermont Microsystems, followed by a stint as a hardware engineer at electronic test equipment firm GenRad. He later moved to California to work at Sun Microsystems for seven years.

The idea for Nvidia was hatched in 1993 at a Denny’s in Silicon Valley. That’s where he, his Sun Microsystems colleague Chris Malachowsky and their friend Jensen Huang, an engineer who worked at LSI Logic, would meet up to brainstorm how to build a better chip. Priem describes his role early on as the architect creating the underlying blueprint that allowed engineers to design algorithms for Nvidia’s chips, working mostly behind the scenes. “There was a saying at Nvidia to never put Curtis in front of a camera, and never put Curtis in front of a customer,” Priem quips. (CEO Huang’s response: “Curtis was actually excellent with customers.”)

In 1999, Nvidia had two major breakthroughs: It went public with a $1.1 billion market capitalization and it invented its graphics processing unit, or GPU, which was initially used for video editing and gaming but eventually reshaped the computing industry. That July Priem also married his first wife, Veronica, and two months later, established the Priem Family Foundation in which he put more than three quarters of his 12.8% (at IPO) Nvidia stake–about 100 million shares (in today’s share count). Part of the reason for the big gift, he said, was that he didn’t want the government to get the money if he had sold a bunch of shares and owed taxes on them.

It was also around that time that Priem looked at his shareholding and thought he’d end up with around $50 million. “My saving grace was that I couldn’t predict the future,” he says somewhat wistfully about his decision to sell off shares in the now $1.2 trillion (market cap) company.

After initially donating to a handful of causes including The Nature Conservancy and the Monterey Bay Aquarium, Priem shifted away from his goal of alleviating human-induced suffering to preventing it, mostly through education-focused giving. “Adam and Eve had free will and chose a sinful path which originated suffering … our belief is that most suffering can be avoided since it is within our control to begin with,” stated his foundation’s early website, drawing on his family’s roots in the United Church of Christ (Priem doesn’t practice the religion, but his father, sister and grandparents were all ministers, he says).

In 2000, Priem went back to RPI to receive the university’s Entrepreneur of the Year Award for his work at Nvidia. “I walked onto campus, and it’s like, okay, this is sort of my calling,” Priem says. He says he donated $1 million to RPI in 2000 and again in 2001. Then in the fiscal year ending in June 2002, the Priem Family Foundation began disbursing at least $10 million a year to RPI—and has done so ever since.

More than 40% Of Gifts to RPI Since June 2001 Have Come From The Priem Foundation

Things at Nvidia, meanwhile, weren’t going as well. According to Priem, he was distracted by personal issues at home and not contributing at the level he wanted, so he left.

The next decade of Priem’s life was a mess, he says—a court found that Veronica had a “history of domestic violence” against him. He alleged in 2013 court filings that the violence had “generated 19 written police reports, five arrests, three criminal convictions, three criminal protective orders, one civil temporary restraining order, and three probationary periods.” According to the same document, Veronica claimed that Curtis “triggered her violent reactions by provoking her verbally” and mentioned a “lack of severity associated with her misconduct.” (Her lawyer did not respond to multiple requests for comment.) At one point, Curtis Priem says he met with California state senator Bob Wieckowski to advocate for an amendment that would make it harder for alleged perpetrators of domestic violence to receive spousal support. The amendment, SB 28, passed unanimously in a 2015 Senate vote. His ex-wife pleaded no contest to a misdemeanor charge of domestic violence, and he never paid spousal support.

Throughout this time, Priem continued to help RPI, which he said had financially “floundered” for decades. He wanted to help “turn this super tanker around.” First, his donations went to the essentials—hiring more faculty, building renovations and acquiring lab equipment. Then came contributions to what’s now the Shirley Ann Jackson Center for Biotechnology and Interdisciplinary Studies and to the performing arts center, which opened in 2008.

The idea for his biggest contribution yet came just months ago at a board retreat in Carlsbad, California. That’s where Priem suggested to RPI’s new president Martin Schmidt that they try to bring a quantum computer to RPI, an interesting idea but one Schmidt thought would be too costly.

“We left Carlsbad with me agreeing that I would drive down to see Dario Gil, the head of IBM research … to see if we could convince him that IBM should put a quantum computer on the RPI campus,” Schmidt told Forbes. Just three months later, in June, RPI formally announced plans to bring an IBM Quantum System One computer to campus next year, which will make it the only university in the world to house one.

“Now, with quantum computers, RPI will be at the forefront of ushering in a completely new paradigm of computing that offers profound possibilities for the exploration of a range of previously intractable problems across areas such as material design, sustainability, pharmaceutical development, healthcare and much more,” Gil said at an October groundbreaking event for the quantum computer.

Priem’s latest $95 million pledge to bring the computer to campus and set up a new center for it is, in his words, setting his foundation on the “glide path to zero.”

“This weekend is actually the termination of our foundation,” Priem said at the groundbreaking event, where he explained to a packed crowd of students, faculty, alumni and other guests that his funding for the computer would be his foundation’s last major gift and use up most of its remaining funds. He made the announcement standing in front of a gleaming “quantum chandelier,” the heart of the forthcoming quantum computer because it contains the quantum chip and is surrounded by intricate gold wiring to keep the 2,000-pound computer cold enough to operate, at around -460 degrees Fahrenheit. The computer is expected to be operational sometime in spring 2024 and will sit under four stained-glass windows in a former chapel.

Priem’s family foundation currently has $160 million in assets and is on track to wind down by 2031, he says, but he isn’t sure the money will last that long, given all the new initiatives he keeps deciding to fund at RPI. “We can’t stop spending, so it’ll probably be a lot sooner than that,” says Priem, who adds that “when the money runs out, I get to retire.”


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Meet The Iranian-Born Billionaire Helping NASA Get Back To The Moon

Kam Ghaffarian isn’t a household name. But unlike Elon Musk and Jeff Bezos who made fortunes elsewhere first, Ghaffarian actually got rich by shooting for the stars. His long-term plan? The first for-profit space station, opening by 2031.

By Giacomo Tognini, Forbes Staff

Less than 24 hours before jetting off to the Middle East and South Korea to meet investors, Kamal Ghaffarian has found a couple of hours in his schedule. Taking off his jacket, he settles into a chair in his office, a nondescript, four-story building in suburban Maryland. He asks: “Did you hear people call me ‘crazy Kam’?”

It’s a fair question. The list of companies Ghaffarian has founded reads like the pages of a science fiction novel: Axiom Space is building the world’s first commercial space station in partnership with NASA and also designed the next generation of astronaut spacesuits. (“The next time you see astronauts walking on the surface of the moon, they will be wearing Axiom Space spacesuits,” he adds.) Intuitive Machines builds lunar landers and will send one to the moon’s south pole in January (weather permitting), one of several launches it is planning that will open the moon up to commercial missions. Quantum Space is creating a space “superhighway” that will help spacecraft refuel and travel in the region between the Earth and the moon. And back down on this planet, X-Energy is making small, advanced (and meltdown-proof) nuclear reactors that can power everything from a remote military base to Dow’s 4,700-acre chemicals plant on the Texas Gulf Coast.

Crazy, indeed. But all the businesses have a common goal, according to Ghaffarian. “We need to be a multi-planetary species and also be able to go to other stars. But until then, we only have one home, right?” he says, adding, with a chuckle: “If you sort of summarize everything, [we need to] take care of our existing home and find a new home.”

The space industry is dominated by larger-than-life moguls who have poured money into rockets, rovers and rides into orbit. But, unlike Elon Musk, Jeff Bezos and Richard Branson, Ghaffarian, 65, is a rare example of someone who is a billionaire largely because of his space pursuits, rather than one who got into it after making his fortune. The key to that success? Culture, culture, culture, he says. But in a $546 billion business that’s still driven by the U.S. government, according to the nonprofit Space Foundation, it’s actually contracts, contracts, contracts.

“No one is better than Kam Ghaffarian at winning, on a competitive basis, dollars from the U.S. government,” adds J. Clay Sell, the CEO of X-Energy and a former deputy secretary of the U.S. Department of Energy.

Uncle Sam isn’t the only game in town, of course. Ghaffarian already has a laundry list of commercial clients, including the Cedars-Sinai health system (for stem cell research in microgravity), champagne producer G.H. Mumm (bubbly designed to be tasted in space) and Japanese conglomerate Mitsui, which also has a partnership with Axiom Space. Then there’s foreign governments, such as Canada and Saudi Arabia, plus individuals who will pay to access space: the firm already completed two successful, all-private crewed missions to the International Space Station (ISS) with Musk’s SpaceX in April 2022 and last May, with the first featuring three commercial astronauts and the second hosting two Saudi astronauts. As of August, the company claimed to have secured more than $2.2 billion in customer contracts.

That track record has helped him win over investors. In August, Axiom Space raised an additional $350 million in a funding round led by Saudi Arabia’s Aljazira Capital and South Korean pharma outfit Boryung; the firm is valued at $2.1 billion, according to filings from another backer, ARK Invest. That same month, Intuitive Machines—which listed on Nasdaq through a blank check firm in February—closed on a $20 million private investment, shoring up its finances after a rocky debut as a public company. X-Energy, which counts Dow and private equity outfit Ares Management as investors, was valued at roughly $1.1 billion in September. The newest, and smallest, part of his fortune is Quantum Space, which raised $15 million in December. Altogether, Forbes estimates Ghaffarian is worth $2.2 billion, thanks mostly to his stakes in his space and nuclear startups. Not bad for an Iranian immigrant who landed in Washington, D.C. in 1976 with a $2,000 loan from his uncle to attend college.

“People think of Bezos, Musk, Branson and rightly so,” explains Chris Stott, the founder and CEO of Lonestar Data Holdings, which is partnering with Intuitive Machines to store data on the lunar surface. “They should also tack Kam Ghaffarian onto that list because he’s doing as much, and he’s been quite smart because he’s leveraging everything Jeff and Elon are doing.”

Ghaffarian may be an asteroid in a big galaxy compared to the likes of Musk and Bezos, who are deploying billions of dollars. But he sees those magnates not as competition so much as partners: “I have a great deal of respect for Elon and [SpaceX president] Gwynne Shotwell, they’re awesome friends. Jeff Bezos, the same,” he says.

Like these other better-known space entrepreneurs, Ghaffarian has much bolder plans. The immediate goal of building the first ever commercial space station and the lunar landers is to lower the costs of entry into space, much in the same way that SpaceX’s reusable rockets made it cheaper, easier and faster to launch missions. Think of a Tom Cruise flick shot on an actual space station or drug development in zero gravity—both of which Ghaffarian’s companies are helping turn into reality.

No one is better than Kam Ghaffarian at winning, on a competitive basis, dollars from the U.S. government.

But that’s just the start. Longer term, he says: “Our ultimate destiny is for the human race to become interstellar.”

The first step is low Earth orbit, meaning the space station. Then the moon, with landers and a human outpost. And then? “Technologies that can go beyond our solar system.”

Ghaffarian’s out-of-this-world dreams date back to his childhood in the ancient city of Isfahan, Iran, where he loved to gaze at the stars. On the night of July 20, 1969, the then-11-year-old huddled around the black-and-white TV in his neighbor’s home and watched as Neil Armstrong and Buzz Aldrin became the first human beings to walk on the moon. “It was really a transformational moment,” he recalls. “That really triggered for me that this is what I wanted to do.”

The last American mission to the moon was in 1972. Four years later, Ghaffarian flew to Washington D.C. to study at the Catholic University of America with a $2,000 loan from his uncle. At night, he would park cars in downtown D.C. to repay that debt while finishing a double degree in computer science and engineering. Ghaffarian graduated in 1980—one year after the Iranian revolution—and never looked back.

His first job out of college was at Virginia-based IT firm Compucare, all while continuing his studies with a degree in electronics engineering and a master’s in information management. Ghaffarian’s first foray in the space industry came in 1983 when he got a gig at aerospace giant Lockheed, later moving onto Ford Aerospace, where he continued to work on contracts for NASA and the federal government. Then, in 1994, he struck out on his own with Harold Stinger, whom he’d met at Lockheed. The pair founded a company called Stinger Ghaffarian Technologies with the help of a federal program that helps minority-owned businesses. Their first office was in Ghaffarian’s basement.

“We decided to open our own company doing the same thing, basically the government contracting business,” he says. “I mortgaged a house and got $250,000 that I put together, and that’s how we got started.”

By 2006, SGT had become the 20th largest contractor for NASA with $100 million in contracts to provide engineering services and mission support. Three years later, he bought out Stinger’s stake. “He has a skill set for government contracting,” says Chris Quilty, the founder and co-CEO of space market research firm Quilty Space. “And since this is intrinsically a government market, that is a very important skill set to have.”

Another skill: his ability to coax NASA veterans to join him in the private sector. Ghaffarian’s companies are stacked with at least 18 ex-NASA rockstars, bringing a wealth of government experience but also convincing investors that they can succeed in an increasingly crowded market. In 2013, he teamed up with Stephen Altemus—the former deputy director of NASA’s Johnson Space Center in Houston, which led the Apollo landings on the moon—to launch Intuitive Machines. Three years later, he convinced Michael Suffredini, who managed NASA’s International Space Station program for a decade, to join him in founding Axiom Space.

“I called him and said, ‘Kam, the only thing I know how to do is build and operate a space station,’” Suffredini says of a phone call he had with Ghaffarian soon after leaving NASA. “He said, ‘okay, let me think about that.’ He called back the next day and said, ‘let’s go build a space station.’”

“It’s the most important component and it clearly is a competitive advantage,” says Kurt Scherer, managing partner at Washington, D.C.-based investment firm C5 Capital, which invested in both Axiom Space and his nuclear reactor firm X-Energy, which Ghaffarian founded in 2009.

Ghaffarian’s track record of winning contracts from NASA—he claims that SGT had a win ratio of 80%, compared to an industry average below 50%—helped Axiom Space and Intuitive Machines clinch major bids, from the spacesuits to the commercial lunar program. “This ability to bid on contracts and succeed is our secret sauce,” he adds. Even X-Energy is active in space: Last year, a joint venture with his Intuitive Machines won a $5 million contract from NASA and the Department of Energy to design a portable nuclear reactor for the lunar surface.

All of these projects require investment. That’s why Ghaffarian sold SGT in 2018 to publicly traded KBR for $355 million, giving him the cash to push his other ventures forward. “There are times that I think maybe I shouldn’t have sold, because SGT was an incredible cash flow business. But these are technology companies,” he says, pointing to Axiom Space, Intuitive Machines and X-Energy. “You’ve got to pour a lot of money into them.”

Seed funding only goes so far in space, and Ghaffarian managed to sway deep-pocketed investors to commit the funds needed to get those businesses off the ground. “Kam is one of the very few people who has the ability to see a big, bold, ambitious future and is able to get a lot of people to believe in that vision,” says Dakin Sloss, the founder and general partner of Jackson, Wyoming-based VC firm Prime Movers Lab, which has invested in both Axiom Space and Quantum Space.

Public markets haven’t been as kind as private backers. X-Energy terminated its SPAC merger with Ares Acquisition Corp. in October, a month after revising its valuation downwards by 42%. Intuitive Machines’ stock has fallen 70% since its stock market debut, as investors priced in delays to the firm’s first lunar launch. Initially scheduled for November—which would have made Ghaffarian the first to bring America back to the moon since 1972—it was pushed back to January due to “pad congestion” at Cape Canaveral. (Another U.S. company, Astrobotic, has its own lander that’s expected to launch on Christmas Eve, potentially beating Ghaffarian to the punch.)

And the competition is fierce across the board: In the nuclear industry, Bill Gates’ TerraPower, which is making a pilot reactor larger than X-Energy’s, also won a Department of Energy contract at the same time as Ghaffarian’s firm in 2020. In the realm of space stations, Axiom Space will also have to contend with Bezos’ Blue Origin and Sierra Space—founded by billionaire couple Eren and Fatih Ozmen—plus industry titans Lockheed Martin and Northrop Grumman, which are partnering with Denver-based Voyager Space, and other startups including crypto billionaire Jed McCaleb’s Vast. And besides Astrobotic and Blue Origin, Japanese startup iSpace is planning a second mission to the moon in 2024 after its first lander crashed into the lunar surface last April due to a software glitch.

Ghaffarian isn’t worried, envisioning a future where there’s more than enough business to go around for multiple small nuclear reactors, space stations and firms ferrying payloads to the moon. “Competition is healthy. It makes you more creative and innovative,” he says. His investors agree: “We want to encourage competitors because this is going to be a growing market,” adds C5 Capital’s Scherer.

The most ambitious Ghaffarian project is the Limitless Space Institute, a nonprofit that he says he came up with when he was at home meditating and thinking about the universe. (“What drives me is my spirituality and trusting God,” he says.) Based in Houston, the institute—also led by NASA veterans—partners with schools and universities and funds research into technologies that could one day enable interstellar travel, ranging from fusion-powered spacecraft (theoretically possible, but far from being a reality) to “space drives, wormholes and space warps” (still entirely conceptual).

Ghaffarian likely won’t be around if any of those happen. But he does envision a near-term future where humans live full-time on a space station and the moon. The next step in that vision is the Intuitive Machines launch to the moon in January. Then comes Axiom Space’s next astronaut mission, also scheduled for early next year. The first section of the new space station is expected to attach to the ISS in 2026—Axiom Space is the only company that can connect its modules there—with the whole structure up and running by 2031, when the ISS will be retired.

“When you talk about 10, 15, 20 years from now, my hope is that we have a space city, a place where people can actually go and live,” he says. “That would be a really nice building block toward further space exploration for human beings.”

To Ghaffarian, the motivation for building a space station and lunar landers was never just to get rich—even though his investments in them have helped make him very wealthy.

“I didn’t want to be the richest man in the cemetery and I didn’t want my life to be just about making more money,” he says, reflecting on when he sold his first business. “I wanted my life to be more about making a difference, changing the world for the better.”


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Controversial Philanthropic Donor-Advised Funds Got Record Donations Last Year

Over the last few years, donor-advised funds, or DAFs, have ballooned in popularity as charitable giving vehicles for the ultra-wealthy. They come with generous tax benefits, have few disclosure or payout requirements and require less oversight on the donor’s part because the funds are sponsored by public charities that help manage them (and technically have final say over where the money goes). A new report released Tuesday by National Philanthropic Trust, one of the country’s biggest sponsors of DAFs with $30 billion in assets under management, shows just how much DAF adoption has grown, with record highs for both grants paid out and contributions received last year.

In 2022, contributions to DAFs throughout the U.S. hit a new high of $86 billion, a $8 billion increase from the prior year. Charitable gifts paid out by DAFs also hit a new high of $52 billion, up from $48 billion in 2021, according to the National Philanthropic Trust (NPT) report. The study looked at 1,151 charitable organizations that sponsor DAFs, and data is sourced primarily from the IRS Form 990, the annual information return that 501(c)(3) charities are required to file. Assets held in DAFs shrunk to $229 billion in 2022 from $231 billion the year before, largely due to a stock market downturn (it’s common for donor-advised funds to hold shares of publicly-traded stock).

“This is the most interesting report we’ve had in a long time,” says Eileen Heisman, CEO of National Philanthropic Trust. “It comes on the heels of two really aggressive years of growth and grantmaking. During the pandemic, and when the market was up, people were at home thinking about the world and what they wanted to do about it.” The 2022 report reflects the market correction after its 2021 boom, and Heisman says she’s pleasantly surprised that grants and contributions are both still up from 2021—and that assets held in DAFs only shrunk by around 1%.

DAF usage is especially common among the ultra-wealthy. Many billionaires including Tesla CEO and the world’s richest person Elon Musk, Google cofounder Larry Page, Meta cofounder Mark Zuckerberg, WhatsApp cofounder Jan Koum, philanthropist MacKenzie Scott and hedge fund tycoon Ray Dalio route some of their giving through the tax-advantaged entities. (Of the high-net-worth individuals surveyed in a 2023 Bank of America report on Charitable Giving by Affluent Households, tax considerations were their top reason for using DAFs, with 63% of them citing them as a reason.)

Page, notably, has one of the world’s biggest private family foundations, the Carl Victor Page Memorial Foundation (named after his late father), with $6.7 billion in assets per its latest filing in 2021. But nearly all of the money that foundation gives away goes to DAFs. In the last decade, Page’s foundation has funneled more than $700 million into three DAFs: one at NPT, one sponsored by Vanguard and one sponsored by Schwab, according to IRS filings. Once those assets moved into Page’s DAFs, the public has no visibility into whether they were actually paid out. As a result, it’s not clear which nonprofits Page is ultimately backing—if he’s supporting any at all. A representative for Page did not yet respond to a request for comment.

MacKenzie Scott similarly has DAFs at three sponsoring financial institutions, including NPT and Fidelity, Puck reported earlier this year, and has likely doled out much of her $14.4 billion-plus in grants via those entities. Her funds likely entered the DAFs as donations of Amazon shares she got as part of the 2019 divorce settlement with Jeff Bezos. By donating the shares to a DAF, she would’ve been able to avoid paying capital gains taxes that would have been owed if she sold those shares.

Koum, for his part, is one of more than a dozen billionaires who has created a DAF at a Bay Area sponsor that’s been popular among tech founders, the Silicon Valley Community Foundation.

In total, estimated charitable giving for 2022 including that from individuals, companies, bequests and foundations totaled $500 billion, according to a 2023 report from Giving USA. That means grants from DAFs now amount to around 10% of all giving and may well keep growing. Contributions to DAFs are up 133% and grants made by DAFs are up 119% from five years ago, according to the NPT report. And according to the Bank of America study, one in 20 affluent households (defined as having an annual income of more than $200,000 or assets of at least $1 million) used a DAF for their giving, and of those that made distributions in 2022, the contributions accounted for 42% of their total giving.

Compared to private charitable foundations, which currently hold approximately five times the assets (just over $1 trillion) that DAFs do, contributing to a DAF results in a higher tax deduction (30% vs. 20% of adjusted gross income for stock gifts, generally speaking). Both entities are irrevocable, though, meaning that donors can’t remove assets they put into the giving vehicles. Both entities also allow a donor who gives shares of a public company to avoid capital gains taxes on dividends, stock sales or other similar income. Notably, DAFs have no annual payout requirements—compared to private foundations’ requirement that they pay out 5% of the fair market value of assets per year—and don’t disclose grants on an account level, only on the sponsor level, which often pools assets of hundreds if not thousands of accounts.

That leaves the public to speculate where donations like stock gifts that show up in Securities and Exchange Commission filings end up. One question: Ebay billionaire founder Pierre Omidyar made yearly gifts of at least 9.6 million eBay shares between 2005 and 2020, shares now worth $7.7 billion if they haven’t been sold—but we don’t know where they landed. A DAF perhaps? (A spokesperson for Omidyar did not respond to a question about how much of Omidyar’s assets are held in DAFs, but he does publicly have at least one, based in his home state and sponsored by the Hawaii Community Foundation.)

Most billionaire donors give through multiple giving vehicles, NPT’s Heisman says: “They diversify their giving, and probably have a private foundation, multiple donor-advised funds, charitable remainder trusts, charitable lead trusts … and probably also still do checkbook philanthropy.”

Meta CEO Zuckerberg is a prime example of this. Zuckerberg and his pediatrician wife Priscilla Chan give through an umbrella entity dubbed the Chan Zuckerberg Initiative, which combines an LLC with a private foundation and a donor-advised fund. In an uncommon show of transparency, CZI lists all of its grants made through each of the three entities, including the DAF, on its website. (MacKenzie Scott also lists all her donations on her Yield Giving website.)

Critics of DAFs have been trying to increase reporting and payout requirements for the entities for years but have made little progress. Notably, billionaire former hedge fund founder and energy executive John Arnold spoke out against DAFs in a Twitter thread highlighting statistics at community foundation-sponsored DAFs in Michigan using scare quotes around DAF “donors.” Arnold referenced a Council of Michigan Foundations study that revealed 57% of DAF accounts paid out less than 5% (the minimum required distribution by private foundations) in 2020, and that 35% of DAFs at Michigan community foundations did not make a single distribution to charity that same year.

Those who have spoken out against DAFs have also raised concerns that large DAF-sponsoring organizations like Fidelity, Vanguard and NPT are trying to shape a positive narrative around DAFs by publishing reports like NPT’s that have numbers widely up for interpretation. For example, the $52 billion in grants from DAFs in 2022 include grants from DAFs to other DAFs, which can happen when very wealthy donors try to pool their DAF funds into a “giving circle,” or when a donor wants to give a big gift and moves their funds held in different DAFs all into one account, Heisman acknowledges. Or donors sometimes decide to switch DAF providers. That can easily amount to billions of dollars in “grants” that aren’t actually making it to those in need, but there’s no clear way to measure it.

In the meantime, because DAFs are easy to set up and provide attractive tax deductions, it’s very likely that assets will keep flowing into these charitable accounts.

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Sage Investment Advice From Exhausted Real Estate Billionaire Jeff Greene

Jeff Greene started investing in real estate as a side hustle in college and survived a downturn in the 1990s before making his first billion betting against the housing market in 2008. He spoke with Forbes about how he’s managing his investments ahead of a potential recession.

By Giacomo Tognini, Forbes Staff

As a child growing up in Worcester, Massachusetts, Jeff Greene shoveled snow and worked an 86-house paper route for the local newspaper. In college at Johns Hopkins, he worked part-time jobs ranging from teaching Hebrew to checking IDs outside the library. To pay his way through Harvard Business School, he traveled the country as a circus promoter—money that he later invested into three-bedroom houses in a town near Boston, his first foray into real estate.

Disaster struck with the real estate crash in the early 1990s, but Greene managed to scrape by. Then, in 2006, he made an audacious bet against the housing market, buying credit default swaps on subprime mortgage-backed bonds. The ensuing collapse earned him a windfall of $800 million, which he plowed into prime property in Palm Beach. It also made him a billionaire: Forbes now estimates his fortune at $7.5 billion, much of it concentrated in South Florida, Los Angeles and New York.

Forbes spoke with Greene about his knack for surviving crises and his risk-averse approach to investing.

Forbes: How did you get your first start in investing?

Jeff Greene: The way I got into real estate was kind of by accident. I was accepted to Harvard Business School in the spring of 1977, and then I needed a place to live and I wanted to move into Soldiers Field apartments, which was a beautiful modern complex. I’d already been out of college almost three years, I didn’t want to live in a dorm and I didn’t get into that apartment, it was full. So a guy who I’d gone to Johns Hopkins with, I asked him, “what do you do?” He’d gone to Harvard a year before me. He said, “Well, what I did is I bought an old three-family house out in Somerville, the next town to Cambridge. And you can buy one and you can live in one of those, rent out the other two and it’ll probably cover all your costs. You get a mortgage for 80%, so you’ll live rent free for two years and get your money back so you won’t have any rent.”

So I did that. I bought one of these three family houses, and I had worked after college and made $100,000 as a circus promoter. So this house was $37,000 with $7,000 down. I got accepted to the apartment complex, but I thought, “I already bought the house, so maybe I’ll rent out all three.” So I ended up thinking, “Wow, I’m making a 30% return, I’ve got to get more of these.” By the time I finished at Harvard Business School, I had 18 properties in this little town, Somerville, and the markets went way up. And my $100,000 cash was already a $1 million net worth. I was not even 25 and I was suddenly in real estate.

Forbes: How would you say your investment strategy has changed or evolved over the years? What’s your strategy like today?

Greene: Well, it changes as you go through the cycle of life. Starting out, I made my first $100,000 and then my first million. Then you think, “I’d like to make another million or $10 million, then $100 million.” You want to keep buying and building and growing. Now I’m 68 years old, so [my goal is] preservation of capital. The more the better, but I don’t really need to make more money. I was very careful when rates were low to lock in my rates, so I don’t have too much debt. Even the debt I have, it’s 90% locked in at lower rates.

I have five projects going on, but it’s really too much for me. I’m exhausted and I don’t like the workload, even though I know they’re good projects. Where you are in your life, more than anything, dictates how much risk you’re willing to take, how much work you want to have, and everyone’s different. I got married later and I have three young kids, so I want to spend time with my kids while they’re still young enough to enjoy it. Coming out of the financial crisis, honestly, I could have had a net worth three times what I have, because I didn’t leverage myself. I bought all these properties, I didn’t build on them. I just kept the land. I could have gone crazy. And I knew that I was giving up a lot of opportunities, but I just wasn’t that motivated for the workload or to build a bigger organization or to take the financial risk. When I was in my thirties, I wanted to conquer the world. Now I’m in my sixties, and I want to still be active and productive and make money, but I’m not willing to take risks like I was.

I had a big crash in the early ‘90s. My net worth became negative and it was a real eye-opener for me. Truthfully, from my first newspaper delivery route and shoveling snow and mowing lawns to where I was in 1991, it was a straight ride up. And then all of a sudden I wake up and my net worth is negative, and I’m fighting lawsuits. So I learned in that period, don’t be leveraged. Be prepared for slowdowns.

Forbes: We’ve talked about your strategy in the context of real estate. When you’re looking at your stock portfolio, bonds, alternative investments, is your strategy also conservative at the moment?

Greene: I’ve got a fair amount of treasuries. I’ve staggered one month and three month and six months treasuries, and I’m making five percent-ish. We’re in the Giving Pledge with Warren Buffett and Bill Gates, and you listen to [Buffett]. I’ve spent some time with him and I like a lot of the things he says. He’s very wise, that’s why he’s considered such a sage. Things like, “I’d rather buy a great company at a fair price than a fair company at a great price.”

And it’s the same thing [with real estate.] What do I want to own? I want to own great buildings, great companies. A great building is one that has stable, predictable cash flow, not a lot of volatility, that has good long-term prospects because of where it’s located, how it’s built, what it is, and it’s the same with stocks. I own some core stocks, Google and Apple and Meta. And they’ve had their ups and downs, but generally I have core holdings that I own, and you don’t pay attention to the noise of the markets. Those are the kinds of long-term assets. It’s the same with some of the properties that we own. We own some amazing properties around the country, some I’ve had for 30-plus years.

Forbes: Are there any investments that you consider your greatest triumphs? And others that were disappointments, or that you would rather have done differently?

Greene: I’m building these two towers that I’m finishing in West Palm Beach, [called] One West Palm. The market exploded out from under me. I never would’ve predicted that South Florida, during the pandemic, would have had this enormous inward migration. Rents doubled in the last five years, and demand for everything has gone through the roof and everyone’s moving here. It’s slowing a little bit now, but it’s been a big boom. That will be a successful project.

One thing I learned long ago is—and I unfortunately have not followed it as well as I could—but whenever you make a decision, if more than 50% of the reason you’re doing it is for your ego, the odds are you’ll regret it. Why did I build the two tallest buildings in Palm Beach County, over a million square feet? I’d say more than 50% for my ego. In the end, I do regret it because at the end of the day, when I’m building 200-unit apartment buildings, I could do it with my eyes closed. They’re easy. Some projects you do for the wrong reasons. So far, it looks like the market’s really going to make it successful, but not because I did such a great job as a developer.

Being a real estate developer, you’re kind of buying lottery tickets on the economic cycles. If you look at some of the big condo kings around, they make a billion dollars, they lose a billion dollars. How do you know, when you’re conceiving a project, what the market’s going to be two years later, three years later, five years later, when you’re really out trying to monetize it? You can guess. And oftentimes people are most aggressive when things are at the peak—when you should probably be pulling in—and the least aggressive when the world’s coming to an end, when you probably want to be in there, gearing up for the next up cycle.

Forbes: What advice would you give to your 20-year-old self?

Greene: Do things that make sense for you and the way you want to live your life, not for what other people will think about what you’re doing. You only have one life and you only have so much time on the planet. Whether you’re trying to build a net worth or a business, keep your eye on the ball and stay focused on the goals, whatever they may be. If your goal is to make as much money as you can, and you don’t care about anything else, then go work real hard and do everything you can.It’s important that whatever age you are, try to step back, take a deep breath and think, “Hey, is this what I wanted in my life?” Most people are just trying to make ends meet. Most people don’t have the luxury. You get a job, you pay your bills, hopefully you can get a little bit ahead and not be behind the eight ball. That’s most people’s life. But if you do have the luxury of choices, then sit back, think carefully, and make the right choices.

Forbes: What are some of the biggest risks you think investors are facing today?

Greene: We’ve had a very unusual time with this extraordinary amount of liquidity pumped into all the advanced economies. We don’t really know where it’s going to end up. We ended the pandemic with $2.1 trillion of excess savings above average levels. It was excess everything. It was excess construction projects because there was so much liquidity. More apartments were built in the last two years than any time in history.

But now I think we’re at the point where the excess savings are gone. The extraordinary amount of new wealth that people got from the liquidity, that caused housing prices to go up, and stock prices to go up and everything else, that’s dropping a little bit, so people don’t have the same wealth and the same savings. Now’s the time where these high rates could really rear their ugly head. I just had lunch with my banker and they said they haven’t made any construction loans in the last year. So everything we see out here is from the extraordinary liquidity period we had.

But now what happens when one of my properties finishes, where are these guys going to go work? Nobody’s starting any new ones. There’s no financing. There’s nobody buying houses, nobody’s buying condos, no one’s building office buildings. It was a long runoff from the excess period, and it’s now coming to an end. That’s why a lot of people are thinking we could have a significant economic downturn, starting now or early next year, as people run out of excess savings and don’t feel as wealthy.

Forbes: Given that environment, what are the particular micro or macro factors that people should pay attention to when they’re deciding how to invest their money?

Greene: If you think that we’re coming into a slowdown, then you certainly want to have as much liquidity as possible because you’ve got to be ready. You’ve got to be prepared to start making less money. If you’re a real estate investor, maybe if things slow down, your rents are not going to go up, they’re going to go down. If you’re a waiter, you’re not going to be making as many tips. If you’re a construction worker who is making $50 an hour plus overtime, maybe you’re going to be making $25 an hour with no overtime.

Be as liquid as possible. On a long-term basis, for most people, it pays to just have a diverse pool of investments because you want to be ready for anything to happen. Have diversity in your investment portfolio, so if one thing goes up, the other thing goes down.

Forbes: You mentioned Warren Buffett as someone you look to for advice. Do you have any investing mentors?

Greene: His investing style works for almost everyone. Spend all the time you have to make sure that you’re making prudent, good investments in great businesses, great real estate, and then keep your eye on them and be patient.

The other thing that he said, which I thought was very good advice, was wait for the big fat pitch. A mistake I made is too many deals. As soon as I feel like I’ve been pitched, I feel like I’m in a batting cage and I’m just swinging at everything just coming at me so fast. But sometimes, [you have to] let them go by, and that’s what he does. He lets his cash get up to billions of dollars. But then when Goldman Sachs needs money in the financial crisis, he steps up and he just waits for that big fat pitch.

All these expressions are very valuable. You want to be greedy when people are fearful, and fearful when people are greedy. And it’s hard when everyone’s greedy, and all your friends are buying and flipping houses, right? But that’s the time when you probably want to sit back and let that crazy, greedy excess pass and wait until things calm down. And then when everybody’s panicked, like is happening now in real estate to some extent, that’s the time when no one wants to touch it because it’s going to go down forever. That’s the time you want to start being greedy.

Forbes: Are there any books that you’d recommend every investor should read?

Greene: I really don’t. I can’t say I’ve got a lot of people’s books, because most books on investing really can be summed up in a couple of pages. You could read all these how to make money in real estate books, and there’ll be 100, 200 pages on it but the general gist of it is: buy quickly, put as much debt on it as possible, use the money to go buy another one, sell it, buy another one, refinance, try to turn your money quickly.


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Louisiana’s Richest Person Bets Big On The Gulf South

Billionaire Gayle Benson, owner of NFL’s New Orleans Saints and NBA Pelicans, discusses her venture capital firm and its new biotech investment.

One of the wealthiest women in America, Gayle Benson is best known as the owner of the NFL’s New Orleans Saints team and the NBA’s New Orleans Pelicans. The richest person in Louisiana, she inherited the sports teams and at least ten other businesses from her late husband Tom Benson (d. 2018). These days she spends most of her time overseeing the teams, going to every Pelicans home game and flying around the country to attend every Saints game.

But Benson has bigger ambitions. “People think what I do today is glamorous, but there’s nothing glamorous about going to 42 Pelicans games and 18 Saints games,” she insists. So she is refashioning herself as a venture investor, betting on her home state and, specifically, the Gulf South, which includes the five states bordering the Gulf of Mexico (Texas, Louisiana, Mississippi, Alabama and Florida). Adds Benson, “I was always an entrepreneur and always wanted to create new things.”

Benson set up venture firm Benson Capital Partners (BCP), in New Orleans in 2019; it now has more than $125 million in committed capital from roughly two dozen unnamed high-net-worth individuals and institutional investors including $20 million of Benson’s own cash. The firm has two funds, both of which are focused on investing locally, something the New Orleans-born-and-raised Benson wanted—and had the flexibility to execute—because of her resources and connections. There is a $57 million venture capital fund, which closed in 2020, focused on tech and healthcare, and a $69 million real estate fund, which closed in January.

Benson doesn’t handle the day-to-day operations of the four-person fund (that’s up to the firm’s managing director Mike Katz, director Caroline Crumley and two other full-time investors). But she does attend its weekly investment committee meetings. It was at one of those that she pitched the idea of Benson Capital’s real estate fund. “I really enjoy real estate,” Benson says. “It’s tangible, and it’s something you can have and hold on to. It’s interesting how it’s all come full circle.”

That fund, which is almost a year old, has closed on two investments so far, but still has nearly $60 million to put to work.

BCP’s first investment, in 2021, was in New Orleans biotech startup AxoSim, which creates lab-grown human cells that mimic human organs with the goal of making drug development, particularly for neurodegenerative diseases, faster and cheaper. On Tuesday, AxoSim, which is in the process of raising its third round of funding, announced that it will acquire the human-organoid-related assets of Vyant Bio, a public biotech company that recently delisted from the Nasdaq, for $2.25 million.

“Frankly, New Orleans isn’t maybe known for being a biotech hotbed,” says AxoSim CEO Lowry Curley, adding that accordingly, early-stage funding is relatively difficult to raise in the region. “The support of someone like [Benson] and her team that’s so business-minded and successful … has let us hit some really big milestones, not the least of which is this acquisition.”

AxoSim is representative of the types of investments BCP’s first fund seeks out. That fund has 13 portfolio companies and has room for eight to ten more investments, according to Katz, BCP’s managing director, meaning they generally invest $1 million to $3 million per deal for a median 20% stake.

Benson, 76, inherited her now $5.3 billion fortune five years ago, but she officially started her own business at age 34 in 1981. A couple of years prior, Benson says she left her secretary job and borrowed $10,000 (interest-free) from a friend in the medical field to start an interior design firm, Gayle Bird Interiors. “I just said, ‘Oh, I’m just going to do this on my own,’ and so that’s what I did,” Benson says. She eventually started buying and reselling some of the residential properties she designed—then moved into commercial property, landing several notable clients including Hyatt Hotels, the Ritz-Carlton and the Omni Hotel. In 2000, she helped renovate the public spaces at the Mercedes-Benz Superdome. “It was a lot of fun, but it wasn’t always glamorous like people think,” adds Benson.

Throughout its quarter decade of operation, though, the interior design business had both years of positive cash flow and years of significant debt; Benson faced more than a dozen lawsuits related to her company, mostly alleging that she didn’t pay small bills on time or otherwise breached contracts. It’s not clear what happened in most of those cases from many years ago but in one case, at least, her firm was ordered to pay back $1690. Nevertheless, Gayle Bird Interiors cemented her identity as an entrepreneur and her place as a well-connected New Orleans resident.

In 2004, she married Tom Benson, whom she met at mass at the St. Louis Cathedral (which she is currently leading a multimillion-dollar effort to repair). Roughly a year later, she dissolved Gayle Bird Interiors and got herself involved in her third husband’s network of a dozen businesses, from the New Orleans Saints to auto dealerships to a wine company. She founded thoroughbred horse racing company GMB Racing in 2014.

Tom Benson’s apparent heirs at the time weren’t happy with Gayle’s growing role. Benson, who had been widowed twice before marrying Gayle, announced he did not want his daughter and grandchildren to be heirs of the Saints, Pelicans and other major businesses in 2015; they sued, alleging he was mentally unfit to manage his life and companies; the messy dispute ended in a confidential settlement that left Gayle Benson as sole heir of Tom Benson’s main businesses when he died in 2018. (The deadline to challenge the will passed seven months ago).

Her goal now, she says, is to “continue his legacy of business and economic development in the region.” While the sports teams are struggling with middling records, it’s a bit early to tell if her venture firm’s strategy is paying off yet: BCP’s fund is “slightly up” for now, according to Katz, who says they’re targeting a 30% internal rate of return for that fund.

Still, one advantage her firm has: being one of fewer fish in the pond. “Strategically, this part of the country, with some rare exceptions, lacks institutional capital at scale, and as a result, there really aren’t other firms that we’re bumping into” when competing for deals, says Katz.

It’s not clear, though, how long it will stay centered so closely on the Gulf South. With AxoSim’s acquisition, BCP will have its first investment in the Midwest—related assets of Vyant Bio subsidiary StemoniX include a facility outside of Minneapolis—but AxoSim “will always have a presence in New Orleans,” Curley said.

Like AxoSim, BCP is also hoping to expand outward. About 60% of the first fund’s capital and 50% of the second fund’s capital comes from investors with ties to New Orleans, and Katz says he only expects that to decrease with future funds, although it will remain rooted in New Orleans. For now, the firm has investments mostly in Louisiana as well as Alabama, Texas and Florida, but hopes to expand to Georgia, Mississippi, Arkansas and South Carolina soon.

Meanwhile, Benson circles back to the connection between the worlds of the NFL, the NBA and venture capital: “Whether we are talking about the business of sports or the business of high tech investments, success comes down to the people,” she says. “And we’re deeply committed to identifying, empowering and retaining the best talent that we can.”

“I stepped into some pretty big shoes. I felt like in the beginning I was floating around it,” Benson says. “But I’m just starting to get my footing.”

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Mapping Billionaire Wealth: Where The Richest Americans Live Now Vs. Two Decades Ago

Billionaires love sunshine and low taxes — but not always.

By Monica Hunter-Hart, Contributor

“California used to be the Golden State. Now it’s rusted and destroyed,” says energy drinks magnate Russ Weiner. In a way, the state’s flush with gold; California is a treasure trove of extreme wealth. But some of its most affluent residents, including Weiner (worth an estimated $4.8 billion as of the date of publishing), have also been moving away, Forbes finds in a 20-year analysis of the annual Forbes 400 list of the richest Americans.

California has consistently been home to more members of The Forbes 400 than any other state, and now has 87. But that’s six fewer than two decades ago. Plenty of California-based tech tycoons moved on and off the list over the years as their fortunes fluctuated with the stock market, but some disappeared because billionaires just up and left. Over the past 20 years, while gaining new Forbes 400 residents, California lost 19 of them to other states, particularly Texas, Nevada and Florida, where Rockstar Energy drink founder Weiner moved in 2009.

What made him want to skip town? “Crime, homelessness, education, taxes,” he says. Oh, and Democrats.

Weiner is far from the only uber-wealthy entrepreneur who’s been chasing both rays and lower taxes. Florida and Texas, which have neither state income tax nor state capital gains tax, both saw dramatic 20-year upticks in residents who made the 400 list. Texas went from 36 to 45, a 25% jump, while Florida — stunningly — doubled from 23 to 46 members of the list. Most of the increase in Florida came from Forbes 400 members moving there. That includes the likes of hedge fund tycoon Ken Griffin, a former longtime resident of Chicago, who also relocated his firm Citadel to Miami because he said it offered a better corporate environment; Paychex founder Tom Golisano, who said he was escaping New York’s high taxes when he moved to Naples in 2009; Charles B. Johnson, who moved to Palm Beach from California after retiring from money management firm Franklin Resources; and Thomas Peterffy of Interactive Brokers, who left Connecticut around 2015, also for Palm Beach.

An outsized number of the last decade’s Florida transplants came from the northeastern elite enclaves of New York, Connecticut and Illinois, and most made their fortunes in finance and investments. A far smaller amount of the list’s new Floridians created fortunes in the Sunshine State from the start, like Nick Caporella, whose National Beverage makes the popular La Croix bubbly water.

The picture is much dimmer in the Midwest, which has been shedding the extremely wealthy. The number of richest Americans there dropped 42% over the past two decades, from 73 to 42, mostly because Heartland billionaires’ fortunes decreased or didn’t keep pace with the rest of the country. (The cutoff to make the Forbes 400 rose from $600 million in 2003 to $2.9 billion in 2023.) But some just moved to warmer pastures, like movie producer Gigi Pritzker (who changed her permanent address from Chicago to California around 2019) or two heirs to the Walmart fortune (from Missouri to Texas and Nevada).

And about 30% of Midwesterners on the 2003 and 2013 Forbes 400 lists have since dropped off because they passed away. In the last few years, that’s included iconic figures like Berkshire Hathaway’s Walter Scott Jr. (a former Omaha resident who was a close friend of Warren Buffett) and Chicago’s Sam Zell (forefather of the modern real estate investment trust), and a bit before them, William Ford Sr, the last grandchild of Henry Ford, who lived in Michigan. The manufacturing industry saw a particularly high number of drop-offs — paralleling the decades-long manufacturing decline in the Midwest — as did media, real estate and retail.

Minnesota has been hit hardest. It ranked No. 9 among states with the most 400 members in 2003, when there were 11, but has now been completely drained out. A single family had an outsized impact on that decline. The clan behind the world’s biggest agriculture company, Cargill, used to be concentrated in the North Star State, where the business is still based. But Cargill’s old guard has died and the richest family members are now scattered across the country in Montana, Wisconsin, Missouri and California.

This scenario — where a company’s big shareholders live far from the company itself — is actually not unusual. And it may be even more common these days in a place like Minnesota, says the Tax Foundation’s Jared Walczak.

“Minnesota does very well with traditional C corporations,” says Walczak. “It’s high taxes, but those high taxes historically have not fallen very heavily on businesses, so it’s been a very competitive place to operate your Fortune 500 company. But you also have a situation where states like this may be unattractive for the C-suites themselves,” perhaps in part because of those higher individual taxes. And in an increasingly mobile environment, he points out, not even high-level executives need to live where they work.

Although taxes matter, Walczak and other analysts stress that it’s far from the only consideration for billionaires when it comes to planning where to live. It often isn’t even the top factor.

“Many state lawmakers overestimate how sensitive rich people are to a few percentage points’ difference in the state tax rate,” says Carl Davis of the Institute on Taxation and Economic Policy. Richard Auxier of the Tax Policy Center agrees: “If you’re in West Virginia or Michigan and you think the taxes are the only thing that’s different about your state and Florida and Texas, I really need you to think a bit harder.”

Instead, the decision of where to live is hyper-personal, they say, noting that being closer to family is a frequent reason why billionaires move. The uber-wealthy also pursue top education systems, keeping in mind both their kids as well as their company workforces. Urban amenities are a big draw. So are safe neighborhoods, good infrastructure and centers of culture.

The culture is what AriZona Iced Tea founder Don Vultaggio, raised in Brooklyn and worth an estimated $5.6 billion, loves about New York City. (Vultaggio now lives outside the city, in the Long Island enclave of Port Washington.) He remembers a conversation he once had with Andrew Cuomo: “‘Governor, businesses don’t mind paying taxes. We like it here. Museums, theater. It’s great.’” Many must agree, as the number of New Yorkers on the 400 shot up 27% over the past two decades, from 49 to 62.

Extreme wealth has been consolidating in the United States. Back in 2003, the 10 states with the most 400 members had 275 of them; today, they have 297. Exactly 60% of the billionaires who made the list this year live in just four states: California, New York, Florida and Texas — the four states with the largest populations, together home to one third of all Americans. “The growing geographic concentration helps explain our populist politics these days,” says Darrell West, author of the 2014 book Billionaires: Reflections on the Upper Crust. “Much of the country is being left behind in terms of economic activity.”

A handful of states — Maine, Delaware, North Dakota, New Mexico and Alaska — haven’t had a resident make The Forbes 400 list in at least two decades. On the other hand, the picture has been getting much rosier in places like Arizona and Georgia, which joined the top 10 states for the first time in 2014 (when the latter was tied with Maryland and Tennessee at 7 list members) and now ranks No. 6 with 10 Forbes 400 residents. Iowa and Kentucky both had no 400 members in 2003 and now each have one: Harry Stine (worth an estimated $8.8 billion, who joined the list in 2014), and Tamara Gustavson ($7.4 billion, 2011), respectively.

This is also a great year for Mississippi, which made the list for only the second time in two decades. Joining the ranks of the richest are Hattiesburg’s Duff brothers, who are behind the holding company Duff Capital Investors, which owns construction, energy and trucking firms.

“Mississippi is a good place to do business, mainly because of our people, who are hard-working, optimistic and dedicated to providing a better future for their families,” says Thomas Duff, who’s worth an estimated $3 billion. “Keeping a Mississippi-based operation for our companies has helped us stay true to our values.”

Sitting at the very bottom of the Forbes wealth ranking is Alaska, which has never had a resident make the 400 list since it was first published in 1982. That does constitute a loss for the Last Frontier.

“You would love to have billionaires living in your state,” says the Tax Policy Center’s Auxier, explaining that the attraction is not just tax revenue but also the companies the wealthy often start or bring. “Someone just sitting on their money, they’ll take them, they don’t want to lose them — but if you talk to someone in these states, what they really want is a billionaire who is participating in the economy and hopefully has businesses in the state.”

Of course, there’s only so much a state can do to court the rich. With great wealth comes great mobility. The Americans with the deepest pockets will go where they want.


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Tax Liens And Sports Teams: Billionaire Marc Lasry’s Investment Playbook

Morocco-born vulture investor Marc Lasry and his sister Sonia Gardner have made billions buying debt and other troubled interest-bearing obligations, such as tax liens. Now they’ve set their sights on sports, looking for value in unexpected places like Major League Pickleball and the NBA’s Africa league.

By Maneet Ahuja, Forbes Staff and Hank Tucker, Forbes Staff

Twenty Formula 1 engines rev in synchrony as they ready for a practice run through the streets of downtown Singapore for September’s annual Grand Prix at Marina Bay Street Circuit. Marc Lasry, billionaire cofounder and CEO of $12.5 billion private equity firm Avenue Capital Group, is taking a break from a party upstairs at the Paddock Club to visit the garage of the Mercedes-AMG Petronas team.

“We’ve been looking at some F1 teams to invest in, [so] I wanted to come out here to meet and talk to a number of people,” Lasry says, straining to be heard above the squeal of pneumatic wheel guns, as F1 star Lewis Hamilton climbs into his car. Lasry won’t say which team he’s eyeing, but given his deep-discount approach to investing, it’s not likely to be a podium favorite like Mercedes.

In April, Lasry sold his 25% interest in the NBA’s Milwaukee Bucks at a $3.5 billion valuation—a sixfold profit after nine seasons, including the Bucks’ first NBA championship in 50 years in 2021. The transaction boosted Lasry’s net worth to $2.1 billion, an impressive 17% jump from a year ago, but still $800 million short of this year’s cutoff for inclusion on The Forbes 400. When he bought the franchise in 2014 with another private equity billionaire, Wes Edens (net worth $3.9 billion), the Bucks were wrapping up a season as the NBA’s worst team.

Lasry, 63, and his 61-year-old sister Sonia Gardner are distressed-asset investors, and for most of the last 35 years, bonds and other forms of debt have been their specialty. After the 2008 crisis, for example, Avenue made a $400 million windfall investing in the bank debt of Ford Motor Company, which had fallen below 40 cents on the dollar over concerns that it would collapse. Ford ultimately paid in full: 100 cents on the dollar.

Says Lasry from his waterfront Connecticut mansion, “If you stay calm and buy when every­body is panicking, over time, you will end up doing well.”

Since inception, debt-focused Avenue has afforded investors in its various funds returns ranging from 10% to 19%, net of fees. Moreover, Avenue’s pledge is that its managers won’t start pocketing carried interest until its limited partners have achieved an 8% return.

Right now, Lasry is finding opportunities because the Federal Reserve’s rapid rate hikes have put a strain on many small banks, prompting them to pull back from lending. “By not [guaranteeing deposits] you’re hastening the demise of smaller banks. They can’t grow,” Lasry says. “Best case, all they’re doing is telling everybody, ‘Don’t worry, we’re fine’—and the minute you’re explaining why everything’s okay, it’s not.”


By Martin Fridson

Investors can get a piece of the distressed-debt action by buying Pioneer High Income Trust, a closed-end fund that focuses on lower-rated corporate bonds, loans and convertibles. PHT is aggressive within the high-yield space, holding a lot of single-B and triple-C issues including Viking Cruises and Tenet Healthcare. PHT’s investment strategy and use of leverage has positioned it especially well to profit from the rebound in distressed debt coming out of recessions. In 2009, after the Great Recession, the fund posted a 104% total return; after the March 2020 recession PHT delivered a 62% 12-month total return. The fund currently yields 9.47% and is trading 10% below its net asset value.

Martin Fridson is editor of Forbes/Fridson Income Securities Investor and CIO of Lehmann, Livian, Fridson Advisors LLC.

Avenue is happily filling the void, lending privately at rates as high as 15% currently. Property tax liens have been another fertile area for Lasry; he has been buying them in bulk. When homeowners are late to pay their property taxes, municipalities often sell tax lien portfolios to investors like Avenue. The town passes off the headache of debt collection, and Avenue gets to collect the interest payments, which can be anywhere between 9% and 18%. Tax liens are senior to home mortgage debt. Thus, if the house ends up in foreclosure, Avenue gets paid before the mortgage holder.

“There’s zero risk of loss,” Lasry says. “A house that’s worth a million dollars would have to be worth less than $15,000, because the tax lien is 1.5%, which is impossible.”

Born in Morocco, Lasry immigrated to the United States with his parents in 1966, when he was 7. His mother, who taught French at the school he and his two younger sisters attended, made Lasry learn English by reading the Funk & Wagnalls encyclopedia. His father was a computer programmer for the state of Connecticut.

Marc and Sonia both attended Clark Univer­sity in Worcester, Massachusetts, from which Marc graduated in 1981 with a B.A. in history. Before attending New York Law School, he worked as a UPS truck driver and briefly consi­dered ditching his academic plans due to the high wages and good benefits.

After clerking for New York bankruptcy judge Edward Ryan, Lasry landed at bond brokerage Cowen & Company in 1987, managing $50 million in partners’ capital. Not wanting to hire a future competitor, Lasry recruited his sister to join the firm. Says Gardner, now president of Avenue, “As a brother and sister, we have 100% trust in each other.”

In 1989, Lasry and Gardner, then 30 and 27, respectively, left Cowen to manage money for one of its biggest clients: Robert M. Bass, the legendary Texas billionaire (current net worth $5.3 billion). Under the tutelage of David Bonderman, the siblings invested mostly in bank debt, senior bonds and trade claims through a fund called Amroc, a play on Maroc, the French word for Morocco.

“Marc is willing to be aggressive when he thinks something is right, and he doesn’t let a small fact get away,” says Bonderman, who went on to cofound private equity giant Texas Pacific Group and is now worth $5.8 billion. “If somebody needs to say no, it’s Sonia. Marc doesn’t like to say no to people.”

In 1995, attracted by bigger deals in the burgeoning private equity business, Gardner and Lasry started Avenue with $7 million in capital.

“Marc has always been focused on investments and the investors. I focus on managing the business day to day,” Gardner says. The formula has worked well. By 2008 Avenue’s assets swelled to $20 billion.

During the financial crisis, Avenue was down 30%, but thanks to smart investments in Ford and the fire-sale bonds of AIG, its assets reboun­ded 80% in 2009 and 30% in 2010. Then Lasry decided to return $9 billion to his investors, cutting Avenue’s assets to roughly $12 billion.

“You had no more distress, so we thought—totally wrongly—we’ll return capital and the next [down] cycle will be in two or three years and it’ll be great,” Lasry says. “The next cycle was like 12 years later.”

Since the start of the pandemic, Lasry and Gardner have been finding a smorgasbord of discounted assets. Avenue spent $110 million buying 100% of the debt of an Indian toll road operator that is building a highway through the western coastal state of Gujarat. During Covid, there were fewer drivers on the road and the operator struggled, so Avenue restructured and took control of it. It’s now generating a 10% to 15% return, and if people drive more, Lasry says that figure will rise to 20%.

More than half of Avenue’s assets today are in its non-U.S. funds—its sixth Asia fund has genera­ted a 11.5% annual return since April 2020, net of fees, and it’s currently raising a seventh. It also has $4 billion in its Europe funds.

Sports could be another big winner for Avenue investors. True to form, Lasry’s new $2 billion Avenue Sports Fund is taking a value investor’s approach rather than only buying expensive chunks of teams in the NBA or MLB. It has already recruited an “Athletes Council” that includes NFL Hall of Famer and Good Morning America cohost Michael Strahan; skier Lindsey Vonn and soccer star Lauren Holiday (both Olympic gold medalists); and former WNBA star Candace Parker. In return for a small slice of the fund, the athletes will help make connections and offer advice. Lasry hopes to capitalize on women’s sports and budding global leagues, including the Basketball Africa League, which completed its first season in 2021 and which he thinks is ripe for exponential growth. He notes that teams can still be acquired for less than $25 million on a continent with 1.5 billion people.

“Marc has a unique connection to the continent,” says NBA commissioner Adam Silver. “He’s analogized what’s happening in Africa to where the NBA was several decades ago, and I think that’s right. He’s clear-eyed about what it will take to build a successful league there, but he wants to be on the ground floor.”

With its new fund, Avenue will compete in a crowded field of private equity sports investors. Arctos Partners, which has nearly $7 billion in its funds, has several MLB, NBA and NHL teams in its portfolio, and Michael Rees’ Dyal HomeCourt Partners has pieces of at least three NBA teams. Private credit specialist Ares Management raised a $3.7 billion sports fund last September.

Lasry isn’t worried about competition, believing his track record will give him an edge with potential partners. He notes that two years after launching Major League Pickleball’s Milwaukee Mashers with former tennis star James Blake for a $100,000 investment, the team is worth millions today.

“On the investment side, it’s about what’s the price,” he says. “In sports, it’s much more ‘Do I want to be partners?’ If we bid within 10% or 20% of wherever anybody else is bidding, we’ll win.”


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Here’s How Much Mike Pence Is Worth

Government pensions made the former vice president a millionaire in 2019, but he really cashed in after the 2020 election forced him back into the private sector.

It took Mike Pence nearly two decades of government service to become a millionaire on taxpayers’ dime through his state and federal pensions in 2019–and less than three years to quadruple his fortune as a public speaker, writer and consultant after leaving the vice presidency in January 2021. The 64-year-old darling of conservative evangelicals, who published his memoir “So Help Me God” last November, is wealthier (and more liquid) than he’s ever been, worth an estimated $4 million, according to Forbes’ estimates.

From the start of 2022 to June 2023, Pence generated $3.4 million by delivering 32 paid speeches, talking to a variety of groups, including an international peace organization, an oil and gas group and a smattering of universities. He collected another $1.4 million in advance payments for his book over the same period. His wife, Karen, received $75,000 in advance payments for her book, “When It’s Your Turn To Serve.” The Pences used some of their newfound cash to enjoy life outside of the White House, paying $1.9 million for a home in Indiana. But they saved plenty, too, buying stock in blue-chip names like Apple, Pfizer, Chevron and Lockheed Martin, before concentrating their portfolio in broad-based funds as a presidential run approached.

The son of a Korean War veteran who helped build Kiel Bros. Oil Co., an Indiana gas station and convenience store chain with more than 200 locations at its peak, Mike Pence graduated from Indiana University’s law school in 1986. He passed on a job at his family’s business, instead mounting unsuccessful campaigns for Congress in 1988 and 1990 and briefly working at a small law firm. Pence’s second congressional campaign erupted in scandal after he used political donations to cover a mortgage, credit card and grocery bills. “I’m not embarrassed that I need to make a living,” he told the press at the time. Such personal spending was legal then (though it has since been banned) but proved unpopular with voters.

Pence’s Portfolio

As vice president, Mike Pence’s fortune was almost entirely locked up in government pensions. Out of office, he has quadrupled his net worth to $4 million, scooped up a mansion in Indiana and expanded his exposure to the stock market.

Over the next decade, Pence reinvented himself as a local radio star, billed as “Rush Limbaugh on decaf,” making him a minor celebrity in the conservative Midwest and helping propel him into Congress on his third attempt in 2000. Still, the U.S. representative from Indiana remained one the Capitol’s poorer members, with few assets to his name besides stock in his family’s Kiel Bros.—worth somewhere between $200,000 and $450,000, according to a financial disclosure report he filed with the federal government in 2004. The company, which his brother Greg had taken over, filed for bankruptcy the next year.

Pence had a safety net. In 2006, he hit his fifth year of federal service, making him eligible for the especially generous retirement package afforded to members of Congress and their staffers. In 2012, Pence voted to scale back such retirement packages for future congressmen, but a grandfather clause written into the new legislation left his pension, and those of older lawmakers, untouched. “They’re almost twice as valuable as a regular federal pension,” Tim Voit, a financial analyst who runs a firm specializing in pensions told Forbes in 2019. “Congress passes laws for their own benefit, and they’ll never shortchange themselves.”

Between the 12 years Pence served in the House through 2012 and his four years as vice president beginning in 2017, he is currently eligible to collect an estimated $62,750 per year from the federal government for the rest of his life. If he were able to sell that annuity today, he could get about $620,000 for it, down only slightly from around $700,000 in 2019, with two years of additional service as vice president offset by the impact of interest rate hikes.

Then there’s Pence’s state pension, the result of his four years as governor of Indiana through 2016, which entitles him to 40% of his final salary of $112,000 for the rest of his life. That’s assuming Pence, who received a salary of $230,700 during each of his four years as vice president before really raking it in as a private citizen, waits to start drawing benefits until he turns 65 next year. The Indiana pension is worth an estimated $430,000 today–down only slightly from a half million or so in 2019. A spokesperson for Pence did not respond to requests for comment on this story.

Pence’s pensions are still worth a lot to the former vice president, accounting for nearly a quarter of his estimated $4 million fortune, or $1.1 million combined. But they’re not his only real assets anymore. The millions he earned writing, speaking and consulting after leaving the White House likely helped Pence pay off the five student loans he received to help put his three children through college, which had somewhere between $100,000 and $250,000 of principal remaining on them when he departed the White House, according to a financial disclosure he filed in January 2021.

Pence’s recent cash infusion will also make it easier to pay down the $1.5 million mortgage he took out to purchase a five-acre estate in his hometown of Columbus, Indiana shortly after leaving the vice president’s official residence at the U.S. Naval Observatory in January 2021. Forbes estimates that Pence’s new property, apparently the first he has owned since moving into the Indiana Governor’s Mansion in 2013, is now worth $1 million, after deducting the remaining balance on his 30-year mortgage.

Pence also owns shares in four mutual funds worth between $95,000 and $250,000 combined through his 401(k) plan at Hoosier Heartland LLC, the entity through which he conducts his speaking, writing and consulting. Hoosier Heartland has paid him $381,000 in salary since the beginning of 2022, according to his most recent financial disclosure. Two of his larger holdings today are a money market account and a Fidelity index fund that tracks the broader market, in which he has somewhere between $500,000 and $1 million apiece. To top things off, Pence has a life insurance policy valued somewhere between $15,000 and $50,000, and as much as $15,000 of cash in the bank.

The last two and a half years as a private citizen have been far more lucrative for Pence than his 20 years in public service. But he could make even more in the wake of a presidency, if he’s able to upset both his former boss, Donald Trump, and the man whose election he certified, Joe Biden.


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Billionaire Brawl: Now Who’s Winning The Fight Between Musk And Zuckerberg?

Musk and Zuckerberg continue to deal blows to each other, even if the cage fight is still metaphorical—for now.

By Phoebe Liu, Forbes Staff

The yearslong battle between Elon Musk and Mark Zuckerberg—which might turn physical—continued this week. The Meta CEO dealt a blow to Musk on Wednesday, when he launched a direct competitor to Musk’s Twitter, called Threads, in a surprise announcement accompanied by Zuckerberg’s first tweet in a decade: the Spiderman meme often used to poke fun at two very similar things.

Musk is fighting back. On July 5, the day Threads launched, an attorney for Twitter threatened legal action against Meta, accusing the company of misusing Twitter’s “trade secrets and other intellectual property.” Threads’ user experience differs from that of Twitter in several key ways, including eschewing hashtags and the chronological timeline, but still looks a lot like Twitter. Musk referred to Threads as a metaphorical “tapeworm.”

Still, Threads seems to be off to a solid start, reporting more than 30 million sign-ups within 24 hours, including a smattering of billionaires, pop stars and politicians. Analyst optimism around Threads’ launch also helped push Zuckerberg’s net worth, mostly held in Meta stock, up by $1.2 billion this week. He is the world’s 8th-richest person, according to Forbes’ real-time tracker. Musk, who reclaimed his spot as the world’s wealthiest person last week, had an even better week than Zuckerberg. Shares of his electric vehicle maker Tesla climbed 5%, translating to a $8.2 billion jump in Musk’s net worth. As of Friday’s market close, Musk is worth $246 billion, while Zuckerberg is worth $103 billion.

Despite their public brawling, both tech executives are riding high—really high—this year. Zuckerberg’s wealth has grown by the bigger percentage, while the richer Musk has added more wealth in sheer dollar terms. Since the beginning of 2023, Zuckerberg’s fortune has jumped 137%, from $43.8 billion to $103 billion. Over the same period, Musk’s net worth has climbed by 68%, from $146.5 billion to $246 billion. Their main shareholdings, Meta and Tesla, are the second- and third-best performing stocks in the S&P 500 in the first half of 2023, up 141% and 123% respectively.

Opinions differ on whether the physical fight will occur: Dana White, president of the Ultimate Fighting Championship, says they’ve been planning; Walter Isaacson, Musk’s biographer, says the cage match won’t happen. Still, even aside from Twitter vs. Threads and net worths, there’s much to compare:

  • Zuckerberg first became a billionaire in 2008, just four years after founding Facebook. At 23, he was the youngest self-made billionaire at the time, debuting at No. 321 on The Forbes 400, worth with a net worth of $1.5 billion. Musk debuted on Forbes’ Billionaires List four years later, worth $2 billion and ranked no. 634
  • Zuckerberg appears on Forbes’ 2023 list of America’s most generous givers, while Musk doesn’t. Musk gifted Tesla shares last year, but it’s unclear whether they were actually disbursed to charity.
  • Zuckerberg has a sprawling real estate portfolio worth an estimated $300 million—including some 1,500 acres of land and a former sugar plantation in Hawaii. Musk pledged to sell almost all of his real estate two years ago.
  • Musk has led more companies (including Tesla, Twitter, SpaceX and Neuralink) causing some critics and investors to worry that he’s distracted. Zuckerberg has focused his attention on Facebook-turned-Meta, which he famously launched from his Harvard dorm nearly two decades ago.
  • Musk owns more of the main company that made him rich. He has approximately 20% of Tesla shares, while Zuckerberg owns just under 15% of Meta.
  • Musk immigrated to the U.S. from South Africa via Canada and graduated from the University of Pennsylvania in 1997. Zuckerberg, the son of a dentist, grew up in Westchester County in New York. He dropped out of Harvard during his sophomore year.
  • Zuckerberg has three children with his wife, Priscilla Chan (All are named after Roman emperors). Musk has at least nine living children with three women, including triplets and two sets of twins; one is named X. Still he has expressed worries about population collapse.

Here’s how the net worths of Musk and Zuckerberg fared in the week spanning from market close on Friday, June 30, to the close on Friday, July 7:

Elon Musk





Musk is once again the world’s richest person, after sitting at the No. 2 spot for six months. His net worth is up $8.2 billion this week, thanks to Tesla’s 5% stock jump. Over the weekend, the world’s top-selling electric vehicle brand announced a quarterly delivery record of nearly 500,000 sedans and crossovers, aided by price cuts—beating analysts’ expectations and enriching Musk, who owns around one-fifth of the company.

Mark Zuckerberg





Multiple analyst upgrades for Meta followed the launch of Twitter competitor Threads, leading to an uptick in Meta stock this week. After more than a year out of the world’s top ten richest, Zuckerberg reentered those ranks late last month. Meta’s new product and its cost-cutting narrative—including 21,000 layoffs since late 2022—in what Zuckerberg has called a “year of efficiency” has helped rocket its stock price up from a November 2022 low.


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Food barons: Who are the billionaires profiting from a global crisis?

In the past few years, the world has experienced the rise of food billionaires – companies profiting from skyrocketing prices and making huge revenues while many are forced to cut back or go hungry.

Just like in the energy sector, food companies have been cashing in from the cost of living crisis that has followed the difficult times of the COVID-19 pandemic. But while companies like Shell and Exxon are almost household names, the names of the businesses pulling the strings of the food industry – Cargill and Walmart, among others – are less well-known, and much less scrutinised.

“It’s surprising in a way, because I think that they’re doing exactly the same thing as the fossil fuel corporations,” Nick Dearden, director of NGO Global Justice Now, told Euronews. “You’ve got a bunch of corporations that are growing more and more and more powerful all the time, gaining more control over different aspects of the food system and massively profiteering.

“And during a cost of living crisis, where many people are struggling to afford heating and food, they are making an absolute fortune and they’re doing it in the same way as the energy corporations. Essentially, they are monopolising a very basic thing that we all need.”

While the supply of food keeps increasing on a global level, even despite the setback caused by Russia’s invasion of Ukraine and the war that has followed, and would be “more than enough to feed everybody in the world, the number of people who are chronically malnourished is going up,” Dearden said.

“There’s something really rotten at the heart of the system that allows people to go seriously hungry, to be malnourished, and in the worst cases to starve, while we have enough food.”

In a recent report on the issue, ETC researchers Hope Shand, Kathy Jo Wetter, and Kavya Chowdhry called the biggest players in the food and agricultural industries “food barons” – a title that immediately points to the power these corporations exert on the food industry.

Where do food billionaires come from?

Food barons existed long before the pandemic, or the cost of living crisis. These are companies that have established themselves through decades and have come to control large parts of the sector. But the pandemic and the cost of living crisis have had a huge role in increasing their relevance – and their numbers.

According to a recent report by Oxfam titled “Profiting from pain”, food billionaires have seen their collective wealth grow by an estimated 45 per cent over the past two years – for a total of £328 billion added to their profits. In the same years, 62 new billionaires were created as companies inflated their profits by capitalising on the COVID pandemic and now the growing cost-of-living crisis that has forced many to cut back and even choose between eating or heating their homes.

Same as energy companies, food billionaires have seen their wealth increase by one billion dollars every two days between 2020 and 2022. This surge in profits was mostly led by the trillions of dollars national governments have injected into their economies to keep them from collapsing, which had the unwanted side effect of driving up the price of key assets, like food.

“Looking at the figures, you find that the number of corporations that controlled the wheat industry several decades ago was a relatively small number, but nowhere near as small as it is today,” Dearden said.

“But also those corporations are finding synergies with other parts of the food system that allow them to lock in their controls. So, for example, if you have a huge stake in the pesticide and chemical industry and you also have a huge stake in the seed industry controlling the seeds that farmers grow, that’s a huge synergy because you can ensure that your seeds work with your fertilisers or your chemicals and that they can only be used together and that gives you additional control of the industry.”

The ETC report “Food Barons 2022” found that 2020 “was a horrific year for food security and health – but a bonanza for Big Food and Big Ag [Agriculture].”

The researchers write that in the midst of the pandemic, “these Food Barons made the most of the converging crises in order to tighten their grip on every link in the Industrial Food Chain” undermining “the rights of peasants, smallholders, fishers and pastoralists to produce food for their own communities and many others.”

What are the companies we call “food barons”?

ETC has identified “just four to six” dominant firms which control every aspect of the food industry, from agriculture machinery to animal pharmaceuticals. Two of these are also named by Oxfam in its report about food billionaires: the two “dynasties” of Cargill and Walmart.

Cargill is a global food giant owned by the 11th richest family in the world and one of the world’s largest private companies, though its name is not on the high street and might be unknown to most. In 2017, according to Oxfam, the company was reported among the four controlling over 70 per cent of the global market for agricultural commodities. Fluctuations in the global price of grains have led to Cargill growing its profits and the Cargill family growing its collective wealth by 65% since 2020, with four members joining Forbes list of the richest 500 people in the world.

Cargill’s competitor Louis Dreyfus Co., an agricultural trading house, also made huge profits out of the troubles with the grain market.

Walmart, the supermarket chain which is ubiquitous in the US, has received around $15 billion in cash dividends from the company, as the goods sold in their stores got more expensive and the wages of its employees stayed mostly the same.

Is the food system broken – and can it be fixed?

The problem with the way the food system works at the moment, Dearden said, is that the industry is “in a tiny number of hands and effectively controlled on the basis of how much profit those companies can make” rather than preventing people from being hungry.

“Many food corporations, because they saw that there was going to be panic around the war in Ukraine, they raised prices. They used the crisis to profiteer, essentially,” Dearden said. “And it wasn’t just the food corporations, it was also people speculating on the price of food in the financial markets. And these markets are not only privatised and monopolised, they’re also increasingly financialised as well.”

Speculation around food prices in the financial markets actually contributed to rising food prices, Dearden said.

But there’s a growing movement for creating an alternative food system.

“We work a lot with groups in the Global South, particularly in many African countries and Latin American countries, particularly Brazil and they call themselves small farmer movements.

They are working to create a different food system which actually helps the ordinary small scale farmers that still, interestingly, produce most of the world’s food outside of these gigantic markets.

One way of creating an alternative food system would be to make small-scale farming a financially sustainable profession, without the constant competition of much bigger corporations.

“I think we have to convince people that if [small farming] is the kind of system that they want, if they want good quality food just grown by small producers who are reasonably local to where they are, that’s possible,” Dearden said.

“But we need to have a framework that can make that kind of business manageable, where people are not going to be on the breadline and are not going to be forced out of business by enormous supermarkets, by enormous grain producers, by the financial markets.”

Euronews has contacted Walmart and Cargill’s media team for comment.

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