After coming to prominence as one of the original “barbarians” of the 1980s junk-bond-fuelled takeover boom, Ronald Perelman settled into life as a collector. As well as a profusion of companies, a vast art collection and the usual stack of properties and yachts, “the pugnacious dealmaker” accumulated five marriages, eight children, a $12bn-$14bn fortune and “countless legal bills from run-ins with family members, business associates and regulators”, says the Financial Times. His biggest bauble is a controlling stake in cosmetics giant Revlon.
A complicated man
But something seems to be up, says Town & Country. Perelman has been unloading assets. “A lot of them. Rapidly.” In July he sold a Matisse and a Miro at Sotheby’s for a combined $37.2m (a disappointing price: the estimate had been $53m) and there are reports of more treasures in the pipeline. Perelman’s investment company, MacAndrews & Forbes, has also been making disposals, recently selling a $1bn tranche of shares in Scientific Games, a maker of casino, interactive and instant lottery games, as well as its majority stake in the maker of Humvee military Jeeps.
We should beware jumping to conclusions: “billionaires – especially those who leverage and buy out – unload pricey assets all the time”. But Perelman’s net worth has plummeted from $19bn in 2018 to $4.2bn, according to the Bloomberg Billionaires index, prompting speculation that he’s running out of money. Denials that he is selling his 57-acre East Hampton estate for $180m in a so-called “whisper sale” haven’t dissuaded the sceptics.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Perelman is a “complicated guy”, still best known on Wall Street “for his highly improbable, but ultimately successful” $2.7bn hostile takeover of Revlon in 1985 when he was 42. A deeply religious Orthodox Jew of Lithuanian descent, he had moved to New York from Philadelphia in the late 1970s “to get out from under the yoke of his father, Raymond”. Young Ron was sweeping floors in his father’s factories aged 12 and, after university, became his father’s foundry manager. His escape ticket was marriage (his first) to a real-estate heiress who helped finance his first independent venture: a chain of jewellery stores, says Fortune. Shortly after, Perelman acquired a stake in MacAndrews & Forbes, a licorice-extract specialist that he built into his main holding company. In the high-octane environment of Wall Street in the 1980s, his dealmaking career was soon on “the takeoff runway”.
Perelman ended up nurturing Revlon for 35 years, says Vanity Fair: his daughter Debra is currently CEO. But, lately, things haven’t been going well. Last year, Perelman hired Goldman Sachs to explore a possible sale. But there have been problems restructuring Revlon’s $3bn debt. Following a refinancing in May, Moody’s downgraded it further into “junk” territory. The stock is down roughly 68% in 2020.
If Perelman is downsizing, friends insist it’s because he has “learned to love and appreciate the bourgeois comforts of family and home”, says Town & Country. Nonetheless, it feels as if roles have been reversed. The barbarians are knocking at the gate again – and this time it’s Perelman’s.
-
How retail investors can gain exposure to Lloyd’s of LondonIt’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The flaw in Terry Smith’s strategy at FundsmithOpinion Fundsmith has invested in some excellent companies, but it has struggled to decide when to sell, says Max King
-
How retail investors can gain exposure to Lloyd’s of London
It’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The goal of business is not profit, but virtueOpinion Serve your customers well, and the profits will follow, according to a new book. It rarely works the other way around, says Stuart Watkins
-
Earnings estimates are a rigged game – especially in the USThe number of US stocks beating earnings estimates tells us only that guidance has deliberately been set too low
-
Why is Britain's industrial base crumbling?Opinion More and more factories in the UK are closing, and the government doesn’t seem to care. What’s going on?
-
Scotland's former first minister Nicola Sturgeon leaves behind a toxic legacyOn the left, Nicola Sturgeon is seen as something of a political hero. That makes sense… but only if you exclude her actual record in office
-
Sachin Dev Duggal's Builder.ai – the first big bust of the AI boomSachin Dev Duggal's Builder.ai start-up claimed it could use artificial intelligence to build apps. Its revenues turned out to be equally artificial
-
Alex Karp: can Batman save America?The US governing elite needs to take on the bad guys, says Alex Karp, who sees himself as the caped crusader to lead the battle
-
In defence of Donald TrumpOpinion Doom-mongers thought the world would end with the election of Donald Trump. Think again, says Max King
