Half a billion dollars on paper in a single year… How did James Packer do it?
The post Here’s how James Packer made $500 million from investing in shares this year appeared first on The Motley Fool Australia. –
Business magnate James Packer might be most well known for his success in Crown Resorts Ltd (ASX: CWN). But, the last year has shown Packer’s ability to make a pretty penny in tech shares as well.
The Australian billionaire tends to make his investments through the private company known as Consolidated Press Holdings (CPH). In fact, Crown Resorts’ largest shareholder is Packer via the CPH holding company. However, the gaming and entertainment group played less of a role in the monumental $530 million profit that CPH booked in the last financial year.
Instead, the bumper profit was beefed up by investments in various tech names.
Tech shares deliver for Packer’s pocket
According to documents obtained by The Australian, James Packer’s CPH pulled a profit that puts it among one of the biggest for an Australian private company in FY21. This result is a positive contrast to the $400 million paper loss recorded by CPH in the previous financial year — but what helped the billionaire’s net worth?
In FY21, the assets held on the balance sheet of CPH rose $480 million in value. The company also cashed in on $114 million worth of various assets during the period. This allowed Packer to pay himself a considerable $111 million dividend from his company.
A large chunk of the returns was from Packer’s investment in a number of technology shares. Examples of this include the Southeast Asian real estate marketplace PropertyGuru. The fast-growing business is set to list on the Nasdaq for US$1.8 billion.
In addition to this, it is believed Packer has around $100 million invested directly in the venture capital firm, Square Peg Capital. This gives the Aussie business persona exposure to tech startups such as Airwallex, Canva, Fiverr International Ltd (NYSE: FVRR), and Stripe.
After listing in 2019, the share price of Fiverr soared more than 200% during the last financial year. Although, possibly one of the most successful startup investments in 2021 was graphic design platform Canva.
The Sydney-based company blew minds with its flying valuation — from ~US$6 billion to ~US$55 billion in the space of 12 months.
Not Packer’s first rodeo
James Packer’s foray into investing in ‘tech’ shares is not his first. Throughout the 2000’s, he hit some home runs within the emerging online classifieds space. In 2003, Packer invested $33 million in SEEK Limited (ASX: SEK), giving him a 25% stake in the company at the time. He went on to sell his $33 million investment in the job advertisement platform for $440 million.
Similarly, in 2005 Carsales.Com Ltd (ASX: CAR) caught the eye of the businessman. As a result, the Packer family acquired a 41% stake in the company for $100 million.
For reference, Carsales today has a market capitalisation of $7.08 billion.
The post Here’s how James Packer made $500 million from investing in shares this year appeared first on The Motley Fool Australia.
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited and carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.