How to invest it?

Even a humble savings account will net £251m in interest a year, here’s – How to invest it?

HOW do you invest a windfall of more than £5 billion for a man who is already a billionaire several times over?

The normal concerns of a 38-year-old man — buying a bigger home, keeping up the mortgage payments and saving for a decent pension — hardly apply to Roman Abramovich.

He already owns homes in London, Moscow and the French Riviera and with a fortune of several billions of pounds he is unlikely to be facing hardship in retirement.

Patrick Connolly, of John Scott & Partners, a firm of independent financial planners, says Mr Abramovich’s first step should be to put the windfall into offshore money market accounts. He said: “We would then establish a strategy appropriate for him, depending on his circumstances and appetite for risk.”

Justin Urquhart Stewart, of Seven Investment Management, a firm of investment managers, said he would put 10 per cent each into bonds, private equity, hedge funds, commercial property and commodities, with smaller amounts in gold, cash and other assets such as antiques and jewellery. He would keep 25 per cent in shares and bonds to set up a Bill Gates-style foundation that could make donations to good causes.

If Mr Abramovich wanted to bring his windfall onshore and invest it in a savings account, he could put it in Halifax’s Web Saver, currently paying a gross rate of 4.65 per cent a year. He would earn gross interest of £251.1 million a year; which is more than enough to plug the £87.8 million loss made last year by his football club.

Although he is not in any need of an additional home, Mr Abramovich might consider some of the top five properties from Savills, the up-market estate agents, as potential investments.

A sum of about £7.8 million would buy him a traditional Highland estate in Sutherland, Scotland, with listed lodge, farms and a shoot. For slightly more than £70 million he could acquire Updown Court, in Windlesham, Surrey, a very large, recently built modern palace in extensive grounds.

Mike Levi, of Cardiff University, said that he expected Mr Abramovich’s windfall to be good news for Chelsea fans. He said the millions that Mr Abramovich has poured into the club appeared to be a late modern equivalent of the huge charitable foundations set up by entrepreneurs such as John D. Rockefeller and Henry Ford, the oil and car magnates of 20th-century America.

He said that businessmen in the past who had enjoyed fabulous wealth through tough business practices had set up academic institutions and charitable foundations that promoted learning.

Landmark buildings that act as a testament to the wealth and power of their creator have also been a favourite investment vehicle. The Rockefeller Centre’s large complex of stately towers still dominates the heart of New York City, some 70 years after they were built.

Dr James Backhouse, of the London School of Economics, said: “Art galleries, management schools and institutions that stretch the education, spirituality and ethics of the populace are favourite choices. These projects play to the ego, giving the benefactor the opportunity to have their name on the building.”

By Mark Atherton and Joe Morgan

Source: Times Online

Photo credit: Merrill College of Journalism Press Releases via Visual Hunt / CC BY-NC