A Tantalizing Glimpse At the Forbes Fortune
FOR years, one name has been conspicuously absent from the Forbes 400 Richest People in America - the Forbes family itself.
The size of the media empire's fortune has long been whispered and guessed at in New York financial circles. Speculation has grown with Malcolm S. Forbes Jr.'s free-spending bid for the Republican presidential nomination, which is already paying off in a third-place spot in the New Hampshire polls.
Now, for the first time, a small window has opened on the private finances of the multimillionaire magazine magnate.
In personal financial disclosure documents filed with the Federal Election Commission (FEC) this week, Mr. Forbes reveals that as editor in chief of the business magazine founded by his father, he paid himself $1.35 million last year.
Forbes says he will spend $25 million of his own money on the campaign. But an analysis of the assets and income listed in FEC documents indicates that Forbes magazine is the most likely source of the bulk of the campaign money.
Gretchen Morgenson, a campaign spokeswoman for Forbes, had no comment on where the candidate will be getting his campaign money.
Adding up his income from other sources, the Monitor calculates Forbes made between $2,272,380 and $6,720,222 last year. Forbes, known as Steve to his friends, also profited from 15 speaking engagements last year, which netted him an extra $176,140.
Although Forbes profited from selling ad space in the magazine last year, he didnt make much on his 500-acre farm in Bedminster, N.J. He estimates the farm brought in only $9,124.
Forbes also reports a stock-and-bond portfolio worth $2,190,000 to $5,851,000. He also reports he has more than $1 million in the Forbes thrift plan. But he lists his investment in Forbes magazine at more than $1 million.
This low valuation results from the Public Financial Disclosure Report which lists income or assets as $1 million or more. So, a $1 billion asset, for example, would simply be listed as over $1 million. Although Forbes magazine has never been up for sale, one analyst estimated its worth at about $500 million.
When Malcolm Forbes Sr. died in 1990, media analyst John Reidy, then with Drexel Burnham Lambert, estimated the Forbes empire of newspapers, real estate, art, and assets such as a 151-foot yacht and an island in Fiji as worth $500 million to $1 billion.
Forbess income and assets make him the richest GOP candidate on the campaign trail. He has already spent more than $4 million of his money mainly for advertising in New Hampshire.
Forbes has said he will spend as much as $25 million of his own money on his campaign. In a statement , Paul Sullivan, counsel to the Forbes campaign said: The loans Mr. Forbes made to the campaign disclosed on his FEC report came soley from personal assets and were properly disclosed on the statement.
Forbes has a series of four mortgages, obtained from the Bank of New York, on his New Jersey properties. Two of the mortgages are listed at more than $1 million. He has also borrowed between $500,000 and $1 million from the Bank of New York for an investment loan.
Forbes portfolio will be interesting reading for investors and money managers curious about where the owner of a investor-oriented publication puts his money. What they will find are a large number of diversified stock market investments. The Forbes filing includes 32 pages of stock and bond investments.
Forbes has invested a significant amount of his money in mutual funds, including such well known names as IDS, Putnam, and Templeton. But he also has invested in funds that invest in such countries as Argentina, Korea, Taiwan, and Brazil.
Forbess interest in foreign investments extends to individual stocks, including the telephone companies in Mexico and Spain. He lists a small amount of gold valued at $15,000 to $50,000. Forbes has advocated that the nation return to the gold standard.
For the most part, however, Forbes has invested in bellwether companies, such as IBM, Microsoft, Citicorp, and AT&T. Most of the investments are relatively small between $15,000 and $100,000 in value. Investors looking for tips in exotic companies will need to look elsewhere.
The only other candidate with a diverse stock portfolio is Sen. Bob Dole and his wife, Elizabeth. The Doles own stocks in Wal-Mart Stores Inc., Walt Disney Co., Intel Corporation, and General Electric, but the Doles portfolio is much smaller than Forbess.
Sen. Phil Gramm reports a very modest asset mix of residences in Texas, insurance annuities, mutual funds and stock in the Dole Food Company, and Enron Corp.
Sen. Arlen Specter, aside from some real estate investments and profit-sharing plans, includes his 1976 Jaguar as an asset. And, Sen. Richard Lugar, has concentrated almost all his investments in various Fidelity mutual funds.