How the 'Madonna' of Billionaires Is Playing His Fourth Act
(Bloomberg) -- First it was aluminum in Russia. Then oil, then plastics. Pop stars and sports followed. Now comes biotech.
Len Blavatnik, a man who a decade ago was frequently labeled, to his immense displeasure, an oligarch, is constantly reinventing. Deep into the fourth act of his peripatetic career, the 64-year-old billionaire is plowing his enormous fortune into investments miles removed from its gritty, post-Soviet origins.
“He is an anomaly,” said Samy Dwek, chief executive officer of the Family Office Doctor, a consulting firm. “A lot of families make money in a certain sector and their focus will stay there. Yes, they’ll do stuff outside to diversify but never to the same extent as Len. He is kind of like Madonna was in her career. A different person with every album.”
Blavatnik Inc. demonstrates how a fortune can be reshaped again and again. Despite -- or perhaps because of -- the jarring pivots, his net worth is bigger than ever.
Not only is Blavatnik one of the 20 wealthiest Americans, with a net worth of $38.3 billion, according to the Bloomberg Billionaires Index, he also topped this year’s Sunday Times Rich List as the wealthiest Brit.
It’s an extraordinary journey for Blavatnik, who has leveraged his connections from an ever-widening number of industries and power circles to burnish his wealth and reputation. Born in Ukraine, he was stripped of his Soviet citizenship in 1978 after moving to the U.S. These days he’s a dual citizen, with a British knighthood for service to charity from Queen Elizabeth.
Blavatnik declined to be interviewed for this story.
Russia was the source of his first billion. Specifically, the scramble for freshly privatized industrial assets, namely aluminum plants. A $7 billion windfall from oil company TNK-BP in 2013 accelerated his aggressive diversification. The sale ended Blavatnik’s ties to a turbulent partnership and its unavoidable Kremlin links and came just before the price of oil began a steady descent.
Blavatnik’s involvement with a Texas-based plastics giant constituted his second act. His merging of Houston oil refiner Lyondell with Dutch chemicals maker Basell on the eve of the financial crisis appeared doomed. But he persisted, loading up on shares as Leon Black’s Apollo Global Management Inc. acquired debt. LyondellBasell Industries NV’s stock has since risen almost 500% and generated $5.3 billion in dividends for Blavatnik.
In his third act, his name became associated with musicians, pro boxers and the sagas of European soccer rights. He bought Warner Music Group Corp. a decade ago, paying $3.3 billion for a business in crisis thanks to piracy and the internet. At the same time he was steering Warner through the music industry’s digital reckoning, he spent hundreds of millions of dollars building DAZN Group Ltd., a sports-streaming service that recently unseated Sky Ltd. as the main broadcaster of Italy’s top soccer league. More than a third of his fortune comes from his stake in Warner, now his single biggest asset, which has quadrupled in value since his purchase.
Blavatnik’s plowed some of his fortune in recent years into startups, with venture bets on tech, media and fashion. His portfolio boasts names like Spotify Technology SA, Square Inc. and Tory Burch. Soaring markets have swelled more recent investments, including a $600 million stake in digital real estate firm Opendoor Technologies Inc. and a $1.4 billion interest in cloud software-maker DigitalOcean Holdings Inc.
The corporate stable of his diverse investments is a New York-based holding company called Access Industries that deploys money across seven sectors, with investments as varied as the “Wonder Woman” movies and the Faena Hotel Miami Beach. Its tech ventures arm is headed by Pueo Keffer, a 39-year-old former partner at VC firm Redpoint Ventures, while its real estate division is led by Jonah Sonnenborn, formerly of Steve Mnuchin’s Dune Capital.
Blavatnik has increasingly focused on early-stage biotech, an industry attracting unprecedented interest amid the pandemic and one where his deep pockets have proved particularly handy.
“We focus on areas of major unmet need,” said Liam Ratcliffe, who oversees biotech investments at Access.
The former worldwide head of clinical research and development at Pfizer Inc., Ratcliffe was recruited from a life-sciences venture firm to join Access in 2019. Their emphasis is on diseases that are measurable and where they can “set a bar for new treatments that could potentially be cures or major modifiers,” the South African-born doctor said.
One example is Day One Biopharmaceuticals Inc., which develops therapies for pediatric cancers like childhood low-grade glioma, a type of slow-growing brain tumor. The company’s stock price, up 44% since its May initial public offering, values Blavatnik’s 15% stake at about $210 million.
Other bets include Passage Bio Inc., a gene-therapy company that targets rare neurological disorders, and Eliem Therapeutics, a clinical-stage biotech that’s developing new potential treatments for chronic pain and depression, among other ailments. It went public on Tuesday, valuing Blavatnik’s 20% stake at $89 million.
While the pandemic hasn’t altered the firm’s thesis, “it’s created awareness about the potential for science and biotech to transform health,” said Ratcliffe, who declined to share the value of the portfolio.
If tech reflects Blavatnik’s desire for prominence and media and entertainment his fondness for glamor, biotech is an extension of his zeal for science. The son of two teachers, he distributes millions annually in unrestricted funds to early-career researchers in the U.S., the U.K. and Israel through his Blavatnik Awards for Young Scientists. Past winners include epidemiologist Alison Galvani, praised by Anthony Fauci as an “international star” in the field of infectious-disease modeling and “major” contributor to managing the Covid-19 outbreak.
His family foundation has donated more than $280 million in the past decade to fund scientific or medical research and fellowships at places like Yale, Harvard and Stanford universities, according to Bloomberg calculations. Including non-science departments, he’s given almost half a billion dollars in total to higher education.
Those institutional ties have been useful in helping Access get in on popular deals at a time of fierce competition and high valuations, Ratcliffe said.
Gene-therapy company Passage Bio, for example, sprung from biomedical research at the University of Pennsylvania, to which Blavatnik donated $2 million in 2018 for fellowships intended to empower students to “pursue high-risk, high-reward projects in the lab.”
“This is a relationships industry,” Ratcliffe said. “Because the foundation is supporting so much basic research and translational work, we get a warm reception.”
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