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Virgin Group founder Richard Branson had almost $2 billion tied up in global stock markets a year or so ago, largely from several cash-burning US companies listed through blank-check firms.<\/p>\n
Steep slumps in those US stocks have since cut their collective value by as much as 95%, and now, with Nationwide Building Society\u2019s announced all-cash takeover of Virgin Money UK Plc, the publicly traded component of Branson\u2019s wealth will soon nearly vanish.<\/p>\n
Overall, Branson\u2019s sinking stock holdings have resulted in his net worth falling by roughly half since mid-2022 to about $3 billion, according to the Bloomberg Billionaires Index, underscoring how the post-pandemic economy is ravaging one of Britain\u2019s biggest self-made fortunes. Outside his Virgin Money stake, which is worth roughly \u00a3413 million ($520 million) based on the terms of Nationwide\u2019s offer, his disclosed publicly traded holdings total less than $75 million.<\/p>\n
\u201cIt\u2019s hard in these times when things go wrong,\u201d said Claire Madden, managing partner of London-based private equity firm Connection Capital. Branson\u2019s empire \u201chad a big jolt from the side through Covid.\u201d\u00a0<\/p>\n
Branson\u2019s fading stock assets limit his options to inject cash into his sprawling empire as parts of it still struggle to recover from the pandemic, which forced the 73-year-old British billionaire to leverage his listed holdings to prop up closely held Virgin businesses.<\/p>\n
Branson sold more than $1 billion of shares in 2020 and 2021 in Virgin Galactic Holdings Inc., his space-tourism company that merged months before the Covid-19 outbreak with a blank-check firm founded by Chamath Palihapitiya.<\/p>\n
Those sales helped finance a \u00a31.2 billion rescue package for airline Virgin Atlantic, a flagship business among the more than three-dozen companies in Branson\u2019s closely held empire. Virgin Group also helped put \u00a350 million last year into its namesake gym club chain to speed up its recovery from the pandemic.<\/p>\n
A representative for London-based Virgin Group, which doesn\u2019t report consolidated financials, declined to comment.<\/p>\n
Branson\u2019s fortune peaked at almost $8 billion in early 2021 as record-low interest rates fueled a pandemic bull market. Virgin Galactic\u2019s stock climbed nearly 400% during the run up and eventually comprised almost half his total net worth.<\/p>\n
Shares of the Las Cruces, New Mexico-based company have since slumped about 98% from their 2021 peak after grappling with in-flight issues and financial results that fell short of Wall Street expectations. Shares of other listed firms arising from Branson\u2019s dealings with special purpose acquisition companies \u2013 or SPACs \u2013 have fared even worse.<\/p>\n
Satellite-services firm Virgin Orbit Holdings Inc. fell into bankruptcy last year, less than 18 months after completing a merger with blank-check firm NextGen Acquisition Corp II. Shares of genetics-testing company 23andMe Holding Co. and e-commerce firm Grove Collaborative Holdings have also slumped more than 90% since merging with Virgin Group\u2019s own SPACs as recently as 2022.<\/p>\n
The De-SPAC Index, a basket of companies that completed their tie-ups, has fallen more than 20% this year as many firms struggle to become profitable amid higher financing costs. That compares with the nearly 10% rally in the S&P 500 Index.<\/p>\n
After founding Virgin Money in 1995, Branson upped his bet in 2011 by leading a \u00a3747 million deal to buy UK lender Northern Rock from the British government following the bank\u2019s collapse in the early stages of the global financial crisis.<\/p>\n
Seven years later, Branson more than doubled his original \u00a350 million investment when Clydesdale Bank agreed to acquire Virgin Money to form the UK\u2019s sixth-largest lender in a \u00a31.7 billion takeover. He retained a roughly 13% stake in the merged business.<\/p>\n
\u201cWe were ready for a new challenge,\u201d Branson said in a November blog\u00a0post<\/a>\u00a0about starting Virgin Money. \u201cIt was a chance to change a stagnant industry.\u201d<\/p>\n Nationwide and Virgin Money are now set to overtake NatWest Group Plc as Britain\u2019s second-largest provider of home loans behind only Lloyds Banking Group Plc. The deal is expected to be completed in the fourth quarter.<\/p>\n Other Virgin Group assets are also propping up Branson\u2019s fortune even as his SPAC bets drag it down.<\/p>\n His holding company owns a five-star hotel in Mallorca, where real estate prices have recently surged, while his airline has outlined plans for returning to profit this year. Virgin Group has also launched new divisions in the hotel and cruise-ship sectors, while its venture arm previously made early-stage investments in companies including Pinterest Inc., Block Inc. and Wise Plc.<\/p>\n Virgin Group\u2019s licensing arm, meanwhile, is receiving more income than before the pandemic, giving it an estimated value of about $1 billion and making it Branson\u2019s biggest individual asset, according to Bloomberg\u2019s wealth index.\u00a0<\/p>\n That unit is set to keep receiving income through Virgin Money for years after the Nationwide deal closes, underscoring how some of the his most conventional deals \u2013 not loss-making SPAC firms \u2013 are now powering his empire.<\/p>\n \u201cYou can only do those non-profit-generating sort of businesses to a certain extent,\u201d Madden said. \u201cIt\u2019s about making money at the end of the day.\u201d<\/p>\n<\/div>\nMallorca Hotel<\/h2>\n
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