Of all the world’s billionaires, with the exception of those from China, it is the French who have just enjoyed their most lucrative decade, according to a new UBS/PwC study.
LVMH Moet Hennessy Louis Vuitton SE boss Bernard Arnault and his ilk saw their wealth balloon more than fivefold to $443 billion between 2009 and mid-2020, fueled by Asian hunger for French-branded luxury goods and a global real-estate boom fanned by low interest rates. France is the land of what writer Pascal Bruckner calls “Bolshevism-lite,” where wealth is publicly hated but privately hoarded.
While the COVID-19 pandemic looks like the start of an altogether less bright decade, the rich are unlikely to let this crisis go to waste.
There are new Darwinist divides in the corporate world exposing a kind of gilded inequality at the top of society. Soaring tech businesses can shrug off social distancing while old-school brick-and-mortar firms can’t. Arnault’s fortune year-to-date has fallen by $19 billion as tourism and shopping take a beating, though he remains the fifth-richest man in the world, according to Bloomberg data. L’Oreal SA’s Francoise Bettencourt Meyers now faces stiff competition for her title as the world’s richest woman from Mackenzie Scott, Jeff Bezos’s ex-wife.
In France, the coronavirus crisis has prompted the ultra-wealthy to wake up to the need to pitch in more, even in a country where American-style philanthropy is usually viewed as the job of the state. Hermes International donated €20 million ($24 million) to Paris’s hospital association in May; LVMH gave ventilators and manufactured masks. The glare of public opinion can’t be so easily ignored, as the backlash over billionaire donations to help rebuild Notre-Dame Cathedral last year showed.
In this dog-eat-dog world, every small corporate victory counts. Arnault’s most visible bout of COVID-19 opportunism has been to try to walk away from LVMH’s mammoth $16 billion takeover of U.S. jeweler Tiffany & Co. after a drop in the target’s share price. Even if he fails, he will have bought time. Elsewhere, the plunging value of Altice Europe, the vehicle of telecoms mogul Patrick Drahi, led to the Franco-Israeli billionaire’s offer to take it private at an opportunistically low price of €2.5 billion. He faced the howls of minority shareholders.
The current climate is even offering tycoons the perfect chance to acquire more power and influence via Lagardere SCA, the once-mighty industrial conglomerate that has suffered mixed fortunes as a media-and-retail play under the family heir Arnaud Lagardere.
With the company under pressure from activist Amber Capital, France’s billionaires lined up to take a position: Vivendi SA’s Vincent Bollore, Marc Ladreit de Lacharriere and LVMH’s Arnault all bought shares recently, almost doubling Lagardere’s share price in the process. While at first it looked like a defensive whip-round to help Arnaud Lagardere, it’s now increasingly clear that Arnault and Bollore are in a face-off for control. The prize they’re all after? The company owns the grandaddy of glossy magazines, Paris Match, book publisher Hachette and politically influential radio and newspaper brands.
Billionaires have always been attracted to media titles, and they already have plenty of sway with President Emmanuel Macron. But the once-in-a-generation profit opportunity of the pandemic comes in the run-up to France’s presidential election in 2022.
This all might seem rather quaint compared to the space ambitions of Jeff Bezos and Elon Musk. France’s increasingly Jurassic jet set prefer radio brands to rockets. But that’s partly because the world is getting smaller for all aspiring Parisian elites. If things didn’t work out at home, they might once have dreamed of prop-trading in the City of London or launching a start-up in Silicon Valley. But globe-trotting across borders no longer looks quite such a sure thing. The future of French wealth lies in France, and not on Mars.
This isn’t just a French phenomenon: Of all the business and investment strategies being pursued by the world’s billionaires, the least popular is to relocate to another country, according to UBS/PwC’s study. Still, in a crisis like this one, there’s no place like Paris.
Lionel Laurent is a Bloomberg Opinion columnist covering the European Union and France. He worked previously at Reuters and Forbes.
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