Republic’s richest 500 — 98% are self-made

IRELAND has as many as 500 tycoons who together are worth €67 billion — and most are self-made, a report has revealed.

A mere 10 of Ireland’s 500 super-rich men and women have inherited their wealth, or 2%, compared with 18% of tycoons worldwide.

Of Ireland’s 500 wealthiest individuals, two-fifths made their riches in the construction industry or through property deals, while 50 are still involved in running one of the businesses that gave them their fortune.

Report authors DKM Economic Consultants based part of their study on figures supplied by the Sunday Times Rich List of Ireland’s 250 wealthiest individuals.

Among the country’s tycoons are insurance and construction magnate Seán Quinn and family, whose wealth is estimated at €4.7bn; Cork-born phone entrepreneur Denis O’Brien (€2.5bn); newspaper publisher Tony O’Reilly (€1.9bn) and horse-racing investor John Magner (€944m).

“The majority of super-rich individuals in this country are the first to experience wealth in their families on this scale,” said Mark Daly, of the Investec private bank.

He said the growth of Ireland’s super-rich was a “tribute to the entrepreneurial talent” in Ireland.

But the DKM Economic Consultants report sounded a note of caution for Ireland’s super-rich, saying their hard-won fortunes are at risk from the property downturn and poorly performing stock market.

“This leaves them exposed to high risk and losses,” said the report.

DKM Economic Consultants said Irish tycoons “stuck with what they knew” and put their money into investments they personally felt happiest with. Instead, the super-rich ought to look at overseas tycoons, almost a fifth of whom 18% inherited their wealth.

“This group... is happy to delegate the management of their [investment] portfolios to private banking houses and often insist that their children be educated in how to manage their inheritance.

“Philanthropic giving and the passing on of wealth in the form of trusts are very significant among the international [super-rich] and are often designed to create a legacy and to protect family fortunes over the generations.”

Overseas tycoons tended to spread their money around instead of concentrating their investments in property, shares and construction, as Ireland’s super-wealthy tend to do.

The super-rich abroad favoured complex investments like hedge funds (akin to long-term bets on the price of goods like oil) as well as investing in private businesses.

DKM Economic Consultants reckons each of Ireland’s 500 tycoons has at least €10m spare cash to invest, but that their fortunes could suffer in the future without a change in approach.

“There is a risk that the new Irish wealth will diminish through bad allocation of funds,” the authors said. “At best wealth will grow more slowly than could potentially be achieved.”