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Guess the Billionaire: Who is the Mystery Quintess Investor?
| Written by Alec Rosekrans 05/05/2008 |
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Quintess, LRW set tongues wagging last month when it revealed that an individual investor took a $210 million stake in the destination club’s parent company. That $210 million is no small chunk of change of course, but adding even more to the intrigue was the news that the investor, who prefers to remain anonymous, is a member of that most exclusive of clubs, the Forbes 400 list of richest Americans.
In an industry not necessarily known for intrigue, the news has inspired quite a few free-wheeling theories on the identity of Quintess’ wealthy benefactor. Are we looking for a needle in a haystack? Perhaps, but Quintess has been kind enough to divulge one choice tidbit: the investor’s fortune comes from real estate. Makes sense, seeing as destination clubs are essentially real estate holding corporations passing time in the travel and leisure industry. With this nugget of information, the field of potential candidates is narrowed to the 33 that Forbes have grouped under the real estate category. From here, of course, it’s still anyone’s guess.
Halogen Guides Suspects
Donald Trump: With a net worth of $3 billion, “The Donald” could easily afford an investment of this magnitude, and with a strong interest in resort real estate, a destination club stake might make a lot of sense. On the other hand, anonymous investments aren’t exactly the limelight-seeking Trump’s style. After all, has his hairness ever passed up the opportunity to put his name on something?
Timothy Blixseth: It’s been a rough year for the western real estate maverick. His divorce from wife Edra has taken a nasty turn, and on top of that a group of Yellowstone Club members led by cycling great Greg Lemond have filed suit against him. With control of the Yellowstone Club still up in the air—and likely to be decided in a courtroom—it’s possible that Blixseth considered an investment in Quintess as a hedge against the sinking fortunes of his own beyond-ultra-luxury club.
J. Joseph Ricketts: The TD Ameritrade founder has amassed a fortune of over $2.6 billion, but his first stab at a destination club, the ultra-luxury Ciel, stopped seeking new members last year and changed its focus to land conservation. Would Ricketts consider another stab at the industry with an investment in Quintess?
Jorge Perez: The condo-king of Florida took a hit last year as the Miami real estate market turned sour. But Perez has more than buoyed himself with substantial real estate investments throughout Latin America. Always on the lookout for new markets, could Perez have taken an interest in destination clubs?
Mortimer Zuckerman: The real estate and print (read:old) media impresario might look upon a destination club investment as a way to freshen his staid image. It would certainly do more for it than his frequent appearances on the McLaughlin Group.
Any more shots in the dark? Leave a comment and let us know who you think Quintess’ billionaire angel is.
Reader Feedback
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From: DC4MSMonday, May, 05, 2008 at 08:17 PM
This is a well guarded secret. http://www.destinationclubforums.com/f19/who-undisclosed-quintess-forbes-400-investor-698.html
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From: BethesdaMonday, May, 05, 2008 at 08:20 PM
Halogen - why don't you give us the list of all 33 so we can look at the other suspects?
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From: NickCAMonday, May, 05, 2008 at 08:25 PM
Can't be Trump. He doesn't operate that way. He puts his name on OTHER people's projects. He doesn't have the cash to actually own anything ($3B net worth is a joke).
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From: RossMonday, May, 05, 2008 at 08:41 PM
Anyone on the Forbes list isn't a real Quintess member - they probably own homes wherever they want. They ain't gonna wait in line for their favorite property like the rest of us lower Richistan knuckleheads. So it's someone who knows the current owners. Who lives in the silicon valley area? Carl Berg & John Sobrato in Atherton Richard Peery & John Arrillaga in Palo Alto I'm going to say Sobrato since he's got 3B and the rest have only 1.5B. At 1.5, 200M is a big chunk to be anonymous and passive. Plus Sobrato has experience and holdings in residential. Peery/Arrillaga are commercial. His homeboy Carl Berg also has resi mojo, but I'm betting on Big John.
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From: CaboWaboMonday, May, 05, 2008 at 08:47 PM
I agree with Ross. It has to be someone with residential or resort project experience. These guys need to break the code on scaling like Exclusive Resorts but maintaining a boutique-like feel.
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From: MicroQuintessMonday, May, 05, 2008 at 09:03 PM
How about Bill Gates. He was a member of Yellowstone Club and is a tech guy with one of the largest and most high tech homes in America. Why not go head to head with Steve Case just for ol' times sake? Case went from AOL to Revolution Health to Exclusive Resorts. Gates goes from Microsoft to ending malaria to... Quintess??
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From: BethesdaMonday, May, 05, 2008 at 10:13 PM
Guys, Did you not read the post? It's not a tech guy, it's someone who earned their $$ in real estate. Not Cuban, Gates or Dell.
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From: Alec RosekransMonday, May, 05, 2008 at 10:35 PM
Here are the 33 members of the Forbes 400 whose fortunes are primarily made from real estate (in descending order of networth): Donald Bren, Eli Broad, Samuel Zell, Paul Milstein & family, Stephen Ross, Leonard Stern, Matthew Bucksbaum & family, Richard LeFrak & family, John Sobrato & family, Donald Trump, Melvin Simon, Theodore Lerner, Mortimer Zuckerman, Edward Roski Jr, Neil Bluhm, Archie Aldis "Red" Emmerson, Alan Casden, Sheldon Solow, Jerry Speyer, George Argyros, Edward Debartolo Jr, Jorge Perez, A Alfred Taubman, Igor Olenicoff, Richard Peery, John Arrillaga, Carl Berg, Steven Roth, Tamir Sapir, Herbert Simon, Timothy Blixseth, Walter Shorenstein & family. You can check out profiles of each of them here: http://www.forbes.com/lists/2007/54/richlist07_The-400-Richest-Americans-Real-Estate_8Rank.html
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From: InsiderTuesday, May, 06, 2008 at 08:35 AM
You are all missing the point. It truly doesn't matter who invested this stake, the real question is what did they get for the investment. This business is very capital intensive and, if you adhere to GAAP principles, the Refundable Membership Deposit MUST be held as a long-term liability on your balance sheet. Hence, the ROI is a very long cycle that assumes real estate appreciation over 10 to 20 years with a real estate divesture schedule turning every home approximately 7 years from purchase(business model only performs when you purchase land pre-construction which Quintess has not done until Cabo). Noting that this Billionaire will not see any return on his investment for a minimum of 5 years, he must have negotiated both a large equity stake and profits from ongoing operations. As a wise book once said, "The borrower is slave to the lender." This capital infusion will force Quintess to act in ways to ensure this investor sees his return quickly and may take a club shutdown at 10 years to recoup the original capital/any appreciation. Time will tell, but it is always disconcerting when a club seeks outside capital to grow because they were unable to flourish organically.
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From: Amy GundersonTuesday, May, 06, 2008 at 09:43 AM
Great comments and musings on the identity of this investor. When I spoke to Quintess last month about this they were clear that it was an equity investment. Perhaps the investment is a sign that it wants to be a bigger player in the destination club space, whether through growing the existing club or starting new Quintess clubs in other corners of the globe which we wrote about here http://realestate.halogenguides.com/archives/1147-quintess-co-founder-no-acquisitions-yet-but-new-club-start-ups-possible As for the identity of the investor, the only other clue I got from the Quintess folks was that they had made their riches in commercial real estate.
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From: loyal to Tim Tuesday, May, 06, 2008 at 11:32 AM
Tim Blixseth has plenty of money and even has the money to pay off Greg Lemonde but refuses to do so as he believes its not correct as to why he should pay so much money. Time will tell in the Montana who wins control. We are a real estate company, thats what we do.
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From: MicroQuintessTuesday, May, 06, 2008 at 12:04 PM
@Bethesda: what if the real estate hint is just a red herring. given Insider's points about ROI, seems like someone who made funny money in tech is more likely to invest in a company formed by tech guys (excite@home) than a smart real estate mogul.
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From: arosekransWednesday, May, 07, 2008 at 12:51 PM
*GASP* Surely you're not suggesting that Quintess would dissemble are you!?!
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From: IndustryGuyMonday, May, 05, 2008 at 06:42 PM
The Quintess founders are from the tech arena, so I think its a younger, internet-made billionaire. Perhaps Michael Dell or Mark Cuban.