James Packer turns tech investor – makes $500m profit

The billionaire’s private investment company returned to profit this year, thanks to buying and trading technology stocks as well as an uplift in his Crown shares.

James Packer still has his Crown shares, but is likely to be increasingly an investor in tech stocks and other ventures when he eventually sells his stake. Picture: Aaron Francis / The Australian

James Packer’s private company has made a $500m profit thanks in part to a string of American technology stock investments, in a preview of what the billionaire may do with the funds he would earn from selling his long-held stake in Crown ­Resorts.

The latest accounts of the billionaire’s Consolidated Press Holdings, obtained by The Australian, show Mr Packer’s paper fortune surging by about $600m after a bumper 2021 that was also boosted by a rise in the market value of the gaming company.

CPH made a net profit of $530m in the year to June – and paid Mr Packer a $111m dividend – the accounts lodged with the corporate regulator on Tuesday evening reveal.

The result is one of the biggest for an Australian private company this year and, while it is mainly due to the increasing value of Mr Packer’s investments, it remains larger than other high-profile family investment companies such as Angela Bennett’s Wright Prospecting and Michael Hintze’s hedge fund CQS.

It is also a significant turnaround from the $400m paper loss Mr Packer incurred in 2020.

CPH, which houses Mr Packer’s assets that include his 37 per cent stake in Crown and a collection of private holdings, recorded a gain of almost $480m on the value of the assets on the balance sheet in 2021. It also paid itself about $151m in management fees from the strong performance of subsidiaries and reaped $114m from the sale of various assets throughout the year.

Key to the result was a new focus on buying and trading technology stocks, particularly companies listed on the Nasdaq and New York Stock Exchange, but also some pre-IPO tech investments. One big success has been in Southeast Asian digital real ­estate marketplace Property­Guru, which will go public on the Nasdaq in a $US1.8bn deal with a special purpose acquisition company backed by billionaires Richard Li and Peter Thiel.

Sources with knowledge of the investments said CPH also has about $100m directly invested in venture capital firm Square Peg Capital, led by Andrew Bassat, and both firms have invested in companies such as the NYSE-listed ride sharing firm Uber.

Another success for CPH has been Israeli freelance marketplace ­Fiverr, which has surged by about 400 per cent since floating on the NYSE in 2019.

So well have the technology investments performed that they offset the impact of a lack Crown dividends.

The casino group had previously paid Mr Packer about $73m every six months due to a dividend policy of paying shareholders interim and final dividends of 60c a share – a major source of income for Mr Packer.

The billionaire is also considering the merits of the latest takeover bid for Crown by global private equity giant Blackstone, which has offered $12.50 a share for the gaming and resorts company that Mr Packer and his family have been involved with for the best part of three decades.

Accepting the offer would hand the businessman $3.12bn as Crown’s largest shareholder. The Australian revealed last week that Blackstone had begun direct discussions with CPH executives in an effort to convince Mr Packer that the bid has merit and to raise the pressure on Crown’s new board and management team.

Meetings between Blackstone and CPH officials are understood to have taken place last week and the private equity giant has told Crown it could conclude due diligence within four weeks and complete the transaction early next year.

Mr Packer, whose significant influence over Crown was scrutinised in three inquiries into the ­casino operator, has yet to make any public comment about the Blackstone offer.

He has agreed to a selldown of his Crown stake with the NSW regulator by 2026, though the Victorian royal commission into Crown recently recommended Mr Packer sell down his stake to 5 per cent by September 2024.

Such a move would signal the end of Mr Packer keeping the bulk of his wealth in a single large asset such as Crown or, previously, the Nine Network. Instead, CPH would become a family office and make a string of investments with the proceeds, as other billionaires such as Frank Lowy with his Lowy Family Group have done in recent years.

CPH’s accounts lodged with the Australian Securities & Investments Commission are not consolidated, so do not give a complete picture of Mr Packer’s wealth.

But they do at least provide a snapshot of the large amount of assets under his control and the fluctuations in the value of his holdings each year.

The accounts show CPH’s net assets rose about $540m, or 14 per cent, to end the financial year at about $4.42bn.

There was an increase of almost $500m in financial assets, though interest-bearing liabilities or borrowings from other subsidiaries and holdings in the wider CPH empire increased about $150m to $5.03bn.

CPH also retains an interest with Hollywood actor Robert De Niro in a $US250m luxury resort project called Paradise Found Nobu on the Caribbean island of Barbuda that is still to be developed and has been held for that purpose during the pandemic.

CPH also owns a block overlooking the Sea of Cortez, 10 minutes from San Jose El Cabo in Mexico and where Mr Packer is building a holiday mansion, and other properties around the world including a $60m apartment being built at Crown’s Barangaroo complex.

There is also a share in NRL club South Sydney on the CPH balance sheet that Mr Packer holds alongside actor Russell Crowe and the club’s newest investor, Atlassian billionaire co-founder Mike Cannon-Brookes.

CPH also has a 40 per cent holding in swimwear business The Upside, founded by Mr Packer’s first wife Jodhi Meares, and a stake in successful peer-to-peer lender SocietyOne, though the billionaire has largely avoided ­directly investing in operating companies in recent years.