Packer’s quandary: how to spend $3.3bn

James Packer with his family in Cabo San Lucas, Mexico, on Thursday. Picture: Ana Badillo

So how does international billionaire James Packer, with access to the world’s best and brightest minds, go about spending $3.3bn in free cash earned after the sale of his 37 per cent stake in Crown Resorts to investment behemoth Blackstone?

Seems to Margin Call like a champagne problem, but presumably one with mixed emotions for the 54-year-old, who’s stepping away from 23 years building Crown into a global brand and a centrepiece for Sydney’s Barangaroo precinct.

What we do know is that Packer has recently formed what he terms “an investment committee” at his private Consolidated Press Holdings to consider, essentially, how to invest the money and where to put it.

“I want to learn from my mistakes,” Packer told Margin Call from his new $50m oceanfront mansion in Cabo San Lucas, Mexico’s playground for the rich and famous

He said the newly appointed committee, on which he will sit alongside CPH chief executive and longstanding lieutenant Guy Jalland, would introduce a “discipline” to the CPH investment process.

“My great friends Hamish Douglass and Daniel Nadler have agreed to be on CPH’s investment committee going forward,” he revealed.

Douglass has long been close to Packer. The billionaire was a foundation investor in Douglass’s Magellan Financial but sold out in 2013, in a move Packer later described as a mistake.

James Packer with his children Jackson, Indigo and Emmanuelle at their mansion in Cabo San Lucas, Mexico. Picture: Ana Badillo

Recent tumult at Magellan has seen Douglass step aside as executive chair and chief investment officer in favour of a diminished role as a “consultant” to the fund manager, following a period of personal leave.

His reduction in duties should leave plenty of time for Douglass, who was sighted aboard Packer’s gigayacht IJE last August as it cruised the French Riviera, to focus on the redistribution of Packer’s newly liquid billions.

Canadian-born Nadler, 39, is a technology entrepreneur and futurist who founded Kensho Technologies, a machine intelligence company that was sold for $US550m to S&P Global in 2018. The resume also includes director of research for financial technology at Stanford University’s School of Engineering.

“I am extremely grateful to Hamish and Daniel for their friendship and support and I look forward to working with them,” Packer said.

But a few figures who were historically close to Packer are conspicuously absent from the committee. They include former Macquarie banker Ben Brazil, a former Crown director, who is now based in London and has co-founded his own shop, FitzWalter Capital.

Also missing is Packer’s one-time go-to investment banker Matthew Grounds, who since exiting Swiss giant UBS has established Barrenjoey Capital, of which Douglass’s Magellan was a foundation investor.

Packer says he plans to visit Sydney in March with his family, declaring them the centre of his life. Simply being happy can be the most important pursuit.

Keen eye on AI

Having said all of that, Packer did provide Margin Call with a couple of preliminary thoughts on where he’s looking to deploy some of the loot he’s got lying around.

“Artificial Intelligence in particular is a subject I have been introduced to by Daniel (Nadler) and it is obviously fascinating,” he said.

And Crown, he added, was not the end of the road when it came to investing in listed markets, even with the inevitable profile and headaches associated with all of that.

“Hamish (Douglass) and I will be looking at the listed market closely for opportunities. My timing on the Crown sale looks lucky and I know I can’t make the same mistakes I’ve made in the past when cash burnt a hole in my pocket.”

Easily springing to mind here is Packer’s involvement with entrepreneurs Jodee Rich and Bradley Keeling’s failed telco, One.Tel, along with his investment in Network Ten, which was placed into voluntary administration in 2017.

“I’m not ready to discuss any new investments yet, but I’m sure there will be things to talk about in the not too distant future,” he said.

We’ll keep you posted.

Not so pumped

Much was made in the Federal Court on Thursday about the miscalculations of Tolga Kumova, the mining investor and multi-millionaire who is suing Alan Davison – the person behind the once-anonymous Twitter account Stock Swami – for a series of allegedly defamatory tweets.

Davison is defending himself over six tweets accusing Kumova of insider trading, unlawful conduct and the pumping and dumping of companies, including those in which he held a board seat.

Tolga Kumova leaving the Federal Court in Sydney with his legal team on Monday. Picture: Gaye Gerard.

Barrister Dauid Sibtain, representing Davison, appeared to draw blood during Thursday’s cross-examination of Kumova when the former rich-lister conceded that one of his own tweets, from September 2017, mistakenly inflated the value of a company’s mining deposit.

The minerals site, brimming with zinc, lead and silver, belonged to New Century Resources, where Kumova happened to be a substantial investor and director.

The admission put a wrinkle in Kumova’s attacks, because while he strongly denies Davison’s claims against him of market trickery, the 42-year-old was forced to concede that he’d lifted the value of the minerals in his tweet by a staggering $4.8bn.

Chalk that one up for Sibtain, or so it seemed at the time.

But by Friday there was some clawing back of lost ground when Patrick Walta, founder and managing director of New Century Resources, was brought forth as a fresh witness by Kumova’s silk, Sue Chrysanthou SC.

Walta had apparently read media reports of the fencing match between Sibtain and Kumova overnight and conducted his own calculations of the deposit’s value.

As it turns out, Kumova’s tweet was, well, still off the mark to some degree, but not by a sum comparable to the GDP of the Maldives or Montenegro, as Federal Court Justice Michael Lee observed.

Walta said that he examined the values of lead, silver and zinc at the time of Kumova’s tweet and put the value of New Century’s mineral deposit not at $12bn, as Kumova had published, but at $10.7bn – a difference of $1.3bn, instead of $4.8bn alleged a day earlier.

It’s still not a wholesale vindication of Kumova’s miscalculation, but neither is it the coup that Davison’s side probably hoped to dine out upon as evidence of market pumping.

Line ball, perhaps? The trial still has another week and a half to run.