Alisher Usmanov, the Russian billionaire who made a more than 10-fold return from his investment in Facebook Inc. (FB), said he recently spent about $100 million buying Apple Inc. (AAPL) shares in anticipation they will rise.
“I believe in the future of this company even after Steve Jobs,” Usmanov, 59, said in an interview at Bloomberg's Moscow offices, referring to Apple's late co-founder. “When the company lost $100 billion of its market value, it was a good time to buy its shares, as the capitalization should rebound.”
Apple's stock is almost 40 percent off its peak in September last year, partly reflecting investors' concern about slowing sales and profitability at the iPhone and iPad maker and intensifying competition with Samsung Electronics Co. Usmanov, the world's 35th wealthiest man with a fortune at $19.8 billion according to the Bloomberg Billionaires Index, also made money from investments in China's Alibaba.com Ltd. and Russian Internet company Mail.ru Group Ltd. (MAIL)
“Nothing is eternal,” Russia's richest man said in the April 25 interview. He didn't specify when he acquired the Apple shares. “But for the next three years I believe Apple is a very promising investment, especially given large dividend payments and buybacks.”
The DST Group of funds backed by Usmanov first bought Facebook shares in 2009, when the social-media network was valued at about $6.5 billion. DST sold a $1.7 billion stake during Facebook's initial public offering last May that valued the company at about $100 billion. The disposal earned Usmanov about $1.4 billion.
Facebook shares rose 0.5 percent to $27.12 at 10:02 a.m. in New York. They are still 29 percent lower than the Menlo Park, California-based company's IPO price. Apple, based in Cupertino, California, gained as much as 2 percent and traded 0.8 percent higher at $433.63.
“I still believe in the high technology sector and I am also absolutely confident in the future of Facebook,” he said.
Usmanov, who this year put all the assets he and two investment partners held under USM Holdings, a limited liability company based in the British Virgin Islands, also controls OAO Metalloinvest Holding Co. (METIN), Russia's largest iron-ore producer, and the country's second-largest wireless carrier, OAO Megafon (MFON).
“I see our investment portfolio as optimal for the time being in terms of the industries we invest in, so we are not planning to enter new sectors so far,” he said. “In the current situation, cash is king.”
Usmanov prefers to keep his funds as bank deposits, mainly in Russia, he said. Investments in sovereign bonds are also a good bet, he said. The billionaire and his companies weren't affected by the one-time levy on Cypriot bank deposits, Usmanov said, calling what happened in the Mediterranean country “clear expropriation.”
The billionaire said there are investment opportunities in Russia too, including in the technology industry.
“Russia is a country that created free economy and market in the last two decades, while the U.S. and Great Britain have it for centuries,” he said. Usmanov holds stakes in Russia's largest social network, VKontakte. He also tried to bid for shares in search engine Yandex NV in 2008.
The billionaire said he “respects” Berkshire Hathaway Inc. (BRK/A) Chairman Warren Buffett, whose business model appeals to him the most. Still, Usmanov says he doesn't see the need to join Buffett and Bill Gates' Giving Pledge initiative by committing to donate at least half of his fortune to charitable organizations and philanthropic causes.
Usmanov gave $247 million to charity in 2010 to 2012, a Bloomberg survey of the country's richest people showed.
“I always thought that one should do all that one can,” Usmanov said. “It may happen that I won't leave any heritage at all, but I would prefer to do everything I can to make this world better myself and right now, rather than someone else doing it after me as I don't know whether he will do it better than me.”