(Jan 23): Michal Strnad’s wealth surged to US$37 billion, or roughly 10% of the Czech economy, after shares in the defence tycoon’s armaments company jumped in their trading debut.
The 33-year-old owner of Prague-based Czechoslovak Group AS about doubled his fortune overnight after the stock soared about 28% as of 9am in Amsterdam. The firm and its owner raised €3.3 billion in an initial public offering (IPO) priced at €25 a share. Strnad, who inherited the company after his father transferred ownership in 2018, has a net worth of US$36.9 billion, according to the Bloomberg Billionaires Index.
Czechoslovak Group, or CSG, has seen the biggest demand for weapons since the end of the Cold War after Russia sent troops to Ukraine almost four years ago. It’s one of the key suppliers of munitions and armoured vehicles to Ukraine and is seeking to take advantage of a rally in defence stocks in the wake of European concerns the US might withdraw its security umbrella. Global geopolitical instability, ranging from US demands over Greenland to the ouster of Venezuelan President Nicolas Maduro, is also stoking defence demand.
Michal Strnad cuts a cake during the IPO at Euronext Amsterdam on Jan 23.
Strnad plans to use funds he raised from the deal for his family office, which will invest in a portfolio of non-defence related companies to avoid a conflict of interest.
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“I have a team ready for that, we’re not starting from zero, but this will be a great injection for them,” he told Bloomberg News at the Amsterdam Stock Exchange on Friday. “We have a pipeline of dozens of opportunities that we are monitoring or working on.”
Strnad is the world’s richest defence tycoon, according the Bloomberg Billionaires Index. He also ranks as the world’s third-richest person under 40, behind Walmart Inc heir Lukas Walton, who is worth about US$49 billion, and Red Bull heir Mark Mateschitz, with US$38.4 billion. He surpassed Chen Tianshi, co-founder of Cambricon Technologies, a producer of artificial intelligence computing chips, worth US$23.4 billion.
Strnad stands out as a rare industrial billionaire in an era dominated by many technology and artificial intelligence fortunes. CSG started out trading Soviet military material under his father three decades ago. Michal was still in elementary school when he started learning the inner workings of his father’s company making armoured vehicles. By the age of 21, he was chief executive officer, and five years later its owner.
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Strnad expanded the company to manufacture small- and large-calibre ammunition, combat vehicles, as well as military and civilian trucks and other equipment, exporting its products to about 70 countries. It employs over 14,000 in Europe, the US and India.
“He has an exceptionally broad grasp of things,” said Slovakia’s Defence Minister Robert Kalinak, who has been working with the Strnad family since around 2008, when the family began investing in the country’s defence manufacturing sector. “I can’t recall a single time he said he needed to look something up, check something, or get back to it later.”
An early riser who usually gets up at 5am, Strnad is seen as a tough negotiator by people who have done deals with him. Knowing his business inside out, he travels frequently to meet clients, which often include government officials.
The billionaire established connections with other Czech tycoons as well. Last year he agreed to buy a stake in the operator of the top-tier Four Seasons Hotel in Prague from investment company PPF Group NV owned by fellow Czech billionaire Renata Kellnerova. He also joined the cohort of football teams owners buying a majority stake in football club FC Viktoria Plzen.
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