Cindy McCain could reap payout from Bud deal
By Megan Davies
NEW YORK (Reuters) - Republican presidential candidate John McCain's wife, Cindy, could benefit from Anheuser-Busch Cos Inc's (BUD.N: Quote, Profile, Research) $52 billion takeover by Belgium-based InBev NV (INTB.BR: Quote, Profile, Research).
Cindy McCain, together with dependent children, earned $50,001-$100,000 in dividend income for 2007 from Anheuser-Busch shares, according to a Financial Disclosure Report filing on the Center for Responsive Politics' Web site.
Anheuser-Busch paid $1.25 dividend in 2007 per share, according to company filings.
That indicates that Cindy McCain, together with dependents, owned between 40,000 and 80,000 shares -- figures which were calculated by Reuters.
At the offer price of $70 a share, those shares would be worth $2.8 million to $5.6 million.
It was unclear how many shares Cindy McCain currently owns. An email to a spokesman for the McCain campaign was not immediately returned.
Earlier, U.S. Democratic presidential candidate Barack Obama said he was disappointed about the deal and that more should have been done to try to attract an American buyer.
(Additional reporting by Jeremy Pelofsky in Washington and Caren Bohan in Cincinnati; editing by Carol Bishopric)
Mutual Funds
McCain's wife controls family's riches
The candidate's spouse runs an investment portfolio of an estimated $36.6 million to $53.4 million and chairs one of the nation's largest beer distributorships.
Among presidential candidates, GOP Sen. John McCain has a particularly sophisticated financial adviser: his wife.
Much of what the public knows of Cindy McCain is from dirt-digging news reports: She is a recovering prescription-drug addict who has endured several miscarriages and a minor stroke. Less well-known is that she is chairwoman of Hensley, the nation's third-largest distributor of Anheuser-Busch (BUD, news, msgs) products. She also controls the McCain family portfolio, which is estimated at between $36.6 million and $53.4 million.
Sen. McCain reports his Navy pension of $57,000 as income but doesn't report any significant assets. Most of the family's wealth is tied up in Hensley, based in Arizona, as well as in accounts and trusts in the names of Cindy and the couple's children.
The family invests in a slew of mutual funds from JPMorgan Chase and American Funds. American is one of the largest and best families in the fund industry. JPMorgan's family is midsize and middling in performance, although some individual funds are outstanding.
But like the candidate himself, the McCain family is more distinguished for its valor than its investment prowess. The Arizona senator was the most famous POW in the Vietnam War, and both of his sons are in the service, one at the U.S. Naval Academy and the other a Marine private bound for Iraq.
In funds they trust
John McCain's 30-page filing for 2006 reports his income from his Navy pension, as well as $242,000 in miscellaneous income such as book royalties, all of it donated to charity. The candidate is the author of four books, and a fifth, "Hard Call," is due to be published in the fall. As a senator, McCain earned $165,200 last year.Among the charitable gifts was a $2,500 donation to the Imus Ranch, a camp for children with cancer run by radio shock-jock Don Imus, who was fired in April over an on-air racial, sexist remark. McCain had been a frequent guest on "Imus in the Morning."
McCain's checking account, with Wachovia Bank, had a balance between $15,001 and $50,000. Two joint accounts with his wife, at Wachovia and Chase, each contained $1,001 to $15,000.
Asset amounts are expressed in ranges on the disclosure form, but those for spouses and children stop at "over $1 million." Because all the investments were held in those names, and many fall into this category, the overall size is speculative. My estimate is based on published sources, including the Center for Responsive Politics, a nonpartisan, nonprofit research group, and on information from McCain's campaign.
Both Cindy McCain and her children reported an interest in trusts established by her father, James Hensley, of more than $1 million. One such trust includes a huge portfolio of municipal bonds, plus at least $1 million each in several mutual funds: Davis New York Venture (NYVTX) and three American Funds portfolios, EuroPacific Growth (AEPGX), Capital World Growth & Income (CWGIX) and New Perspective (ANWPX). All rank among the best in their categories.
Between $500,001 and $1 million was held in each of five mutual funds: Fundamental Investors (ANCFX), Growth Fund of America (AGTHX) and Small Cap World Fund (SMCWX) from American, as well as Lord Abbett Mid-Cap Value (LAVLX) and Lord Abbett Affiliated (LAFFX).
Lesser amounts were spread over more than a dozen JPMorgan funds, including International Equity Index (OEIAX) and Large Cap Value (OLVAX).
All of these except Affiliated and Morgan Large Cap Value are top-tier funds. The Morgan fund's performance has improved in recent years under new managers. Affiliated, once one of the most prominent in the fund world, has gotten steadily worse over the past decade.
A Bud man
Similar funds were owned by Cindy McCain's retirement plan with Hensley. Among her other assets were more than $1 million in Anheuser-Busch common stock. James Hensley founded his beer distributorship in 1955 and grew it into one of the largest private companies in Arizona. After his death in 2000, his daughter was named chairwoman.
Day-to-day operations of the company have been in the hands of Chief Executive Robert Delgado since 1994.
The McCain children also own a large portfolio of JPMorgan funds, as well as interests in limited-liability companies named Wild River and Wild Rapids. The former holds more than $1 million in cash and the latter more than $1 million in insurance policies.
Among the liabilities listed on the form is an American Express Black Card in the name of Cindy McCain and two Business Platinum cards for her children. The former has a credit limit of between $100,001 and $250,000. The limits on the latter are in the range of $15,001 to $50,000.
The composition of McCain's portfolio is common for the ultrarich, according to Private Banker magazine, which published a survey of such investors in February based on research by a consulting company called Celent.
The typical investor belongs to a category the article calls "mass affluent," with a net worth between $250,000 and $2 million. "These investors favor packaged products, such as mutual funds, pension-plan choices and insurance products," the article says.
The McCains fall into what the article calls ultrahigh-net-worth individuals. For them, "stocks and ownership in businesses and partnerships make up over half of their portfolios. Real estate, plus mutual funds and other packaged products, are of lesser importance."
Briefly a front-runner for the GOP nomination, McCain subsequently fell off dramatically and was deserted by some of his chief aides. But he remains in the race, and his competition does not include the kind of superstars that Sens. Hillary Clinton and Barack Obama have become on the Democratic side.
And a portfolio heady with Anheuser-Busch is a tasty thing to fall back on. In "The Bond King," my book about William H. Gross of Pimco, I relate that the money manager and his colleagues in the 1970s considered themselves connoisseurs of fine beer and held regular blind tastings.
"The winner," Gross told me, "was always Budweiser."
At the time of publication, Tim Middleton didn't own any securities mentioned in this article.
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