Carlos Slim Swimming Against the Tide

Carlos Slim Hel was born on January 28, 1940. He is a Mexican business magnate and philanthropist who is currently ranked as the richest person in the world in 2012. Slim has been ranked the richest person in the world since 2010. His extensive holdings in a considerable number of Mexican companies through his conglomerate, Grupo Carso, SA de CV, have amassed interests in the fields of communications, technology, retailing, and finance. Presently he is the chairman and chief executive of telecommunications companies Telmex and Amrica Mvil. Carlos Slim was born in Mexico City, Mexico in 1940 to Maronite Christian parents Julin Slim Haddad and Linda Hel, both of Lebanese descent. His father, born as Khalil Slim Haddad, immigrated to Mexico at the age of 14 in 1902 and changed his first name to Julin. As it was not uncommon for Lebanese children to be sent abroad before they reached the age of 15 to avoid being conscripted into the Ottoman army, four of Haddad's older brothers were already living in Mexico at the time of his arrival. Carlos Slim's mother, Linda Hel, was born in Parral, Chihuahua, of Lebanese parents who had immigrated to Mexico in the late 19th century. Her parents upon immigrating to Mexico had founded one of the first Arabic language magazines for the Lebanese-Mexican community, using a printing press they had brought with them. In 1911, Julin established a dry goods store, La Estrella del Oriente (The Star of the Orient). By 1921, he had purchased real estate in the flourishing commercial district of Mexico City. These enterprises became the source of considerable wealth. In August 1926, Julin Slim and Linda Hel married. They had six children: Nour, Alma, Julin, Jos, Carlos and Linda. Julin senior, who had been influential in the Lebanese-Mexican business community, died in 1953. In 1982, as Mexico lurched towards a financial crisis so brutal it triggered the Latin American debt crisis, Mexican and international investors desperately wanted to exit from Mexico, except for one: Carlos Slim. That was the year Mr Slim, now the richest man in the world but then the little-known 42-yearold son of Lebanese immigrants, set out on a shopping spree to buy Mexican companies at firesale prices across industries as diverse as aluminum, tobacco, insurance and rubber. This week he was at it again, only this time his arena was debt-plagued Europe going through Euro crises. Mr Slims Amrica Mvil, the largest telecoms operator in Latin America,

announced that it intended to bump up its 4.8 per cent stake in KPN, the ailing Dutch telecoms outfit, to as much as 28 per cent in a 3.2bn deal. Eduardo Garcia, founder of the business website Sentido Comn, says that buying struggling companies in hard times defines Mr Slims business style. Nobody is betting on Europe but Slim views things in a different manner he says. He can often see what the future holds. He gets in when every body is running. Ignacio Cobo, a business partner and Mr Slims closest friend, told the Financial Times this week: Carlos sees three dimensions when everyone else just sees two. It is not clear whether Mr Slims first significant investment outside the Americas will pay off. The 72-year-old has tried to break into Europe before, in particular in 2007 when an attack on Telecom Italia was beaten off. But his value-investing approach has to date earned him a $69bn fortune, according to Forbes. That approach drew him into the now-booming Brazilian telecoms market in 2002, when fears of a socialist government under then newly elected Luiz Incio Lula da Silva were crushing prices in Brazil. No investor wanted to enter Brazil because of Lula strong views against USA. It also led him into Argentina when it was still in disarray after financial collapse in 2001. Now a similarly distressed situation has led him to the eurozone: shares in KPN, which has operations in Germany, Belgium and Spain, had fallen 30 per cent this year before Mr Slim made his move. Mr Slim is meticulous in seeking out the bargains he loves. Trained as a civil engineer, and having taught algebra and linear programming while studying, he can read a balance sheet like most people read the sports pages. Every day, he receives one piece of paper packed in miniature font with the latest figures of the 200-odd companies that comprise his business empire. He would always say to me that numbers speak to him, says Mr Cobo. That probably explains Mr Slims love of baseball though he rarely watches a game, preferring to keep up by reading financial figures in bulk. For all his wealth, Mr Slim cultivates an image of disarming understatement. At a 2007 state dinner with George W. Bush, one guest was startled to see him sitting on the scruffy seat of a bus hired for the event. He could have arrived with great fanfare, recalls the guest. But there he was, just waiting patiently and not a bodyguard in sight. Miguel Alemn Velasco, a friend of Mr Slim for the past 40 years, recalls imploring the billionaire in the early 1990s to upgrade to a bullet-proofed Mercedes-Benz. Mexico was getting more dangerous but Carlos just didnt see the need, he recalls. He was happy with his Chevy. While his living style is simple and is clearly convenient in a society with yawning inequalities, friends insist it is not just a show. He just likes simple things, says an acquaintance. Before he had open-heart surgery in 1997, he would often slip away from formal dinners for a hot dog from a street vendor. Today, when at home, he takes off his shoes and socks and walks around the house barefoot.

A widower since Soumaya, his wife, died in 1999, he surrounds himself with his six children. The family meets twice a week to eat. His grandchildren often drop by after school. He has kept his parents home as it was when they were alive and has a 1941 bottle-green Cadillac like the one his father owned. I never drive it, he told the Financial Times. But I often open the door, get behind the wheel and sit there thinking about life, and about my father. Introduced to entrepreneurship by his father, who founded The Orient Star general store, he showed immediate flair: according to relations, he used get-togethers to sell sweets and cigarettes. He went from strength to strength. But what catapulted him into the mega-rich league was the 1982 purchase of Cigatam, a tobacco company that generated a huge free cash flow. That enabled him to fund future acquisitions and, in 1991, to buy Telefonos de Mexico, the state telecoms monopoly. Critics say he has used Telmexs dominant position to keep prices artificially high and to stifle competition, charges he denies. They also point out that Mr Slim built his fortune in a country where about half the population lives below the poverty line. The competition authorities recently fined him almost $1bn for the alleged monopolistic practices of Amrica Mvil. The heart of the dispute was the interconnection charge it imposed on other operators. But last week, in return for concessions, the regulator dropped the fine. There is no doubt the cash Telmex generated at home gave markets confidence to fund his expansion abroad, including a 16 per cent stake in Saks, the department store, and a 7.3 per cent stake in the New York Times. Today his telecoms empire has 246m mobile subscribers across the Americas. It is possible that Mr Slim sees Europe and his KPN deal, in additional to its financial merits, as a way to learn how best to exploit Latin Americas booming telecoms markets as they mature. Asked in the 2007 interview about his accumulation of colossal wealth, Mr Slim insisted he remained down to earth. Regardless of whether I am first or one thousandth [richest in the world], I am not going to take anything with me to the grave. That may be but he is still accumulating capital at a tremendous speed.