Managing wealth, reducing risk

Diversification has become the abiding principle of asset protection among Western Australia’s wealthiest people.

Simply put, once you have made it, don’t bet enough to lose it.

That is why the state’s most prosperous families are increasingly likely to establish a family office to separate, where possible, their riches from operational risk.

In many cases, professional help is brought in to manage the day to day, often including investment advisers who operate like fund managers, mainly spreading the family’s fortune across a portfolio of assets.

In this way, the investments of many of the state’s richest people are opaque to most outside observers.

Occasionally, however, either by design or further good fortune, a rich lister ends up as a major shareholder in a company with a significant market capitalisation.

Business News has found 16 Rich 100 members whose fortune has a significant stake in an ASX-listed company, with a handful of these reliant on a single share price as the key metric for their net worth.

The most obvious cases are where the stake is in the business that they founded or otherwise invested a substantial sum at a critical juncture in the company’s history. This represents the origins of their wealth and the rump of their fortune.

An example is Nicola and Andrew Forrest’s stake in iron ore giant Fortescue via their family office, Tattarang, or other beneficial interests.

According to Business News’s calculations, the state’s second- and third-richest people, respectively, held Fortescue shares worth $9.3 billion and $8.3 billion as the share price hovered at $20 each in mid-August.

The difference in these numbers is the 50 million additional shares held by Mrs Forrest’s independent family office, Coaxial Ventures, established when the pair split in 2023.

These shares represent the single biggest element of their fortunes, with Mrs Forrest worth an estimated $18 billion in mid-August, while Mr Forrest was a tick above $16 billion (although the dividends of past years have increasingly allowed the family to diversify into other assets).

This reflects the Forrests’ use of dividends from Fortescue to diversify out of the listed entity. Half their wealth is now stored outside of the iron ore miner, a percentage dependent on the commodity price and market sentiment.

Another example is Kerry Stokes, whose holdings in diversified industrial company SGH have doubled in value in the past two years to a staggering $10.2 billion, by far the bulk of his estimated $12.3 billion net worth.

Others in this camp who will feature in our forthcoming Rich 100 special publication later this year are Chris Ellison, who is back into billionaire territory in the wake of his Mineral Resources recovery, and Luke Mader, whose eponymous listed mining contractor has delivered him an $800 million fortune.

Similarly, Tony Lennon remains the biggest shareholder in Peet with a holding that represents about quarter of his $625 million fortune, largely made from his management of the listed land developer.

Further down the list is another listed mining services player, GenusPlus, which has lifted founder David Riches from last in the 2024 list to a third quartile position of around $370 million.

Meanwhile, about two thirds of Bill Beament’s known $360 million pile is held in shares in Develop Global, which he heads.

In the same vicinity is Tim Goyder, whose wealth is linked most noticeably to lithium play Liontown Resources, as well as precious and base metals company Chalice Mining.

A most recent entry at a little over $500 million is Sunny Narula, who is an executive with Sigma Healthcare through his role in Chemist Warehouse, where he has been described as WA state manager.

The late Barry Patterson, a founder of mining services businesses Eltin and GR Engineering, was a major backer of Sonic Healthcare in 1992 when his son-in-law Michael Boyd took control of the company.

The Patterson family holds almost $80 million in shares in Sonic and its spin-out Silex Systems. The Boyds hold about $345 million across the two companies.

This clutch of fortunes shows how rarely the stock market is a place for a store of wealth, albeit quite a few others are in the Rich 100 as result of past success from listing on the ASX.

Among these are Tim and Denby Roberts, who owe the basis of their fortunes to construction company Multiplex, which was founded by their father John Roberts, listed in 2003 and then taken over in 2007.

Others whose companies joined the ASX in the past are: Rod Jones, Mutual); Clough family (engineering firm Clough); Helen Sewell (financial services company Great Southern); and the Sayers family (Ausdrill).

In a few cases, such as Rod Jones and Navitas, some of those interests are retained even though the company is no longer listed. But mostly the founder has cashed out and their wealth is invested across a spread of different investments. who listed education company Navitas; Tony Poli and Charlie Bass with Aquilia Resources; Kerry Harmanis, who had Jubilee Mines; Megan Wynne (APM Human Services International); Jim Litis and John Bond (Primewest); Brett Fogarty (GRD); Graeme Rowley (Fortescue); Rubino family (United Group and Monadelphous); Dick Lester (property trust manager Growth Equities

And then there are those Rich 100 members who have taken a stake in an existing company or one founded by someone else, which has driven further wealth creation.

The fortune of Malcolm McCusker and his family was made through land development and the early 1990s sale of Town & Country Building Society, which he founded with his father, Sir James McCusker. 

The McCusker stake in Commonwealth Bank is worth about $240 million, while the family just sold $96 million worth of Qoria shares.

Venture capitalist Craig Burton (see story page 22) believes in backing the right people. He certainly did so with Luke Mader and now has a stake worth about $320 million in Mader Group.

Alan Tribe made his fortune through Ikea retail store franchises and the land beneath them. Since 2017, he has spent about $125 million acquiring shares in biotechnology play PYC Therapeutics, which are now worth about $225 million.

The car business is in the blood of the Wheatley family even if they no longer directly sell motor vehicles. 

They dominated the register of listed Automotive Holdings Group and, when that was bought by another listed player in the same business (Eagers Automotive), the family ended up with a major stake currently worth about $215 million.

And then there is prospector Mark Creasy, who has made an artform of leveraging major mineral finds into hefty share stakes.

Mr Creasy has a big portfolio listed shares as a result, but nickel and lithium company IGO is his biggest, worth $270 million.