The name Glenn Wheeler will ring a bell for those who have been around Perth’s business scene a while.
The name Glenn Wheeler will ring a bell for those who have been around Perth’s business scene a while.
For some, the name Wheeler is linked to the days of Western Australia’s entrepreneurial past, most notably the collapse of Permanent Building Society in early 1990s.
However, Mr Wheeler sees himself as an innovator who has simply been tripped up by red tape.
Whatever the case, it has been a long time since Mr Wheeler really hit the headlines. For the past few years he has been quietly building a new business, listed property management company Wentworth Mutual, which has emerged from what he said was the shell of a dot.com business pursuit that didn’t work.
The consummate salesman has quietly emerged at the head of one of Australia’s biggest residential property managers – and is predicting big things for the sector.
Mr Wheeler is group managing director of Wentworth, which has enlisted the support of interests associated with east coast heavyweight Richard Pratt and is now seeking $12.5 million through a placement and a share purchase plan.
After 11 acquisitions in the property management business, during the past two years Wentworth has grown from managing 140 properties to 2,400 properties, making it the largest residential property manager in WA and one of the largest in Australia.
In an indication that sentiment towards Mr Wheeler may have shifted since his Permanent days, Pratt-controlled Thorney Holdings, holds a 9 per cent share in Wentworth, and is expected to take part in the placement.
Wentworth has run at a loss for the past three years – $1.6 million in 2002, $2.7 million in 2003, and $800,000 in 2004 – and Mr Wheeler said the company was not expecting to make a profit this year either.
“We have been focusing on getting the size of the business up, getting more staff and opening new offices,” Mr Wheeler told WA Business News.
He said the capital raising Wentworth was about to undergo was aimed at doubling the size of the company and enabling a move into the Sydney and Melbourne markets.
Mr Wheeler said that, in exchange for the management of their properties, Wentworth’s clients were given shares and did not have to take on any financial risk.
“We have a situation where the owner can’t lose, they don’t give us any money,” he said.
“It takes a lot of time, money and effort and you need to be reasonably innovative to think of things like this, where the customer gets value and a benefit and everything is fully disclosed in a prospectus.”
With a presence on the Perth business scene that extends well back to the 1980s, during which time he was a central figure in financial planning, real estate, mortgage broking and tax-effective investment, Mr Wheeler believes the Wentworth strategy is a logical step for him.
Hopefully, for investors, he will have more success than his previous high-profile ventures, some of which have brought financial disaster and dragged him through the courts.
Mr Wheeler points out that he was never found guilty of the charge sbrought against him for raising money without issuing a prospectus in relation to his time at investment advisory firm Wheeler Grace & Pierucci, or receiving money as an officer of Permanent.
In the first case the charge was dismissed, in the second he was found not guilty.
Mr Wheeler did lose a civil action taken by Permanent liquidator Tony Woodings over his and his fellow directors’ actions prior to the collapse of the building society.
Mr Wheeler defends this track record.
“At the height of the WA Inc era they closed the building society. The reason it got closed was over a technicality over a management agreement,” he said. “You’ll find that, of all the people who had their money with the building society, somewhere around 90 per cent was recovered, at a time where they were selling off assets at the depths of a recession at fire sale prices.”
After being legally bankrupt from February 1993 to March 1996, Mr Wheeler re-emerged promoting a tax-effective property management franchise scheme through the Madison Pacific residential property manage-ment plan, which was taken to court by the then Australian Securities Commi-ssion, in relation to prospectus rules.
It is understood that Madison Pacific, in part, relied on selling investors randomly allocated addresses in Sydney.
Ultimately, the Full Federal Court held the prospectus rules didn’t apply, but by that stage a $90 million raising had been effectively stalled.
“That was the era when they introduced tax rulings, and we were selling it as a franchise and ASC came along and said it was a prescribed interest and that we needed a prospectus,” Mr Wheeler said.
“We were legally and technically correct, but ASC stopped us, and by the time it got resolved it was too late to continue – ASC killed off the growth prospects of that business and were then found to be incorrect.
“By the time it got resolved it was not worth pursuing.”
Mr Wheeler said that: “Along the way I have come up against a little bit of red tape in a couple of situations, and found never to have done anything wrong. When you are growing really fast and breaking new ground in an industry, sometimes you will get a bureaucrat who thinks you are going too fast.”
Mr Wheeler was also involved in Sales Pursuit, a conference and motivational speaking company, which listed in 2000.
Sales Pursuit attempted a merger with Vision Publishing, run by Brad Cooper, who is notoriously linked to HIH director Rodney Adler and the insurer’s collapse.
The deal soured and Messrs Wheeler and Cooper ended up in the Supreme Court of Western Australia.
Sales Pursuit changed its name to Aztec Capital in 2001 and further pursued business in the property management sector.
In May 2002, it purchased Wentworth Management Pty Ltd, a property management company which had a Peter Wheeler on its board. Later that year, Aztec changed its name to Wentworth Mutual.
The financial track record of this entity, in all these guises, appears poor, with reported losses in every year since listing.
Wentworth Mutual officially changed its strategic direction in 2003 to become a property management business, with the lofty aim to become Australia’s most significant residential property management business.
Earlier this year, Wentworth appointed well-known property management specialist Tony Warren as managing director of the property management division.
Confident of reaching profitability next year, Mr Wheeler said the strategy was based around the fact that real estate agencies tend to not split out the sales and management parts of their businesses, but would rather focus on sales.
“Banks and real estate agents are making a lot of money out of property management, and we are carving out the management businesses from local real estate agents in the same way that mortgage brokers took business away from the banks,” he said.
