Finance
Catering to the ultra-wealthy is a booming business in Australia
(Bloomberg Markets) — Peppermint Grove, a suburb of Perth in Western Australia, has everything you’d expect from one of the country’s wealthiest zip codes: sprawling riverfront mansions, exclusive schools and a yacht club.
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But lately there has been a new sign that Perth’s elite is starting to cross the line between the merely wealthy and the fabulously wealthy. Take a look in the window of any real estate agent and you will often see properties advertised with the telltale phrase: “Perfect for a family office.”
Financial centers such as Dubai, London, New York and Singapore have long dominated the rarefied world of family offices – outfits that typically focus on a single client worth more than $100 million with services such as money management, taxes, charitable donations and even domestic help . .
Since 2019, as the rich get richer, the number of family offices worldwide has more than tripled, to nearly 4,600 last year, according to investment data provider Preqin Ltd.
But the rich don’t just live in global glamor cities. Family offices are now popping up in places like Perth, on the Indian Ocean coast, 2,100 kilometers from Adelaide, the nearest metropolitan area, and closer to Jakarta than Sydney.
After an almost twenty-year mining boom, Perth, with a population of more than 2 million, has 64 centimillionaires. That puts it among the richest cities in the world by that measure, tied with Stockholm and ahead of Berlin and Dublin, according to data from citizenship consultancy Henley & Partners.
Andrew Forrest and his family top the list of the richest Australians, with a fortune of $29.2 billion as of mid-May, according to the Bloomberg Billionaires Index. He grew up in the outback and founded the iron ore mine Fortescue Ltd. on, based in Perth.
Andrew and Nicola Forrest call their family office Tattarang; it invests in public and private companies and partners with their philanthropic Minderoo Foundation. (In 2023, the couple announced their divorce but said there would be no impact on their shared ventures.) Tattarang’s “tailor-made model” helps founders fund “strong and sustainable businesses in sectors where we think that we will have the greatest impact – for example, renewable energy, critical minerals, agri-food and health technology,” says a spokesperson.
Other wealthy families are less well known and have made their mark selling instruments to miners and other companies that have benefited as the size of the mining sector has more than doubled since 2000 to 13% of Australia’s gross domestic product.
Shaun Parkin, who helps families set up and manage their offices, says he works, or has met, with more than 20 of these companies, each overseeing more than A$200 million ($131 million) in assets. “Many of those I meet had no idea such a level of prosperity existed,” says Parkin, co-founder of local consulting firm Hall Road Services. “And I would say most people haven’t either.”
Family offices have some universal appeal. They typically have minimal disclosure requirements and allow the wealthy to exercise strict control. But in Perth there is an additional impetus: many locals have a deep-seated skepticism of outsiders. This certainly includes representatives of large global asset managers who want to manage their money from far away.
Take Perth-based Rod Jones, founder of education company Navitas Ltd. In 2019, a group led by private equity firm BGH bought Navitas for A$2.1 billion, so it was no secret that Jones might need asset management. But he became so irritated by countless calls from distant professionals offering opportunities or wanting to handle his money that he reached the point where he said to someone, only half-jokingly, “Look, I’ll give you $200,000 to go away.” .”
Instead, Jones founded a five-employee family office, Hoperidge Capital. It invests in a number of top shares, but focuses mainly on direct investments, including private credit.
“I’m just someone who enjoys the power of business and who puts time and effort into choosing good opportunities and supporting them,” he says. Cookie-cutter pitches are of little importance. “In order to invest with someone, I need to meet you, I need to understand you, I need to know you, I need to feel comfortable with you.”
Other family offices in Western Australia share this desire for fame. Many are within walking distance of each other in what is known as the Golden Triangle, an exclusive group of suburbs between the Swan River and the coast.
Emilio Pagano, CEO of Lance East Office, says he regularly talks to more than a dozen of his colleagues about long-term investments that appeal to their clients’ entrepreneurial spirit. Lance East manages the money and philanthropy of Laurence Escalante, founder of VGW Holdings Ltd., a rigorous online gambling company, which has a personal fortune of about $2 billion, according to the Bloomberg Billionaires Index.
Family Offices clients are often comfortable with risk because of Western Australia’s mining heritage, Pagano said. “Think about how mining will proceed,” he says. “You set out in the middle of nowhere, starting from the most remote capital in the world. And from there you drive 3, 4, 500 kilometers, and you start looking in the desert for mining assets and digging.”
Family office clients are often comfortable with risk due to Western Australia’s mining heritage
Despite all the possibilities, a remote location poses a challenge: where do you find the staff with the knowledge to compete or negotiate with the major financial players? Perth has just 13,000 full-time managers or financial services professionals, compared to 108,000 in Sydney, census figures show.
Family offices are usually led by a CEO or Chief Investment Officer and as many as ten staff members. Insiders say the top job typically goes to someone who has worked in the founder’s business and is already a trusted advisor.
CEOs typically take home salaries of A$396,001 to A$500,000, with an additional annual bonus of 21% to 30%, according to a report by consultancy KPMG and family office recruitment firm Agreus Group. That is more than their counterparts in Europe, but less than in the US. (The report does not detail salaries in Perth, but industry executives say they are broadly comparable.)
Parkin, the family office consultant, says recruitment in Perth needs to be “a little more imaginative”. He often searches LinkedIn profiles for people who grew up or attended college there and might be willing to move back. He knows the transition well: he worked in finance in London, had a senior job at State Street Global Advisors in Sydney and moved back to his wife’s hometown of Perth to be close to family. The more relaxed lifestyle is another draw. In Perth, days often start and end early, and some of the best beaches in the world are just a short drive away.
But there is also another angle on the field. Family offices work directly with billionaires and centimillionaires, giving advisors a greater say in decisions. “You probably wouldn’t get access if you were part of a larger company,” says Parkin.
The industry is now looking to the next generation. Today’s mining magnates will one day pass on their businesses or wealth to their children. In a booming economy, opportunities in the construction and service industries could create the next round of family office clients.
Tayyab Mohamed, co-founder of Agreus, says the market could become much bigger: “I wouldn’t be surprised if Perth becomes a vibrant ecosystem in a few years.” —With Ben Stupples in London
Brumpton is a Bloomberg News reporter in Sydney; Hunt, in Melbourne; and Winters, in Singapore.
(Adds context about Forrests in paragraph 8. An earlier version corrected the spelling of a company name in paragraph 12.)
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