The chair of a $1.1 billion salary-packaging company keeps his home state front of mind.
John Prendiville may not have called Western Australia home for many years, but the experienced finance executive says his strong professional connections to the state remain.
In an interview with Business News during a recent visit to Perth, Mr Prendiville spoke of the events that led him to the east coast and a 30-year career in the financial sector.
Currently chair of one of Australia’s biggest salary packaging companies, Smartgroup Corporation, recently valued at $1.1 billion, Mr Prendiville left Perth to join the Royal Military College, Duntroon, when he was 17.
After graduating and serving a period with the Australian Defence Force, he left the Army to complete a Master of Business Administration at The University of Western Australia, with his studies funded by Bond Corporation.
What appeared a linear next step in his nascent career failed to eventuate, however, as Bond Corp’s financial woes became public.
“Having done the MBA and coming back, the Bond Corporation was teetering,” Mr Prendiville said.
“My obligation was to go back and join them.
“Their obligation was to fund me around the MBA, around the world, but we walked away with an amicable parting.”
As the door to opportunity with Bond Corporation closed, another opened with Macquarie Bank in Sydney, which Mr Prendiville joined in the 1990s.
It was here that he made his name in the fintech sector.
“I spent about 20 years there, the last 10 years as one of the global heads of the investment bank,” he said.
“We were expanding around the world at that time so there was a lot of travel for that second 10-year stint … around 15 different countries and 25 different offices that we developed or expanded around the world.
“That was a very exciting time. Hectic, but a lot of fun [and] a lot of energy.”
After about 20 years with Macquarie Bank, Mr Prendiville and his colleagues started their own investment house, Shift Financial, in 2011.
Shift Financial focuses on financing the small and medium-sized enterprise space in Australia, providing funds to private companies in a range of sectors.
“We would basically invest in or acquire assets that we liked – property or industrials or fintechs or development assets – whether that’s debt or equity,” Mr Prendiville said.
“We were hoping to use a lot of the skills we picked up at Macquarie during our period there and utilise those skills on behalf of the office.
“That’s been going on for about the past 14 years, and that’s been a remarkably successful process.”
In 2014, shortly after the launch of Shift Financial, former Smartgroup owner Ananda Krishnan contacted Mr Prendiville with an offer to join the company.
Mr Prendiville said he could see the potential for the business to grow across the country.
“This is when it [Smartgroup] was a much smaller company,” he said.
“[A] colleague I left Macquarie with did get involved. We went on the board, and we listed the company on the ASX. It was worth around $150 million at the time.
“They had a very customer-centric attitude about management, which was really good. We basically provided them with the scope to expand, and they did a range of acquisitions and organic growth throughout Australia.
“It’s worth about $1.1 billion now and I think it is the largest salary packaging and largest novated-leasing company in Australia.
“The last acquisition it did was probably six or seven years ago, so most of the growth now is through organic growth: new clients coming on, and clients who are previously salary packaged with a competitor transitioning to Smartgroup.”
Novated leasing is an agreement between an employee, an employer and a finance company over payments for a vehicle and associated running costs through the worker’s pre-tax salary.
Mr Prendiville became the chair of Smartgroup in early 2024.
Although based in Sydney, Mr Prendiville said WA was a major focus for Smartgroup.
“We have clients in WA who have been with us for 15 years, for example, and it’s because we take the complexity out of the game and make the engagement for the employee a really simple thing,” he said.
“We’re looking to grow [and] develop that business and push further. We’ve been here a long time, and we will be here for a much longer time.
“In terms of what we see as a market for development where we want to grow, [WA] is one of them. This is one of our key markets.
“We have 50,000 [customers] but we would love to have a lot more companies, corporates and employees that are salary packaging in WA and taking advantage of the opportunity that’s there.
“We are committing a large amount of money and capital on developing our assets with an intent to try and develop it here as quickly as we can.”
Federal and state government bodies including the departments of health, education, and defence are Smartgroup’s customers.
Mr Prendiville said awareness of salary packaging was growing, which was beneficial in the current environment.
“What that essentially means is that an employee can take home quite a bit of extra money than ... if they didn’t salary package,” he said.
“Salary packaging allows, under a federal government sanction, a process to pay for certain items on a pre-tax basis.
“Basically, it allows people to have more money in their take-home pay
“In a cost-of-living crisis like we’re in at the moment, if you’re capable of accessing this kind of product for your employees, you’d be mad not to.
“It gives them a bigger take-home pay than they would otherwise have.”
Mr Prendiville said Smartgroup expected the electric vehicles market to be a new avenue for growth.
Increasingly, he said, businesses wanted to offer their employees a novated lease option on an EV.
“Organisations recognise the benefits of employees driving EVs; it’s a really good position for them,” he said.
“That’s quite a sizable growth area.
“They’re the sort of areas where growth comes from, and it’s Australia wide.
“Western Australians are definitely taking this all on board and participating in this.
“We have 50,000 employees [on the books] here in WA. We have an office that’s going well here that we want to expand.
“[And] we have that dynamic where those employees are keen to be part of that process of carbon transition.”
Mr Prendiville’s ties to WA are further evidenced by his position on the board of University of Notre Dame Australia for the past 10 years.
Mr Prendiville sits on finance and investment committee of Notre Dame, which operates campuses in Fremantle, regional WA, and Sydney.
“I can only give credit to WA in terms of its quality of what it has produced. I mean, it’s one of the strongest states financially,” he said.
“It’s hard to say that there’s something vastly distinguishing between east coast and west coast, because to succeed anywhere in Australia, I think, these days you have to be really good.
“The testament to WA’s success is its finances, the state of its development, the condition of its assets, and the quality of the businesspeople living here.”
