Wealth creators to pass on the baton

Almost 30 per cent of Western Australia’s rich listers are octogenarians, highlighting an expected transfer of wealth from what has largely been a founding generation for many great businesses.

It is all part of an estimated $4.9 trillion that will change hands between generations across the country during the next decade, according to fund manager Vanguard.

Observers believe that handover in WA differs from the established wealth centres of the east coast because much of those passing it on in this state are the people who made it, and often still control it.

Analysis of the Business News Rich100, updated from 2024 with some revised wealth estimates and several new names, shows there are 28 people or families where the eldest living representative is 80 years or older, all born just before the baby boom that followed World War II.

Collectively this Rich100 cohort is worth $22.75 billion.

Of these Kerry Stokes is the richest, with more than $11 billion in estimated wealth, and one of three octogenarians that sit among WA’s top 10 wealthiest people.

Heiress Angela Bennett, with $7.57 billion, and property developer Michael Hodgson, at $3.5 billion, are also in the state’s top 10 richest.

Two of these three – Mr Stokes and Mr Hodgson – are founders.

All three have some significant form of wealth transfer that has taken place, according to public sources – notably Australian Securities and Investments Commission records.

While Mr Stokes remains firmly at the helm of key parts of his business empire, he has largely devolved power to his son, Ryan, when it comes to the biggest interest of the family, listed industrial company SGH.

Mrs Bennett, whose father Peter Wright was the business partner of iron ore magnate Lang Hancock, has substantially pared back her formal role in the family office AMB Holdings, with her sons, Todd and Paul, listed as directors.

She does remain the sole shareholder, though.

With the family embarking on a significant environmentally themed philanthropic drive and building a new sustainable headquarters in the family office heartland of Cottesloe, it appears the third generation is putting its stamp on decision making.

At industrial property-focused family company Richmond (WA), records show Mr Hodgson is no longer a director, despite being the biggest shareholder.

As previously reported, he stepped down from the board of that company in 2022, as well as several dozen other commercial entities, with his daughter, Leah Smith, stepping in as a director on the same date. 

The records and anecdotal evidence suggest 67 per cent of the $22.75 billion in this 80s or over cohort has significantly or largely been handed over to the next generation.

By contrast less than a handful have yet to make their succession clearly visible to interested observers.

Of the fortunes where the eldest family member is over 80, almost all have a surviving member of the generation that founded the business.

In several cases the acknowledged founder’s partner remains an asset holder, but their children have largely taken control.

In two cases, such scenarios exist where power has all but transferred to the third or fourth generation.

For instance, the Young family’s Major Holdings is run by third generation member, Grant.

His mother, Tania, stepped down from the board in the past year but records show she still owns a significant parcel of land in Dalkeith.

Fourth generation Paino siblings, Leeanda and Alexii, manage the wealth generated by the sale of food business Sealanes, while their mother, Elena, remains the sole shareholder.

The oldest representative of a family on the Rich100 is Maddeliene Caratti.

Born in the late 1920s, the matriarch of an agricultural and property empire founded with her husband, Mick, she has seen her two sons, Allen and John, part company.

A third generation is actively involved in each side of the divided empire.

The high number of founders in their 80s includes inventor-cum-property tycoon Ralph Sarich, who is worth $1.58 billion, prospector Mark Creasy ($880 million), property developer Tony Fini ($580 million), land developer Tony Lennon ($520 million), chemicals entrepreneur Gordon Martin ($515 million), arcade games genius Malcolm Steinberg ($500 million) and industrial land player Peter Coxon ($500 million).

Malcolm McCusker represents a unique proposition in this grouping.

Technically the second generation of the family fortune, Mr McCusker was in his mid-20s when he jointly founded Town & Country Building Society with his father, Sir James, in 1964.

A surprising few of these fortunes are mining based.

Aside from the Bennett and Creasy fortunes, there is Graeme Rowley’s $395 million estimated wealth, which represents his earnings from partnering with iron ore magnate Andrew Forrest in the early days of Fortescue.

Simon Lee, a new entrant to our list with an estimated wealth of $315 million, has also made the bulk of his money through mining.

He has been a Singapore resident of late but signalled his return to Perth last year when he announced his retirement as chair of Emerald Resources after 10 years.

But it is not just those born during the Great Depression or WW II who are being challenged by the clock.

“In the next 10 years or so, all the baby boomers with significant wealth will be facing their mortality like never before,” one adviser told Business News.

“That will change the profile of the rich lists.”

The adviser said a significant part of that transformation would be where the next generation, in many cases, took full control of the empire with the passing of the founders.

“They are no longer the son, they are the new patriarch,” the adviser said.

About half of the Rich100 are baby boomers born between 1946 and 1964, a cohort that has enjoyed the immense growth in WA without the disruption of war or depths of economic challenges faced by those from the 1920s and 1930s.

The baby boomer cohort of WA’s list is worth $93.28 billion, a number which is dominated by the fortune of just one person, Gina Rinehart, Australia’s richest person with a fortune estimated at just over $40 billion.

As any adviser in this space will attest, no two families’ circumstances are identical, and Mrs Rinehart’s fortune certainly defies other experiences.

Not only has she significantly grown her family’s wealth after a privileged upbringing ended with her shouldering a significant financial challenge, but she has also fought the demands of her children, with only one, Ginia, understood to have stayed out of the fight at the start. It is believed that another daughter, Hope Rinehart Welker, later shifted position to support her mother. 

Due to the original structure of the estate at the passing of Mrs Rinehart’s father, Lang Hancock, each of her four children, John Hancock, Bianca Rinehart, Hope Rinehart Welker and Ginia Rinehart, received a direct inheritance.

Today they are all billionaires, although none live in WA.

Outside the anomaly of the Rinehart fortune, the oldest Rich100 baby boomers are understandably skewed more towards control being in the hands of the founders.

About 60 per cent of the Rich100 boomers, Mrs Rinehart included, are in their 70s. They collectively hold $52.39 billion.

With a little more time of their side, they generally have the luxury of not necessarily having played their full hand yet.

For founders in this age bracket, their grandchildren are likely to be just emerging as an influence, if at all.

Business Women Australia founder Lyn Hawkins, who also advises wealthy families, said the younger generation typically had strong feelings about devoting energy and wealth to community causes.

Ms Hawkins said some descendants were questioning the source of resources-derived fortunes and seeking to put the money to different uses, including environmental causes.

“It is about providing an opportunity for that younger voice in navigating this … [including] funding things that are not just about making a profit,” she said.

One of the hardest obstacles to succession of any kind, including a generational change in thinking, is the founders’ belief in themselves, Ms Hawkins said.

“The reality is these guys are so sure of themselves because of their success, and their wealth is validation of their success,” she said.

Nevertheless, Ms Hawkins said many families understood that ‘elders’ had a lot of wisdom.

Equally, those elders were learning from younger generations.

She believes many of WA’s fortunes were generated by people who had survived upheaval due to war and economic shock, which made them realise wealth could be lost.

They instilled a work ethic in their children and valued education, she said.

“We don’t have any trust fund children [in WA] at all,” Ms Hawkins said.

“It is culturally the way we are.

“They want their kids to make something of themselves, so they are equipped to manage themselves separately.”

Of course, any adviser will highlight that rich families suffer the same challenges as any other, although the repercussions tend to be exacerbated by the sums involved.

Perhaps it is even more the case when the stubborn perseverance that has been a determining factor in an ageing founder’s success means they cannot let go.

Family dynamics, divorce or dementia are all factors that can be problematic, potentially disrupting succession plans, if any existed at all.

“What if dad lost the plot?” said a well-known former adviser to several of Perth’s leading families, who spoke on condition of anonymity.

“I have seen a few of those over the years.

“People move from being right on top of their affairs one day to not at all the next.”

The adviser said the founder’s partner may not have had any close involvement in the business or thought about what happens next in the event of such a dilemma.

“They don’t know what to do,” the adviser said.

“Sometimes they won’t hand over enough control, or they hand over too much.”