UBS eyes Australia’s richest family offices in latest wealth play
UBS has joined up its local wealth management arm to the Swiss bank’s global family office segment, formalising its pitch to Australia’s wealthiest people by offering them the same services it already provides to the world’s super-rich.
The Swiss bank is advancing the integration with former rival Credit Suisse. Family offices are a cornerstone of UBS’ assault on wealth management – a space it exited roughly 10 years ago.
Cashed-up Australians rely on global banks to deploy capital overseas, while the same clients could prove a vital source of fees for UBS’ investment bank or asset management arms if they need to do deals or succession plan.
UBS’ co-head of global wealth management, Jin Yee Young, said Australia was the second-biggest pool of investible assets in the region (ex-China) behind Singapore. Dominic Lorrimer
“We bank more than 50 per cent of family offices in Singapore, and we want to replicate that in Australia. We recognised there are a lot of underserved family offices here. They need global reach,” Jin Yee Young, UBS’ co-head of global wealth management for Asia-Pacific, told The Australian Financial Review.
“Typically [the investment bank and asset management businesses] are more institutionalised, and that will serve the ultra-high-net-worth segment better. These clients may have businesses that our investment bank can help.”
Global banks have targeted rich families, as they transfer capital onto future generations, who seek returns beyond local equities and property. HSBC relocated private bankers from Singapore to Australia last year, and Goldman Sachs’ local chief executive, Simon Rothery, dubbed Australia’s ultra-rich as its “biggest opportunity in private wealth in Asia”.
‘Call of duty’
Ms Young was in Sydney for the second time since she joined UBS last June from Deutsche Bank. She worked for the German lender for just six months, following a nearly 20-year career at Credit Suisse, where she was most recently its deputy head of wealth management for APAC.
She joined Deutsche just months before Credit Suisse was absorbed by UBS in a 3 billion Swiss franc ($5.2 billion) shotgun marriage last March. But Iqbal Khan, UBS’ global wealth management head, convinced her to join the Swiss lender to aid the integration of the two banks.
“Why did I come back? It was a call of duty. With the acquisition, they needed someone with knowledge of Credit Suisse,” the Singapore-based Ms Young said.
Long considered its crown jewel, Credit Suisse’s wealth management team was highly coveted by UBS immediately after the takeover. Special bonuses were dangled in front of private bankers, particularly those with deep ties to the richest people in the region, and importantly, the acquisition gave UBS a wealth management presence in Australia and India.
“A lot of people ask me if I get a culture shock … Joining UBS was like a homecoming, it is not that different in terms of culture ... The DNA of Swiss banking is inherently there.”
Despite the similarities, UBS has sought to distance itself from Credit Suisse’s blunders in risk management, by setting up a unit to offload Credit Suisse-originated loans that did not meet UBS’ risk protocols.
Credit Suisse’s strategy of leveraging its balance sheet to lend to wealthy individuals did not always end well. It lost its clients approximately $US3 billion from investments in Lex Greensill’s supply chain finance firm Greensill Capital, and booked a $US5.5 billion loss thanks to Bill Hwang’s collapsed hedge fund Archegos Capital Management in 2021.
Ms Young said UBS seldom made exceptions for potential clients which pushed the boundaries of the bank’s group-wide “risk appetite statement”. While that could see it turn away opportunities, it gave UBS’ existing clients greater comfort in the bank’s risk protocols.
Excluding China, Australia is UBS’ second-biggest market based on investible assets behind Singapore. It has migrated 34 financial advisers into its Sydney and Melbourne offices from Credit Suisse’s former wealth management arm. In total, the Swiss bank absorbed approximately 135 staff.
Credit Suisse’s Melbourne-based team will join UBS colleagues at the bank’s offices on 8 Exhibition Street next Monday. The Sydney-based team are still at Credit Suisse’s old offices in the Gateway building, but will move into UBS’ Chifley Tower offices at the end of this year.
“We now have the number one wealth management business in Australia. The target segment is very different. It used to be more high-net-worth, affluent spaces. Now, it is high-net-worth and ultra high-net-worth, which fits our global model,” Ms Young said.
Aaron Weinman is an investment banking correspondent at The Australian Financial Review. Connect with Aaron on Twitter. Email Aaron at aaron.weinman@afr.com
The country’s most secretive billionaires are about to get much richer Angela Bennett never wanted the family business. The daughter of prospector Peter Wright almost sold it all. Now it’s about to become a bonanza.
Some billionaires seek publicity, happy to discuss their strong-held political opinions or talk up charities. Others are more reticent but occasionally agree to mug for the cameras.
Perth’s Bennett family is not like that. Angela Bennett, 79, is the matriarch. Only two photos of her have ever been taken by the press – in one, she was attempting to hide. But the family – heirs to the fortune of Lang Hancock’s business partner Peter Wright – are on the precipice of the big time. More than 50 years after the pioneering mining entrepreneurs first identified the claim, the Bennett family is set to become the co-developers, with mining giant Rio Tinto, of a mega project in the Pilbara, the size of which dwarfs other major iron ore operations.
And at the same time, Rhodes Ridge is back on the cards – Rio is reviving a long-stalled agreement to jointly develop the mine – the family is shaking up the way it manages its vast wealth, estimated by the Financial ReviewRich List at $4.4 billion, as it prepares for its fortune to grow.
An investigation by AFR Weekend – including interviews with previous business associates, friends and former staff – lifts the veil on one of the country’s most secretive families. It reveals that the family has rearranged how it manages its money, ditching a highly successful investment office, leaving Bennett’s son Paul, 57, in the driving seat. And amid executive departures, the family is preparing to bankroll what could be one of the biggest iron ore mining projects in the world.
Bennett and her children declined requests for comment. Over the years, they have spoken publicly on only a handful of occasions. Until now, even the names of all seven of Bennett’s children have been unknown to all but a few. “The last thing we need is undue publicity,” Michael Wright, Bennett’s brother, once told Financial Review.
Rhodes Ridge, more than 1200 kilometres from Perth, is no ordinary iron ore mine. With an estimated 6.8 billion tonnes of high-grade ore, it could be the largest and richest undeveloped iron ore operation on earth. Planning work for the mine has been moving ahead swiftly since 2022, when Rio decided to proceed with the project. Environmental approvals were lodged last week.
Half of this mammoth project, which Rio hopes will catapult it back as the foremost iron ore miner in Australia, is owned by Peter Wright’s children – including Bennett, whom he adopted, through Wright Prospecting. Even without Rhodes Ridge, Wright Prospecting delivers the family hundreds of millions of dollars in royalties through other Pilbara tenements pegged in the 1960s. Unlike Hancock’s daughter Gina Rinehart, however, none of the three Wright children have ever developed a mine themselves.
Peter Wright and Lang Hancock were schoolmates who started working together in the 1930s. They were close, but in 1984, the businessmen attempted to formally split their assets in a bid to head off any conflicts between their descendants. It did not work. The two men once shared a lawyer and deals between them were often elastic, making them vulnerable to legal challenges. “Everything was on a handshake,” Michael Wright said in a 2011 interview.
One year after his deal with Hancock, at 77, Peter Wright died. It was sudden – he was in Bangkok while returning from a holiday in Europe. It left his daughter, Bennett, in shock. “She was Queen Elizabeth,” said one associate of the family, referring to the late British monarch finding out about her father’s death while in Kenya and immediately acceded to the throne.
Peter Wright was a miner at heart, but Bennett and Michael Wright were less enthused about Rhodes Ridge. Eight weeks after their father’s death, the two children sat down with Hancock to give him a mandate to sell off the development
Hancock appeared to believe it was worth $500 million, of which half would be his. It was a meeting, recorded by Michael Wright, that was full of unease. “What’s the risk, Lang, if we don’t develop them [the iron ore tenements], of the government taking them away from us?” Michael Wright asked.
Seven years later, Hancock was dead, and a deal was yet to be signed. The mine site, near Newman and surrounded by other mines in the middle of Western Australia’s red-earthed Pilbara region, remained with the family.
Many of Peter’s assets were sold off in a “fire sale”, as Michael Wright once put it, after his death. Angela appeared a reluctant heiress, and, according to Michael, she had no interest in being involved in the family business. Relations among Peter Wright’s children were not always amicable.
Bennett and Michael Wright had another brother, Julian Wright. His children sued the rest of the family over a financial separation agreement made between Michael Wright and their father. Then Julian Wright sued his siblings.
Among the lawsuits, all variously about how the wealth from the Rio royalties and the mooted development at Rhodes Ridge would be carved up, the most significant was against Hancock’s daughter, Rinehart. Rinehart wanted to hold on to the 25 per cent stake of Rhodes Ridge that her father had agreed was Peter Wright’s in the 1984 asset split agreement the men had signed. Bennett and the Wrights were ultimately successful in recovering their share of the project, but the lawsuit was draining, financially and emotionally, taking 12 years and only ending in 2010. Michael Wright, in an interview before his death at 74 in 2012, described it as “the most bitter thing” that had “stymied my family’s activities for over a decade”.
In that interview with the ABC, Michael Wright was forthright on many topics. Rinehart was “difficult”, BHP was “mercenary”, and his own mother and father were respectively “violent” and “manipulative”, he said.
But, amid all the litigation and her brother’s death, Bennett quietly folded herself back into the family business.
By the time the legal feud over Rhodes Ridge had ended, the Bennetts were already worth billions of dollars. Bennett’s son, Todd Bennett, was handed seed funding to start an investment house inside the family’s AMB Holdings vehicle.
He hired Joel Cann, a former JPMorgan asset manager who specialised in family offices and started AMB Capital Partners in Sydney.
While Todd Bennett had a background in finance, and Cann had worked in asset management for years, the Bennetts were not necessarily the people expected to be found in high finance. Bennett and her second husband Peter Bennett had splashed out on an elaborate compound in Perth’s exclusive Mosman Park and purchased a super yacht, Platinum. But the family saw themselves as “fundamentally farmers”, as Michael Wright put it. “I don’t think I have any yachts, I think they are a waste of money. I drive a Ford Falcon.
I like to think I’m a relatively ordinary individual,” he said.
Angela Bennett attends the launch of a biography of her grandfather, Canon McClemans, founder of Perth’s Christ Church Grammar School. Christ Church Grammar School website.
“They are very alternative guys, I have never seen them in suits,” one associate of Bennett’s sons Todd Bennett and Paul Bennett says, adding they were keen surfers and more likely to hang out with climate activists than other billionaires. “They are the most un-family office family office, they have no trapping, they are not trying to be spivvy,” the associate says.
And this has surprised many in the financial world. A business associate says one member of the family had said they were staying at one of their country properties. The associate figured it was an elaborate country manor. Instead, it was a portable shed used at mine sites. Another associate says that the family splits the cheque if they go out for a meal together.
But AMB Capital Partners worked. In now-removed promotional material, Todd Bennett was described as the “driver behind the family establishing a principal investment platform”. AMB Capital Partners attracted serious players, including former Macquarie banker Michael Ashforth, who ran resource deals for the big Perth families, former Future Fund managing director Mark Burgess, and former Transfield chief executive Roy McKelvie.
“They had a very professional team,” one veteran Sydney fund manager says.
Todd Bennett, centre, with Blue HQ Marinas Director Richard Williams, left, and Alex Kailis at Fremantle in 2015. AMB had invested in Blue HQ Marinas. Philip Gostelow
“Compared to family offices which sometimes hire people to make ad hoc investments, AMB went a different way, wanted to professionalise that investment from the start, and was set up like a [private equity] firm,” another person familiar with the firm says. “It had an investment committee and board, process and procedure, like working for Macquarie capital.”
AMB’s investment portfolio included stakes in medical centre operator Cornerstone Health, rental home provider Providence Housing, Blue HQ Marinas and Arrow Capital Partners, an international real estate firm.
It also owned 25 per cent of Sydney’s Coolabah Capital Investments. AMB has also been involved in the family office’s broader holdings, including a hugely successful investment in Quadrant Energy. Quadrant, also backed by Brookfield and Macquarie, made a major oil discovery off the Pilbara coast and sold to Santos for $US2.15 billion ($2.92 billion) in 2018.
Despite this success, the investment strategy has been the source of some family tension, people familiar with AMB say. That emerged as Paul Bennett became more involved in the family business after previously focusing on resources activities. A former mango farmer in Queensland, Paul Bennett wasn’t as across investment in the same way as his brother Todd Bennett, something that concerned some AMB executives.
“It was Todd’s interest and passion, it was not Paul’s calling,” one insider says. When Todd Bennett went to the United States before the COVID-19 pandemic, “Paul was happy to take the lead,” they add. “Paul wasn’t as investment-minded, he didn’t have the same qualifications, and that was a reason AMB [Capital Partners] stopped making new investments.”
Angela Bennett’s super yacht in Sydney last week. Dominic Lorrimer
Senior executives could see things were heading in a different direction and moved on. Several investments were liquidated.
Two people familiar with the family’s investment strategies say it became more focused on managed funds.
AMB Capital Partners was subsumed into the family office last year, and its corporate entity closed. The firm’s investment director, Chris McNeill, left. Executive exits on the whole were characterised as amicable during this time – many departing figures had no desire to live in Perth.
From the outside, it appeared an abrupt end to a well-performing investment firm. Rather than a family split, those close to the Bennetts say, Todd Bennett wanted to step back from a day-to-day role and would have agreed to put the business back into the family office. Paul Bennett, they say, wanted to centralise the family office back in Perth, not Sydney.
Angela Wright, second from right, and brother Michael, second from left, pictured in The Daily News.
“They had this cool PE business which was given a lot of freedom, it was inevitable at some point the family would want to integrate it back into head office,” a person who knows the family well says. Whatever was left in AMB Capital Partners is now part of the family office. Those close to the Bennetts say they are still investing, recently being given approval to build a $20 million office in Cottesloe, a favoured destination for Perth’s family offices.
Wright Prospecting, even without a new mine venture, is a dividends machine. In the past financial year, it deposited some $238 million into the accounts of the Bennett and Wright families. But if Rhodes Ridge gets off the ground, it will be transformational for their wealth.
For years, the Wrights and the Bennetts had been trying to convince Rio to come to the table over the mine’s development.
All sorts of arrangements have been offered up over the years, people familiar with the negotiations say, including splitting the mine in two – the Wrights’ and Rio’s – with each developing their respective side. But Rio was also keen to have a larger stake in the development, nervous about any conflict that could emerge from not having majority control. Rio Tinto declined to comment.
In the past few years, however, Rio has become more enamoured with the project – its higher-grade iron ore is sought after for its use in less carbon-intensive steel production. To get the deal over the line, Rio executives even camped out with the Wright family at the proposed mine site. While the finer details of the agreement are not public, much will depend on what port and rail facilities the eventual mine uses – and who pays for those. Rio has indicated it would charge the Wrights access fees. Analysts at Goldman Sachs have said as a result, Rio’s effective share in the ore that will eventually be mined at Rhodes Ridge will be between 60 to 70 per cent.
The deposit, 80 kilometres west of Newman, is, on current estimates, double the size of one of the next largest global deposits, Simandou in Guinea, which is set to cost Rio as much as $US6.2 billion to develop. The total cost of Rhodes Ridge is yet to be determined, although the existing port and rail infrastructure will alleviate the need for some spending. But exploration expenses are set at around $400 million, while one pre-feasibility study, announced late last year, costs $110 million alone.
Rio has a modest initial production target of 40 million tonnes a year, but suggests that could more than double over time. Its share of Simandou is expected to produce 27 million tonnes. By comparison, in 2022 the mines at Mt Newman were Australia’s largest, producing 67 million tonnes.
To keep up their side of the agreement, the Wrights and Bennetts will need to hold large amounts of cash. “[The money] needed to be risk-free – government bonds or bank deposits,” one person close to the negotiations says. (Michael Wright, in a letter tendered as evidence in one of the family’s many legal disputes, once accused Bennett of being “more concerned about the availability of cash, and no one has ‘spare cash’ these days”.)
With the focus turning to mining, Paul Bennett is now front and centre. He is the only member of the family on a series of corporate vehicles set up over the past two years to deal with the Rhodes Ridge royalties. Former Wesfarmers and Iluka Resources executive David McMahon, long a trusted advisor of Paul’s, is a director of key entities including AMB Holdings, the family office.
“The iron ore thing is driven by Paul, so it makes sense for him to be at the front of the queue,” one family associate says, adding that relations between the brothers have been mended and that active roles did not necessarily equate to any difference in equity among the siblings.
Exploration at Rhodes Ridge in 1971.
One interest shared by Paul Bennett and his brother Todd Bennett is the environment. When the Rhodes Ridge was announced last year, Wright Prospecting said they looked forward to developing the project “with a world-leading focus on climate, biodiversity and heritage”. Associates describe the brothers as “climate junkies” and the family office has recruited Jon Biesse as its chief investment officer. Biesse previously worked for Navitas founder Rod Jones and has experience in climate investing.
Squaring this interest with building an enormous open-cut mine will be a challenge. Haul trucks are the biggest users of diesel in Australia.
In rail operations alone Rio ploughs through 700,000 litres a day. Rio has also pushed back the wider electrification of its fleet in the Pilbara to the 2030s – possibly after the Rhodes Ridge project delivers its first ore.
After staff exited AMB Capital Partners, the family office is recruiting as it works toward the Rhodes Ridge project. Matt Rutter, who previously ran the Geraldton Fishermen’s Co-operative, is its new chief executive. Bennett’s other children – Grant, Peter, David, William and Rebecca – are less involved than Paul Bennett and Todd Bennett. A person close to the family said Rebecca, who converted to Islam upon marriage, has a more distant relationship with some of the family.
There is no doubt Bennett has been tough with her family in the past. In 2015, Grant Bennett had to declare himself bankrupt when she failed to bail him out after a failed deal.
When her brother Julian racked up a $30,000 debt, she said, “the only way [he] is going to learn is the hard way by paying back his debt completely on his own having to go without things”.
Now, however, it is her two sons running the business. Bennett remains the sole shareholder of the family office, but does not serve as a director. Instead, she supervises. “She is not hands-on with the day to day, but would get updates to what is happening,” one former staffer says. A 2003 operation to remove a brain tumour had affected her memory, Bennett once said. “I get all the tenements muddled up, actually,” she added.
Primrose Riordan covers private companies and family offices from the AFR's Sydney newsroom. Primrose was previously South China correspondent for the Financial Times and covered foreign affairs and federal politics in Canberra. Connect with Primrose on Facebook and Twitter. Email Primrose at primrose.riordan@afr.com
Feb 15, 2024|James Thomson
