By Patrick Durkin
It seems appropriate that the first part of our interview with veteran fund manager Geoff Wilson takes place as he weaves through New York City on foot, looking for an Uber. Wilson remembers New York vividly, where he was sent as a 30-year-old broker from middle-class Melbourne, working in the city during the 1987 sharemarket crash. After rubbing shoulders with the corporate giants of the time – John Elliott, Larry Adler and Robert Holmes à Court – he found himself thrust into the Wolf of Wall St culture. “It’s all true,” he admits. “If the world’s a zoo, then New York’s the centre.” “I remember I arrived on the Friday and went into the office. Someone had ordered a dozen bottles of Moet. We were all drinking Moet. I thought, wow, this is extreme,” Wilson recalls.
Living it, and loving it
Wilson has been in New York catching up with billionaire hedge fund manager Bill Ackman, and is running late for our call after sharing a drink with a 71-year-old former broker, reminiscing about the old days. “We hit the ’30s but this was an hour and a half into it, I said, ‘Look, I’ve actually got to go’. I told him, I’ll be back in September. You know what it’s like, very few guys love it. He’s lived it.”
The 66-year-old Wilson is another who has lived it and loves it. While best known for his successful crusade to save franking credits during Labor’s failed 2019 election, within the industry he is known for picking undervalued stocks for Wilson Asset Management, the fund he founded in 1998. This year it will celebrate (roughly) 25 years, investing more than $5 billion for over 130,000 retail investors.
This year also marks the 10-year anniversary of Wilson’s other great legacy, the Future Generation companies, Australia’s first listed investment companies to provide both investments and social returns. Investors include billionaires Andrew “Twiggy” Forrest, Solomon Lew and the Smorgon family.
Through pro bono contributions of more than 30 leading fund managers, including co-founder David Paradice, the funds allocate 1 per cent of assets annually to charity.
They have donated more than $75 million to Australian charities with a focus on children, youth at risk and youth mental health. The $1 billion of funds under management are run by long-time UBS executive Caroline Gurney and are backed by leading fund managers, including Regal, L1, Sandon, Clime, Cooper, Bennelong and Tribeca.
Unique, sustainable charity model
At their joint AGM earlier this month, former Reserve Bank of Australia governor Philip Lowe took over as chairman of Future Generation Australia from former NSW premier Mike Baird, who remains on the board. It’s Lowe’s first board appointment since leaving the RBA last year after 43 years.
“I wanted my first role to be a pro bono one and this one always attracted me because it’s a great model where people get a great investment product and the money goes to kids, roughly $10 million a year across the two funds,” says Lowe.
“Bankers can have a bad name but I was really impressed there were all these people in the financial sector prepared to give their time, their energy and money, to help kids.”
Its sister company, Future General Global, is chaired by the former Business Council of Australia CEO and former chairwoman of Metal Health Australia, Jennifer Westacott, now chancellor of Western Sydney University and a Wesfarmers’ director. Labor has vowed to double philanthropy giving by 2030 and Westacott says this model should play a key role.
“Australia doesn’t have great models for philanthropy and this is a great model,” she says.
“To me, it’s a really unique model where you are using a traditional finance instrument but making one small adjustment, which is obviously the fund managers giving their fees pro bono, and freeing up all this capital to invest in mental health and prevention.
“The second thing which attracted me is the discipline of the investing side. There’s a very clear focus on prevention and organisations which need to scale up, then exit as they become self-sufficient, it’s a dynamic, start-up mentality.”
Those who know Wilson are not that surprised he has pulled off such an impressive, dream team working for the greater good. Speaking to the gregarious and plain-speaking Wilson, who the knockers label a shameless self-promoter, is always a thrill – fast, fun and exciting – with plenty of laughs and long stories, names and dates.
During the next instalment of our interview, Wilson is all abuzz about Twitter, now known as X, which he is trying for the first time, inspired by power user Ackman, who is leveraging his 1.2 million followers to raise a $US10 billion ($15.2 billion) fund for retail investors.
“It’s like learning a new market,” he enthuses. “My first week, they really put me through the mill, they set me up beautifully. ‘My grandfather can’t thank you enough for your work on the franking campaign’, they said. The guys in the office told me, they’re setting you up Geoff. Yeah, yeah, I don’t care, I don’t care,” Wilson unloads in his rapid-fire style.
Fifteen minutes later and mid-sentence, Wilson cuts things short. “Hang on, I’ll call you back, this brokers calling me.” You get the sense that Wilson always has half a mind on trading, in between telling stories. BOSS finds itself in the middle of this trade, which ends up in the pages of Street Talk just a few days later.
Wilson says he is buying 9.8 million shares in listed property fund Australian Unity Office Fund, paying $1.20 a share, a small discount to the traded price but about 30 per cent lower than the net tangible assets (NTA). They are trying to get me up to $1.23, Wilson tells us in live time.
Ron Walker’s London hotel inspired charity
“No, bugger him, he’s playing hardball. I’ve had more information, he’s had redemptions and he’s a forced seller, so I’m playing hard ball. It’s AOF, it’s a property trust that’s sort of in wind down. They have nine properties, they’ve sold six of them, they’ve three left, the NTA is $1.72. I think they’ll sell them in the next six to nine months. I’m saying, even if they sell them at say a 10 per cent discount, it will be close to $1.60,” he tells us, as if letting us in on the inside of a poker game.
It’s clear that Wilson has a head for deals. But he clearly loves people too, and fairly long, circuitous stories. So how did this unique Future Generation charity model come about, we ask? Strap yourself in.
“About 12 years ago, I was in the UK, I knew Ron Walker very well. When Ron and [Lloyd] Williams and Kerry Packer had Hudson Conway, I was at McIntosh in New York on the broking side and one of my clients ended up buying 10 per cent of Hudson Conway, which is how I got to know Ron. Anyway, when I went into fund management, Ron put in some money,” he says.
“Where was I going? Oh yeah, Future Gen. My wife’s English, so we would go to London every couple of years and stay in hotels and I asked Ron where did he stay? He used to stay at The Berkeley in Knightsbridge.
“It was always a little expensive for me but then they had a pay three nights, stay four deal, so we booked in. I went down to breakfast, it’s a beautiful hotel, I’m reading the FT, and I’m reading about this guy Tom Henderson, who was an ex-hedge fund manager, he is setting up a listed investment company that was going to manage money, called the battle against cancer investment trust, with fund managers managing the money for free to allow him to give 1 per cent of the assets to charity.”
And finally, the punchline. “I just thought to myself, what a fantastic model, I can do that back in Australia,” he says.
Forrest’s visit to Pope inspires second fund
Wilson spent the next couple of years talking to people about the idea. He had to raise at least $15 million to use a listed investment trust.
“I thought we probably need to use a shell of a company,” he says. “Do you remember the Australian Infrastructure Fund? During the GFC that got attacked by hedge funds and they ended up selling their assets to the Future Fund. When it was winding down, we bought a majority position in it and used it as the shell.”
He and his chief executive, Kate Thorley, hustled for months to raise the funds but in the end, were overwhelmed by the response. Solomon Lew, Forrest and the Smorgon family were among the founding investors who tipped in $10 million each.
“The prospectus aimed to raise $200 million. We thought we would be lucky to raise $20 million. It was open for six weeks. We had about $400 million of demand and we had to knock people back. The Myer family wanted to put money in but we ended up having to knock them back,” Wilson says.
Investors asked him to launch a global fund and he said no, given the effort involved. But Wilson says that a year later he was in London and caught up with Forrest’s people again. “I think Twiggy had been seeing the Pope or something. They said, ‘can you do a global one’ and I said, ‘yeah, I think we will’.”
It’s not a bad effort for a boy from humble beginnings who grew up as one of six kids in Melbourne’s Glen Iris.
Wilson’s father was a doctor and his mother a nurse, but Wilson says he never did well at school – he went to St Kevin’s College and La Trobe University to study science. “No, I didn’t do well at school. I failed HSC. I was better at maths, I failed English, English wasn’t my strong suit.”
In the early ’80s, Wilson got a job at the George Hotel in St Kilda. He was also offered to run his own pub by AFL club Richmond’s administrator, Graeme Richmond, but decided against it.
He ended up getting a job in funds management at an insurance company. While it gave him an entry into the financial services sector, Wilson’s boss told him that he might be a square peg in a round hole. Wilson realised the more enjoyable side was on the broking side. “All the big personalities were on the broking side,” he says.
Wilson also remembers attending a conference of brokers and fund managers and asked their views on the market.
“All of them didn’t really know,” he says. “They were all a lot older than me and I thought, ‘geez, there’s an opportunity for me here’. It just gave me reassurance no one really knows what the market is going to do.”
Wilson got a job at Potter Partners (later melded into UBS) where Charles Goode was the boss. He also worked for long-time broker turned director Rob Thomas, during a career which sent him to Sydney, London and then New York with McIntosh.
Wilson still reflects that he may well have ended up a publican, instead of a broker and well-known fund manager.
“Have you seen the movie Sliding Doors? I have made various decisions in my life, I’m not sure why, I think because someone, usually a parent, was asking me a question about whether it was the right thing to do,” he says.
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