Crypto, online gambling and other tech has created a new generation of ultra-wealthy Australians
Social media, cryptocurrency, online gambling, sweepstakes businesses, currency trading and software start-ups have helped create a new generation of ultra-wealthy Australians.
To consider how the accumulation of wealth in Australia is changing rapidly, look at brash young 35-year-old billionaire Adrian Portelli. Just six years ago, Portelli was nowhere to be found on The Australian’s annual examination of the rich elite: our edition of The List – Australia’s Richest 250.
Portelli is the owner of a promotions business called LMCT+ and is best known for his publicity stunts and love of fast cars, which came together that famous time in May last year when he had his $2m McLaren Senna GTR hoisted by crane into his $39m penthouse apartment on the 57th floor of a Melbourne high-rise.
Behind all that, Portelli is driven by data and spreadsheets and in reality is a bit of a tech nerd – albeit with tattoos, those fast cars and a growing collection of trophy assets such as a new corporate jet he took delivery of in March.
And an extremely profitable business.
This article is from The 2024 Barron’s Top 150 Financial Advisers magazine which is published in The Australian on November 21.
Portelli’s LMCT+ is booming, with far more than 100,000 subscribers paying between $19.99 and $99.99 a month for the chance to win cars, boats, cash and other giveaways, and also to use their memberships on discounts at hundreds of retail partners.
Along with Portelli’s other assets, it adds up to an estimated fortune of $1.3bn, enough for him to join the ranks of the Richest 250 for the first time earlier this year.
Portelli also illustrates how the members of The List are getting younger this year. There are now 20 people among the Richest 250 aged 40 and under, proof that being online, using social media and working hard can make you wealthier at a faster pace than any time in Australia’s history. Social media, cryptocurrency, online gambling and sweepstakes businesses, currency trading and software start-ups, graphic design companies that go viral – and global – quicker than at any time in history. They are all trends that have markedly changed the face of Australian wealth in recent years.
Six editions ago, when I published our first Richest 250 list for The Australian, there were only 11 people on it aged 40 and under. That edition was released in March 2019; it was only a few months earlier in 2018 when Portelli started LMCT+.
But he came up with a clever business plan – basically a digital version of the old discount coupons you used to receive in the mail and constant giveaways –and married it with a huge social media presence to make a quick fortune.
Yet Portelli is not even close to being the youngest billionaire on the Richest 250. That label belongs to 28-year-old Edward Craven, co-founder of what is likely the biggest gambling company in the world by volume. And like Portelli’s LMCT+, it is less than a decade old.
Craven started his Stake.com cryptocurrency casino and sports book business with American business partner Bijan Tehrani in 2017. Because it’s an online gambling platform, the website is banned from operating in Australia, but the firm has made huge profits from hundreds of thousands of punters in unregulated markets around the world. Stake.com has evolved into one of the biggest gambling entities globally, and in 2022 Craven and Tehrani created another valuable online company, the Kick streaming platform, which is growing quickly and has plans to rival global giant Twitch.
Craven is famous for buying a vacant mansion in Melbourne’s Toorak for about $80m only two years ago. He’s spending about $145m knocking down the mansion and building the house of his dreams on what is a huge site, making it, at least for now, Australia’s most expensive property.
But he’s not the only cryptocurrency gambling magnate on The List.
Tim Heath, 45, is based in Tallinn, Estonia’s tech-savvy capital, where he runs his successful and extremely profitable group based on online crypto sportsbooks and casinos, namely, Sportsbet.io and Bitcasino.io.
Sportsbet.io, which Heath started in 2013, handles roughly €2.5bn ($4.1bn) a month in betting turnover from customers around the world. That and his other investments – spanning 100-gambling and technology-related emerging companies – make up Heath’s estimated $2.15bn fortune.
Then there is 42-year-old Perth technology entrepreneur Laurence Escalante, who is worth $3.48bn thanks to his Virtual Gaming Worlds, a social gaming business that sponsors Formula One giant Ferrari and whose customers are almost all in North America.
Technology has clearly been the biggest mover on The List in six years. There are now 28 members on the Richest 250 from the sector, not including some from eCommerce who are counted under retail. That technology number has doubled from 14 in 2019.
Back then, there was no sign of Canva’s Melanie Perkins and husband Cliff Obrecht, or their co-founder Cameron Adams, on The List.
Perkins and Obrecht would arrive a year later in 2020 with an estimated $1.32bn paper fortune after Canva – founded in 2014 – underwent a seventh round of investor funding to achieve a $4.7bn valuation. Since then, Canva has become a global graphics design sensation, and has set a record by becoming the most valuable private Australian technology company in the process. It is now valued at about $US32bn ($49bn) after further funding rounds and is on track for a blockbuster stockmarket listing in the next couple of years.
The wealthiest Australian tech barons, however, are Atlassian co-founders Scott Farquhar and Mike Cannon-Brookes. They seem to have been around forever – Atlassian was founded in 2002 – but the pair were both only 44 when The List was published in March and their fortunes were each estimated at about $22bn.
Farquhar and Cannon-Brookes are both pursuing several environmentally friendly or green energy investments, but they have also parlayed huge amounts into property.
Cannon-Brookes has spent more than $300m on properties in and around Sydney, including harbourside mansions and southern NSW acreage, and Farquhar in October sold his Point Piper mansion for $130m – the same amount he paid for another Point Piper home, UIG Lodge, in November, 2022.
In that way, they are following that Australian obsession with real estate, a mentality that extends to dozens of members of The List.
This year there were 57 members who made their fortune in property – led by 91-year-old Harry Triguboff ($26.01bn) – the biggest sector on the Richest 250. In 2019, there were 68. But there are plenty on the list who make their money in one sector and go on to consolidate their fortune in real estate.
They are the one-time panel beaters, programmers, cosmetic surgeons, vets, miners, publicans or textile engineers, but once they’ve made their first few millions, these wealthy entrepreneurs switch gears to a lucrative time in property.
There’s a good reason for that: land and house prices seem to always keep going up, and everything from industrial holdings like warehouses to prestigious mansions have performed well as an asset class.
As Jerry Schwartz, a cosmetic surgeon specialising in liposuction and eyelid reductions, told The List this year about his leap from wielding a scalpel to owning 14 major hotels: “I make more money from a 10-minute phone call trying to save 10 per cent on a $100,000 invoice for buying plant and equipment for my hotels than I can in a whole day doing medical consultations.”
There are plenty of other examples.
Billionaire Shaun Bonett is a lawyer turned property magnate, while Tony Perich and his family were dairy farmers before developing their large landholdings in Sydney’s west, around Oran Park.
Nick Andrianakos ran petrol stations, but his family fortune is now mostly held in commercial buildings and shopping centres. Then there’s Sam Arnaout, a panel beater from Sydney’s Greenacre. He now presides over casinos in Canberra and Alice Springs, and a pub empire and residential property projects.
There’s also plenty of money left to be made in some other long-established industries.
Mining magnates like Gina Rinehart ($50.48bn) and Andrew and Nicola Forrest ($37.17bn) top The List, but many of the mining fortunes are inherited, including those of Leonie Baldock and Alexandra Burt ($3.21bn combined), the granddaughters of the late Peter Wright, the former business partner of Rinehart’s late father Lang Hancock.
There are also 18 people from manufacturing on The List, led by cardboard box magnate Anthony Pratt and his family ($27.66bn), up from 12 in 2019.
But there is a twist, encapsulating just how wealth creation has changed in recent years.
Instead of old-fashioned inefficient factories, our richest manufacturers are now smart manufacturers, including the likes of Manny Stul of Moose Toys, who has built a global business from Melbourne now worth $2.86bn, and Peter Freedman of Rode Microphones.
Rode sells more than $300m worth of mics and associated equipment annually, made in Sydney’s Silverwater. Its profit margins, with 95 per cent of revenue derived overseas, are enviable.
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