The next generation of the Kahlbetzer family reveal Twynam Agricultural Group’s new direction
John Kahlbetzer was one of the biggest names in agriculture. His two sons reveal just how they are taking the family fortune in new, and unique, directions.
It was supposed to be Markus Kahlbetzer’s gap year in Australia, a world away from the bustling streets encircling his ritzy apartment in the Argentinian capital, Buenos Aires. Born in America, Markus had moved between the US and Argentina throughout his childhood before the Great Argentine economic depression took hold in 1998. His first visit to Australia a year later at the age of 18, where he met his now wife Sally, changed his life.
The trip would also forever alter the destiny of the billion dollar fortune built by his famous father John, a German immigrant who came to Australia in 1954 and built his Twynam Agricultural Group into one of the nation’s most famed rural landholders.
In 1982, the year after Markus was born, John Kahlbetzer created his Argentine agricultural operation known as LIAG. In the decade that followed, he quietly hoped that his youngest son would one day take over that business and that his older son, Johnny – who joined Twynam in 1991 – might run the family’s Australian operations. But his youngest son had other ideas.
“It was a depressing time in Argentina for many people,” he now recalls.
“Not necessarily for me. But I didn’t have a support network that I might have counted on. Dad wasn’t there and my mum hadn’t moved there. So I was 18 in Argentina, and I met the girlfriend here in Australia. I’m like, ‘Well, it’s pretty shit being over there.’ So I just kind of spat the dummy and said, ‘I’m coming to Australia.’ Dad thought it was more of a temporary thing, but it became a permanent thing.”
Markus completed an agricultural economics degree at the University of Sydney, took Australian residency, got married ,and then for five years worked in a management role at Twynam developing new projects. But he still had itchy feet. “I’d watched Johnny sitting behind Dad for much of his young professional career. I thought, if I stay here behind Johnny, I’m going to be 60 by the time I can make decisions for my own destiny,” he says.
In 2009 John Kahlbetzer supported his youngest son’s creation of BridgeLane Capital, a venture capital firm seeded with cash and ownership of the 80,000ha of cropping and livestock country in Argentina he always hoped his son would one day run. Johnny, 16 years his brother’s senior, was handed responsibility for Twynam.
Now in their first-ever interview together in Twynam’s Darlinghurst offices in inner-city Sydney, the sons reveal that their now 91-year old father has recently ceded all economic interest in his empire to the next generation, completing the process Markus started nearly a quarter of a century ago.
We pioneered a lot of things in Australian agriculture and are glad we did it
For the past three years, John Kahlbetzer has also had no operational involvement in Twynam. “The baton has certainly been passed,” Johnny says. His brother concurs, adding that he has always admired and respected his father for supporting his wishes for independence.
“I’ve always appreciated that we were all able to sit around and discuss things and kind of set it out early. Dad was very conscious and able to do something, because it happened years ago, rather than now,” Markus says.
Indeed the Kahlbetzer’s has been a textbook succession and over the past decade the sons have been reshaping the family empire in their own image.
Fifteen years ago Twynam boasted 22 broadacre cropping, livestock and citrus holdings and owned the Colly Farms cotton business, making it one of the nation’s largest agricultural producers. “We pioneered a lot of things in Australian agriculture and are glad we did it,” Johnny says. “We created the biggest cotton growing area in Australia. In Argentina, we took irrigated cotton to the northeast of the country.”
But after the global financial crisis, the Australian land portfolio was progressively sold down, aided by the Rudd government’s $3.1 billion water buyback program, which in 2009 saw the controversial purchase of 240 million litres of water from Twynam for a record $300m. Now only two smaller farms – Wingello Park and Johnniefelds, together spread across 1400ha near Marulan, south of Sydney – remain. There Johnny has a family “weekender” and oversees breeding Angus cattle and polo ponies in a regenerative manner, preserving traditions that have been part of Kahlbetzer family history. He says in addition to the Twynam properties becoming dryland with the water buyback, there was another rationale to the asset sales.
“We just realised that we’d all had enough of dealing with drought,” he says. “So I guess one of the negatives of having such a diverse portfolio of properties is you’re always having a drought. Once we made that decision that we weren’t going to be a really big company, we decided we should sell and Dad supported that.”
Johnny moved to Monaco to focus on a venture known as Twynam Agriculture Africa to grow cotton and food crops in Sudan, but the project was eventually abandoned.
From the almost 100 per cent focused agricultural business built by their father, over the past decade the sons have diversified Twynam and BridgeLane into property development and venture capital projects.
From my environmental side, we cannot create a sustainable world while we keep chasing more and more and more
Twynam is now backing a range of businesses involved in green technologies, sustainable farming and renewables.These include converting waste cotton fabrics into new fibres for clothes, recycling organic waste through insects, recycling CO2 into chemicals and fuels, and supporting the production of alternative protein sources. It also funds the World Wildlife Foundation’s program to eliminate plastic in Australia and is working on ocean clean-ups across the globe.
“From my environmental side, we cannot create a sustainable world while we keep chasing more and more and more,” Johnny says. “That’s not to say you should not replace something for something new but we are all accumulating a whole lot of junk, stuff we don’t need and basically don’t use.” He notes that he inherited his environmental passions from his father. “Dad has always been environmentally focused. If someone suggested cutting down a tree, in most cases he would prefer to keep it and work around it.”
He hopes that in five years time Twynam will have moved out of most of its property development projects and be involved with a number of very successful decarbonisation companies and strategies. “Hopefully, we will also have been able to make a big impact on the plastic pollution situation around the world,” he says.
In his brother’s world, since its inception BridgeLane has invested in companies typically in the online/mobile technology, sustainable food and agricultural robotics sectors. It now backs an eclectic range of businesses, including a hydroponic enterprise called Sprout Stack, which grows salad greens in transportable shipping container-sized farms in Sydney and Brisbane.
BridgeLane has also been a key investor in venture capital firm Tank Stream Ventures, along with Airtasker’s Tim Fung, Jonathan Lui and former Renault Formula One engineer Rui Rodrigues, who managed the investments.
Markus reveals that BridgeLane has now taken full control of Tank Stream from Fung and Lui, and is rebranding the firm BridgeLane Ventures and raising $50m for a new fund that will invest in environmentally-conscious companies focused on sustainability.
“Tim and Jonathan were the first employees at [telecommunications and energy account company] Amaysim,” Markus says. “That was my first foray into venture investing and where we met. We’ve gone on to invest in other great startups, like [workforce training firm] Go1, which now is a unicorn and we invested much earlier than a lot of the VCs, which are much bigger than us today.”
Given BridgeLane also inherited John Kahlbetzer’s cropping and livestock country in Argentina, Markus says he is keen to do something to better monetise those assets.
The Kahlbetzer scions have had their debates over time. Johnny has long believed his brother had a responsibility to return to Buenos Aires to oversee the Argentine agricultural business. But Markus has been clear he will never again live in the country of his schooling. Thankfully they have a first class team of managers on the ground there.
Team development is something Johnny says he has admired watching his younger brother build BridgeLane. “That whole how you team up businesses I think is the biggest area of learning from him for me, and seeing the errors that I’ve made on that over decades,” he says. Asked what he has taught his younger brother, Johnny replies with a wry smile: “How to manage dad! He’s not an easy man.
“Where I do think it was harder for me than Markus is while Dad’s always been difficult, he was a lot worse when he was younger. He has mellowed. Dad and I have had times when we haven’t spoken to each other for a year or so. We have certainly had difficult times. But we are good now. I probably spend more time talking to him than Markus does.”
Johnny last saw his father in the US in November. Markus hasn’t seen him for more than two years due to Covid. Both acknowledge they remain conscious of his mortality.
“Two years ago, we thought it was very close,” Markus says, noting that when the day does come they have peace of mind that at least succession in the business has been sorted, a testament to his father’s foresight. “If he’s having a bad month or you think ‘Oh no, this is it for Dad’ or whatever, it’s not like, ‘Oh, my God, we’ve got to call in these lawyers or accountants and start from scratch’.”
Johnny is more sanguine about the prospect of life without his father. “Having lost one parent, I guess it is maybe more front and centre for me, given Markus’s mother [who still lives in America] is still alive,’’ he says.
Johnny is referring to the passing of his mother, Virginia Kahlbetzer, who died in 2013 after a battle with lung cancer.He reveals he and his family returned to Sydney from Monaco to spend eight months looking after her before she died and that they remained close to the end.
He will never forget being at a ski resort in Europe when he received a phone call from his mother. He was there with his wife Donna, once married to former world motorcycle champion Wayne Gardner. “It was Christmas Day or New Year’s Day. Donna had broken her leg skiing and I had a neck problem and that day, my cortisone injection had stopped working. We were lying in bed next to each other, really pissed off with life,” he recalls.
“Mum rings up, we thought to say Happy Christmas or New Year, whatever it was. I say ‘How are you? She goes “I’m fucked. I have just been diagnosed with cancer.’”
Virginia was given three months to live. She lived for five more, passing away in August 2013. “My cousin was there when she died. I had gone to Double Bay to pick up something and when I came back she was gone,” Johnny says softly.
Two years later Johnny made headlines when he sued the Garvan Institute of Medical Research – to which his mother donated regularly for 12 years before her death – after she left it the residuary of her estate. He argued in the NSW Supreme Court that the will his mother made on June 25, 2013, less than two months before her death, was invalid because she “lacked testamentary capacity”. An earlier will made in 1990 made him a residual beneficiary, meaning he would receive everything not given to specific beneficiaries. He was shocked to see the new will days before she died.
With our experience of being in Argentina, anybody with wealth does not want to be seen. You just want to hide
“That was a media beat up. The deal that mum and I had made was she was going to leave me the money and I was going to give the money to the Garvan,” Johnny says.
Which is why, as part of settling the case, he says he agreed to donate $11m to the institute as a memorial to his mother, with the request it be used to research a cure for lung cancer. “The Garvan actually got more money out of the settlement than what Mum was going to give them,” he says.
Both Kahlbetzer sons are deeply conscious of the legacy created by their father and have always respected his penchant for privacy. “And with our experience of being in Argentina, anybody with wealth does not want to be seen. You just want to hide, because you become a target for violence,” Markus says. He acknowledges his father achieved great things, without the backing of his German family or anyone else. But he also believes he inherited his father’s entrepreneurial spirit to build something of his own.
“I don’t want to just have something that’s been passed down to me. So I think about what is going to be my lasting legacy that I can pass on to my kids, other than maybe a bunch of assets? What am I going to do today to make a multiplier on that and really make a lasting legacy of my own,” he says.
His daughter is now 12 and sons 9 and 7. He hopes they will want to carry on the Kahlbetzer name in BridgeLane, but is conscious of his father’s mantra supporting independence. “Dad always said ‘I don’t care what you do as long as you do it well, or you love doing it.’ I’d love all three of my kids to be involved in what I do and because our businesses are not operating ones, they are more accommodating to that,’’ he says. “But I love cycling and my nine year old does too, so maybe he runs a bike shop one day and maybe my daughter goes into the venture capital side.”
Johnny, who still lives in a Vaucluse mansion once owned by his father, says the experience of splitting the Kahlbetzer empire has made him think deeply about the future for his two sons. The eldest, who looks set to join the army when he leaves school, has shown an interest in farming. The younger hasn’t. “In five years, maybe my kids will be at university or maybe in the business and looking at what passion they have. We will see if any of the things we are involved in, they want to be involved in. Or we will be supporting them to do something which excites them,’’ Johnny says.
He says he never does an analysis of his own or the family’s worth. Never has and never will. “The reality is an extra $10m or $100m , whatever, is not going to change any of our lives. It’s a matter of whether you have enjoyment with what you do and you’re happy with what you’re doing.”
“Very few people are happy with what they’ve got. I am very strongly of the view that the money does not make you happy. I think the burden is the expectation by society or parts of society that you should always be driven to make your wealth more. And quite often I give that the big finger!”