This week I am doing something different in Entrepreneur Watch, and looking at five rich list members who entrepreneurs should keep a close eye on over the next few years. I’ve chosen them because their personal empire is at an interesting point and their industry is undergoing structural change – how these entrepreneurs react will set an important example for other business owners.
Has there ever been a better zero-to-hero story than that of Nathan Tinkler? His five-year journey to become the youngest member of BRW’s Rich 200 list and easily the youngest member of Australia’s billionaire club is staggering.
In November 2006 – less than five years ago – he bought a coal mine in Queensland for $30 million, after stumping up $1 million of his own money.
In June 2007, he sold the mine to Macarthur Coal for $265 million, taking the bulk of the $200 million cut in Macarthur shares. In May 2008, he sold those shares for $445 million.
He then bought the Maules Creek deposit for $480 million in mid-2009, before floating it in early 2010 for around $1.2 billion, through a vehicle called Aston Resources.
In less than four years, his fortune has gone from less than $1 million to an estimated $1.01 billion.
The speed with which Tinkler has moved and his willingness to trade assets means it’s difficult to track his next move.
Aston remains some years from production and getting the mine up and running on time and on budget won’t be easy, but Tinkler does appear to be in this project for the long haul.
But away from mining, he’s showing a clear desire to diversify his assets as widely as possible.
In recent years, he’s invested in operational companies (such as Newcastle-based construction company Buildev, in which he’s invested about $8 million) and property development. Tinkler was also part of an unsuccessful consortium bidding for Queensland’s $2 billion Abbot Point Coal Terminal.
There are also plenty of “passion” investments, including sporting teams (the Newcastle Knights and the Newcastle Jets), a giant horse racing empire called Patinack Farm and a luxury car club that eventually collapsed.
It will be interesting to see whether Tinkler creates a few core wings to his empire (say resources, property and sports) or continues with his apparent willingness to examine opportunities in a number of different strategies.
Diversification is a sensible strategy, but the danger of stretching yourself too thinly should not be ignored.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
