Andrew Heathcote Rich Lists editor

Andrew is BRW's Rich lists editor and is responsible for the Rich 200 and Young Rich flagship issues. He also reports on matters relating to wealth and investment for BRW and The Australian Financial Review.

View more articles from Andrew Heathcote

Youthful exuberance

Published 22 September 2011 05:00, Updated 16 December 2011 10:44

+font -font print

You have to hand it to them. While many people in business have been struggling to cope with a runaway exchange rate, falling consumer sentiment and restrictive lending practices by the banks, the BRW Young Rich have continued to boost their wealth.

Click here to see the BRW Young Rich List 2011

Collectively, the net worth of the Young Rich has risen to $7.3 billion from $6.3 billion last year. The amount needed to make the list has also risen to $20 million from $19 million last year. There’s also a massive 26 new entrants on this year’s list. Entrepreneurship in Australia is alive and well.

On top of the list is Nathan Tinkler , whose star continues to shine. This 35-year-old coal baron’s fortune has grown significantly. He topped the list last year with $610 million.

By May 2011, he joined the elite group of billionaires on the BRW Rich 200 with $1.01 billion. His wealth has continued to increase. By topping the list with $1.13 billion, he sets a record for having the most money.

UK-based financial services whiz Greg Coffey retains second spot with $743 million. In third is another member of the Rich 200 Steven Kalmin , the chief financial officer of commodities trading firm Glencore International, which underwent a major public listing in May.

Kalmin is the richest of 20 debutants on the Young Rich this year. Two more of its members are re-entrants. Sass & bide founders Sarah-Jane Clarke and Heidi Middleton return after the sale of a 65 per cent stake in their business to Myer for $42 million in May.

The requirement that all Young Rich members be aged 40 or under, ensures that there is a healthy turnover of names each year. Most of those who missed out this year were victims of the age rule and include Hilton Nathanson who was placed third on last year’s list.

But the higher cut-off provides proof that the new entrants are worthy of their spots on the list. They include Hezi Leibovich, one of the two brothers behind the highly successful group buying web site Catch of the Day.

It was recently valued at $200 million despite only being five years old. Since the list was first published in 2003, the technology sector has produced many list members.

This year it provides more than ever. More than one-quarter of the list in 2011 (26 per cent) make their money in technology. This compares with just 3.5 per cent of the Rich 200.

The resurgence of the technology sector has much to do with the insight and abilities of young entrepreneurs. As Jeanne-Vida Douglas explains in “Dotcom rivers run again”, there has been an increase in activity in the technology sector over the past 12 months and this is creating big opportunities for smart people. Among those to benefit is Bevan Slattery whose wealth has risen 129 per cent as a result of the successful initial public offering of Slattery’s data centre company NEXTDC in December last year.

The second youngest on the list, Ruslan Kogan, has had the second biggest increase in his net wealth. (The youngest list member is 26-year-old basketball star Andrew Bogut.)

Perhaps surprisingly, two of the top five on the biggest risers list make their money in property: Melbourne-based Ashley Williams ($240 million, up 100 per cent) and Perth-based Ronnie Elhaj ($64 million, up 88 per cent).

Some of the other sectors have not performed as well. “Bricks and mortar” retailers have struggled to grow. As John Stensholt explains in “Home-field advantage”, young sports stars have also had a difficult year.

Many of them earn all of their money in US dollars and this has hurt their valuations in Australian dollar terms.

Several list members have been benefactors of some big sales over the past 12 months. Guy King and Bevan Clark join with a combined net worth of $77 million as a result of the sale of to WhaleShark Media for $90 million.

Ashley Fraser went close to debuting in the top 10 after raising a reported $55 million from debt markets to fund the earthmoving business he co-owns. And 38-year-old Ryan Trainor disposed of Franklyn Scholar to Kaplan Australia in June for an undisclosed amount.

Victoria remains the biggest source of Young Rich members, extending its lead over NSW. Thirty-three of the list call Victoria home, while 26 are in NSW.

Unlike last year, Queensland provides more list members (17) than the “rest of the world” category (15). The number from overseas is down from 17 last year – perhaps not surprising given global economic conditions.

The 2011 edition of the BRW Young Rich is filled with many great stories but all those who made the list remain, by their own admission, “works in progress”.

All of them are mid-career and have much more that they want to achieve. Whether the Young Rich can continue to outperform the market remains to be seen but based on this year’s strong performance it seems likely that they will.