(Bloomberg Markets) — Peppermint Grove, a suburb of Perth in Western Australia, has all the trappings you’d expect of one of the wealthiest postal codes in the country: sprawling riverside mansions, exclusive schools and a yacht club.
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But lately there’s a new sign that the Perth elite are starting to tip over the line separating the merely rich from the fabulously so. Glance in a real estate agent’s window, and you’ll often see properties advertised with a telltale phrase: “Perfect for a family office.”
Financial hubs such as Dubai, London, New York and Singapore have long dominated the rarefied world of family offices—outfits that typically cater to a single $100 million-plus client with services that can include managing money, taxes, charitable donations and even household help.
Since 2019, as the rich get richer, the number of family offices worldwide has more than tripled, to almost 4,600 last year, according to investment data provider Preqin Ltd.
But the wealthy don’t live only in global glamour cities. Family offices are now popping up in places like Perth, on the coast of the Indian Ocean, 1,300 miles from Adelaide, the nearest major metropolitan area, and closer to Jakarta than Sydney.
After an almost two-decade-long mining boom, Perth, with a population of more than 2 million, has 64 centi-millionaires. That places it among the richest cities in the world by that measure, tied with Stockholm and ahead of Berlin and Dublin, according to data from citizenship consulting firm Henley & Partners.
Andrew Forrest and his family top the list of the richest Australians, with a fortune of $29.2 billion in mid-May, according to the Bloomberg Billionaires Index. He grew up in the outback and founded the iron ore miner Fortescue Ltd., which is based in Perth.
Andrew and Nicola Forrest call their family office Tattarang; it invests in public and private companies and works with their philanthropic Minderoo Foundation. (In 2023 the couple announced their separation, but said there would be no impact on their shared ventures.) Tattarang’s “bespoke model” helps its founders fund “strong and sustainable businesses across sectors where we believe we will have the greatest impact—for example, renewable energy, critical minerals, agri-food and health technology,” a spokesman says.
Other affluent families are less well-known, making their mark selling tools to miners as well as other businesses that have benefited as the size of the mining sector has more than doubled since 2000, to 13% of Australia’s gross domestic product.
Shaun Parkin, who helps families set up and manage their offices, says he works, or has had meetings, with more than 20 of these companies, each of them overseeing more than A$200 million ($131 million) in assets. “A lot of the ones that I meet, I had no idea that there was that level of wealth,” says Parkin, co-founder of local consulting firm Hall Road Services. “And I would say that most people haven’t, either.”
Family offices have some universal attractions. They typically have minimal disclosure requirements and let the rich exert tight control. But in Perth there’s an added fillip: Many locals have a deep-seated skepticism of outsiders. That most definitely includes representatives from big global wealth managers who want to run their money from far away.
Consider Perth native Rod Jones, a founder of the education company Navitas Ltd. In 2019 a group led by private equity firm BGH bought Navitas for A$2.1 billion, so it was no secret Jones might need wealth management. But he got so annoyed at countless calls from distant professionals pitching opportunities or looking to handle his funds that he reached the point where he told one, only half in jest, “Look, I’ll give you $200,000 just to go away.”
Instead, Jones set up a five-employee family office, Hoperidge Capital. It invests in some blue-chip stocks but focuses mainly on direct holdings, including private credit.
“I’m just a person that enjoys the cut and thrust of being in business, putting time and effort into picking good opportunities and backing them up,” he says. Cookie-cutter pitches are of little interest. “To invest with someone, I’ve got to meet you, I’ve got to understand you, I’ve got to know you, I’ve got to feel comfortable with you.”
Other Western Australia family offices share this desire for familiarity. Many are clustered within walking distance of one another in what’s known as the Golden Triangle, an exclusive group of suburbs between the Swan River and the coast.
Emilio Pagano, chief executive officer of Lance East Office, says he talks regularly with more than a dozen of his peers about longer-term investments that appeal to their clients’ entrepreneurial bent. Lance East manages the money and philanthropy of Laurence Escalante, founder of VGW Holdings Ltd., a closely held online gambling company, who has a personal fortune of about $2 billion, according to the Bloomberg Billionaires Index.
Family office clients are often comfortable with risk because of Western Australia’s mining heritage, according to Pagano. “Think about how mining eventuates,” he says. “You go out in the middle of nowhere, starting from the most remote capital city in the world. And then from there you drive out 3, 4, 500 kilometers, and you start looking around the desert for mining assets and digging.”
Family office clients are often comfortable with risk because of Western Australia’s mining heritage
For all the opportunity, a remote location poses a challenge: Where do you find the staff with the knowledge to compete or negotiate with the finance big shots? Perth has only 13,000 full-time financial-services managers or professionals, compared with 108,000 in Sydney, census figures show.
Family offices are typically run by a CEO or chief investment officer and as many as 10 staff members. Insiders say the top job tends to go to someone who’s worked in the founder’s business operations and is already a trusted adviser.
CEOs commonly take home a salary of A$396,001 to A$500,000, with an additional annual bonus of 21% to 30%, according to a report from consulting firm KPMG and family office recruitment company Agreus Group. That’s more than their peers in Europe, though less than in the US. (The report doesn’t break out Perth salaries, but industry executives say they are broadly comparable.)
Parkin, the family office adviser, says recruiting has to be a “little bit more imaginative” in Perth. He’ll often trawl LinkedIn profiles for people who grew up or attended university there and might be amenable to moving back.He knows the transition well: He worked in finance in London, had a senior job at State Street Global Advisors in Sydney and relocated back to Perth, his wife’s hometown, to be close to family. The more relaxed lifestyle is another draw. In Perth, days often start and finish early, and some of the world’s best beaches are just a short drive away.
But there’s another angle to the pitch, too. Family offices work directly with billionaires and centi-millionaires, giving advisers a bigger say in decisions. “You probably wouldn’t get access if you were part of a larger business,” Parkin says.
The industry is now looking to the next generation. Today’s mining magnates will one day hand over their businesses or wealth to their kids. In a booming economy, opportunities in construction and service industries could create the next round of family office customers.
Tayyab Mohamed, Agreus’ co-founder, says the market could well grow far bigger: “I wouldn’t be surprised if in a few years Perth becomes a bustling ecosystem.” —With Ben Stupples in London
Brumpton is a Bloomberg News reporter in Sydney; Hunt, in Melbourne; and Winters, in Singapore.
(Adds context on Forrests in paragraph 8. An earlier version corrected the spelling of a company name in paragraph 12.)
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