Sydney 1924 – 5 entrepreneurs open a store in Pitt Street called “Woolworths Stupendous Bargain Basement”. Returns were modest, and it took 3 years for the entrepreneurs to open a second store, this time in Brisbane. In 1940, Woolworths had a store in every state. In 2022, they are Australia’s largest supermarket chain with market share of 37%.
In 1885, a company operating in a silver and lead mine in Broken Hill was incorporated. It took another 30 years until it opened Newcastle Steelworks, the first largescale steelworks in the nation, and employed over 7000 men. In 1991, BHP traded at $3.40 on the ASX. Now, it trades at $45 with a market capitalisation of over $240bn.
Charter Hall opened in Sydney in 1991, taking 4 years to launch its first syndicate in 1995. The company then lists on the ASX 14 years after inception with a FUM of $1b. In 2022, Charter Hall’s FUM has grown to over $52b and they’re an undisputed leader in property investment.
In 1982, Graham “Skroo” Turner, Geoff Harris and Bill James opened 3 travel ‘bucket’ shops in Brisbane, Melbourne and Sydney, forever changing the way Australians embraced international travel. In 1995, the 3 took Flight Centre public on the ASX having grown the business to over 100 stores and $10m profit. 25 years later, prior to the global Covid pandemic, Flight Centre turned over $20bn and made $360m in EBIT. In spite of all of the turbulence in the modern world, Flight Centre endures, just as it survived challenges in the past including the Gulf War, September 11 and the GFC. An extraordinary values driven organisation with an incredible culture that endures as a consequence of a commitment to play the long game.
Australian corporate history tells us that great things take time. There’s always the temptation to grow and scale rapidly, but the majority of the most successful individuals in Australia have been focused on running their own, or their families, business for decades. Even when looking at the Young Rich List, which consists of many fortunes which have been propelled by the technological boom, you find that they have been focused on running their business for most of their career and remain committed to continuing the growth and success in that business.
Warren Buffet is one person who understands the benefits of ‘playing the long game’, with the vast majority of his $114b wealth being created after he turned 52.
In his eagerly awaited annual chairman’s letter released in February, the Oracle of Omaha again displayed the extraordinary value in playing the long game. Berkshire Hathaway’s fund returned only 0.9% above the S&P500 in 2021, but compounded since 1965 the fund returned 3,600,000% versus 30,200% for the S&P500.
At Straight Bat Private Equity, we believe in the benefits of ‘playing the long game’ and are eager to support founders, families, and partners who are looking for a patient investor that will help them succeed over the very long term.
If you are a long-term owner and are seeking a funding partner to join you on the long journey of consistent success, please reach out by filling out our enquiries form HERE.
