Last week after a long, hard day at the Sheraton Mirage on the Gold Coast – where I was speaking at a superannuation industry gabfest – I found myself sitting next to a banker over dinner. Evidently his major investment that evening had been Foster’s.
Perhaps it was that he was already seeing double, but he managed to put two and two together (we were at a finance junket, I was the youngest person on the table) and said: “Whaddya know about that Nick Bolton?”
For the uninitiated, last year a young bloke named Nicholas Bolton bought 47 million shares in BrisConnections for the princely sum of $47,000 (the shares were trading at a tenth of a cent).
But these shares were anything but a bargain. The reason they were so cheap was they were partly paid shares – meaning shareholders were obliged to cough up two more $1 payments for each share they held.
So Bolton, then a 26-year-old university dropout from St Kilda, was on the hook for around $96 million dollars. Initially, people thought that the shaggy-haired kid had been on the green gear – or else that he’d made a massive mistake and clicked on the wrong stock.
Yet while the bankers and the media were sneering at his predicament, Bolton was setting himself up to snooker some of the sharpest investment bankers in the country.
His company, Australian Style Investments, called for the winding up of Australia’s biggest road tunnel project, and in the process faced up against the formidable fee factory, Macquarie Bank.
At the eleventh hour he sold his voting rights to the BrisConnections builder, Thiess John Holland, and made a quick $4.5 million.
Luck or genius?
“What I wanna know ish thish – Is this kid a friggin’ genius or just a lucky prick with rat cunning?’ said my beered-up banker mate.
I had no idea. Yet upon returning to Melbourne this week I decided to catch up with Bolton and find out for myself. So I gave him a call.
Barefoot: “Let’s catch up for a beer at my local, the Mitre Tavern.” (the infamous Melbourne watering hole frequented by the financial community)
Bolton: “Ah, well, I don’t think that’s really my scene if you know what I mean.”
So instead he suggested we meet at Journal, an uber-cool joint smack bang in the middle of the city that felt more like Manhattan than Melbourne. It was so cool, in fact, that I’d never heard of it.
As a bloke with an unblemished record of heterosexuality, I can honestly say that Bolton is one good-looking rooster.
When we met he was wearing his trademark designer suit, designer sunnies, designer bed hair, and designer stubble.
Throughout his legal proceedings with BrisConnections, Bolton was splashed across the media – apparently he’s one of the youngest people to be on the cover of the Australian Financial Review, and even appeared topless in The Age (courtesy of a rogue Facebook picture).
Not so naive
Your have to wonder whether a fat, 55-year-old bloke in an ill-fitting suit would have caused as much of a stir.
Doubtful. Yet there are many fat, 55-year-old blokes in ill-fitting suits who work in the media, and they were happy to paint him as a rich, spoilt little brat, with a dash of venom for good measure – “tousle-haired Bolton, all pink lips and smirk” and so on.
He was initially portrayed as a naive kid, but that’s certainly not the impression I got.
At age 19, Bolton saw a gap in the domain registering business, and with $3000 set up a competitor to Melbourne IT.
The business, Domain Central, has been included in the Deloitte Tech Fast 50 awards for the past two years.
Bolton claims his various enterprises employ “around 50 people”, with offices in Australia, the US and India. He also claims that he has a personal net worth of “about $10 million”.
If true (and I am an avowed sceptic of anyone under 30 making such claims), it’s an impressive achievement for a 27-year-old.
I found Bolton to be cool, careful and, above all, calculating. Throughout our meeting, whenever he referred to the BrisConnections case he used the royal “we”. While he dismissed it as “a habit”, it’s clear that Bolton has a sharp, highly paid team of suits advising him.
Bolton has been described as a corporate white knight – helping out small shareholders – but, as they found out on BrisConnections, he’s nothing of the sort. Yet he bristles when I suggest he’s a “greenmailer” – someone who purchases a controlling shareholding in a company to get paid to go away (for a premium). But that’s exactly what he has done.
During the boom, financial engineers working for investment banks bought up staid old assets (like toll roads), pumped them full of debt, then proceeded to extract hundreds of millions of dollars a year in fees by way of complex management agreements.
They largely got away with it because interest rates were low, people were (too) comfortable with debt, share prices kept increasing, and the management structures were so complex.
Shock and awe
“I find it extraordinary that they got away with it,” Bolton says of the hundreds of millions of dollars in fees that investment bankers ripped out in management agreements throughout the boom years.
Macquarie Bank (among others) is now hastily exiting the “satellite” management structure it pioneered.
So, back to the boozy banker’s original question: Is he a friggin’ genius? Undecided. He’s not yet 30, and, let’s be honest, the term “genius” should be reserved for people who really deserve it – like sporting stars.
Is he just a lucky prick with rat cunning? Absolutely. But no more so than the bankers who dreamed up the original deals he’s now picking over and profiting from.
Tread your own path!