The Secret Broker: Everyone has a Twiggy Forrest story – mine has a lot of whisky in it
The Secret Broker
The Secret Broker
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After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.
I know you parochial Aussies will not want to hear this but your Twiggy is not a household name in the UK.
He is considered a bit of an imposter over there because there can only ever be one Twiggy to them and it’s the one who wears the red on their nails who the Brits admire and adore – not the Aussie who sports the red under them.
Here is a picture of their Twiggy in 1967:
And here is a picture of your Twiggy a couple of years earlier:
Mind you, both have a fair bit in common.
Both arrived in the world as the ‘accidental’ third child. News of their pending arrival was not overly welcomed by their mothers though both have a famous relative who lived in the 1800’s.
Your Twiggy has John Forrest and their Twiggy has Gracie Meadows.
His John Forrest went on to become the very first Premier of WA in 1890, whereas her Grace Meadows went on to be famous for being killed in a stampede of excitable shoppers at a bargain sale at Messrs McIlroy’s store on Mare Street in Hackney, in 1897.
This is where they
bifurcate separate though. (Don’t tell the editor but the boys shout me as many beers as I can drink in an hour, if I manage to sneak in a word they have chosen for me – “ bifurcate” was this week’s word).
Their Twiggy is still looking fabulous at the age of 71, whereas your Twiggy is looking a bit, as Dame Edna Everage would put it, puddingly.
You can’t blame him.
This week, FMG became worth more on the ASX than ANZ Bank and Twiggy has managed to keep hold of 30% of his company, so he can eat as many jam roly poly puddings as he damn well likes.
When he sat down at his kitchen table and drew a map of a port and a train line and told Mrs Fortescue that this was going to cost US$2bn to put together and he was off to meet his ANZ bank manager, she palm slapped her forehead.
Not because she thought it was a stupid idea but because she knew he could do it.
Backed up by his motto of ‘Never Ever Give Up’, he went out to look for money.
Of course ANZ wouldn’t have a bar of it but in August 2006, he did indeed get his loan.
After 150 presentations, he managed to raise AU$3.7 billion and buy himself a new kitchen table and an effing big digger.
The main lender was New York-based Leucadia National Corporation, who threw in a lazy AU$535 million.
This made it, at the time, the largest corporate bond transaction in the history of the Southern Hemisphere.
In a letter to shareholders explaining their deal, Leucadia’s chairman Ian Cumming wrote; “Fortescue Metals Group is the creation of a hyperactive, smart, energetic Australian entrepreneur named Andrew Forrest.”
He then wrote: “Imagine the Energizer Bunny.”
And the rest is history (and he is still beating his drums).
Next year he will pocket A$2bn in dividends alone and everyone I meet always has a pre-rich and famous story. This is mine.
I had a fellow broking mate, who was Andrew’s boss when Andrew was a broker himself. Jim Nitfield had to move Andrew from Jacksons (a famous Australian broking house, at the time) HK office back to Australia, as the office manager over there wanted to sack him.
Jim had to take control of the situation and calm everyone down and he told me he gave Andrew another chance.
I once IPO’d a company and the chairman Pedro McDoughnut told me that a young Andrew had approached him after a presentation, wanting to know how Pedro had listed and kept control of 10 companies at the same time.
Pedro explained to him how, one company with cash would take a placement in another one and this shuffle would now leave one with the cash and the other one with the same cash amount but in listed shares.
So A$1m in cash leaves one company and becomes A$1m worth of listed shares. The A$1m stays in the group but now the group has created an extra A$1m in assets. A$1m in cash and A$1m in shares.
Andrew called him a ‘genius’, which he was.
Another broking mate of mine, who Andrew would use because he was extremely discreet and loyal, wouldn’t say very much, until after the third port had been consumed, when he would say in passing that he had just got back from a world trip with Twiggy and wink his eye.
It turns out that they used to meet in a whisky bar and the barman would stamp the map in a special passport that they each had with the country from where their last dram of scotch came from.
Eventually, over a week, they would travel around the world together, one single malt at a time.
Andrew could now actually do this for real in his private jet. Or boat.
But he now seems to be on a mission of giving, and next year, he’ll have a couple more billion from which to give. Salut:
I’ll leave you with a photo I found on the web and let you decide if this person is looking after FMG’s assets or Andrew’s personal assets.
Source: The Hive-Fortescue Metals Group.
(They all look like Bloomberg screens to me.)
The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at email@example.com.
Feel free to contact him with your best stock tips and ideas.