Benefitting from Australia's $4 trillion wealth transfer

Note: This extract was taken from Livewire Live 2024’s panel: '5 seismic shifts happening right now and how to take advantage of them' filmed 17 September 2024. You can watch the full panel here.

The baby boomers presided over the greatest era of wealth creation in human history, and according to multiple sources, they control more than half of the total wealth in America and Australia.

The boomers are now reaching the age where priorities change and, as a result, we're about to witness the greatest wealth transfer ever.  

That will create a plethora of investment opportunities as businesses reshape, founders look for exit strategies, and new owners look for fresh capital and opportunities to pursue.

According to Srdjan Dangubic from Five V Capital, which has built a business around the trend of intergenerational wealth transfer, in Australia about $4 trillion worth of assets will be transferred in the next 5-10 years, representing around 5,000- 7,000 businesses.

This hive of activity is “unlocking a great flow of investible opportunities in high-quality assets”, which he finds incredibly exciting.

In the attached clip, from Livewire Live 2024, Dangubic provides the example of an investment in ratings agency Zenith, which Livewire readers should be familiar with.

As he explains, two of the four partners in the business were looking for an exit, “and it created a great opportunity for us to partner with David and Ben (the remaining partners) and push to grow that business over a number of years”.

After a handful of acquisitions and an investment from a company named FE Fundinfo, the outcome has been pretty good so far.

“It enabled us to lock in a great return for our investors and de-risk our position. It gave David and the management team a new partner with a broader service offering from an ANZ perspective. And it's allowed that business to go from strength to strength” says Dangubic.

All that said, it all started with the first critical step.

“The key step in that chain that has ultimately played out was a couple of founders that built a great business wanting to step away.

That was the opportunity for us. We are quite excited by the trend that's playing out”, says Dangubic.

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