Hugh Robertson's rise from farmer’s son to all-star broker (and 2 under-the-radar companies)

A veteran of Australia’s broking industry, Hugh Robertson’s success is built on his people skills and “uncanny intuition” – rather than numerical acumen or conventional wisdom.

Growing up on the land, Robertson realised early on that farming wasn’t for him. The loss of his father at a young age saw him stumble upon the stock market when he was handed responsibility for the family’s share portfolio, which had been kicked off by his mother and his grandmother before her.

“Crutching a hundred lambs prior to being sent off to market quickly disavowed me of ever going on the land,” recalls Robertson in the opening minutes of the latest Success and More Interesting Stuff podcast.

And comparing his investment career to his early life on the farm, Robertson says: “I am the first to admit that I might get stocks wrong, but I get farming 100% wrong.”

While he maintains a connection with farming, including operating what is widely regarded as one of the great public gardens of Victoria, Robertson forged a career in finance.

While Robertson had the advantage of a top-quality education – something he later realised was only made possible by substantial sacrifices by his hard-working parents – his career wasn’t assured. After a false start studying law, he landed on stock broking as a potential career.

“I tramped around the broking firms of Melbourne. And I've always felt, as a result, immensely sympathetic to anybody going for a job,” says Robertson.

“Because when you knock on 24 doors and 23 barely even give you the time of day, you understand how depressing the whole process is. I almost ran out of broking firms until finally, one gave me a job.”

That firm was a now-defunct broking firm called McKinley Wilson, where he learned the foundational skills of the business. Being paired up with some of the firm’s oldest retail clients taught him many tough, but important, lessons.

“So young dog, old dog…and the old dogs could be pretty brutal, and they could be harsh, but they could also be very indulgent. And so, you ended up learning a lot from those clients,” Robertson recalls.

From here, he moved up through the industry and onto another broking firm called Falkiner. As a mid-sized firm in Melbourne, he encountered some of his early success stories, Iron Carbide Australia and Monadelphous. Robertson explains the broking community at the time largely ignored such firms, which is why they presented such a rich opportunity.

Discussing the Perth-based engineering firm Monadelphous (ASX: MND), “was not on anybody's radar.” At this stage, the firm’s market cap hovered around $12 million – having since grown to more than $2 billion.

Other companies he encountered along the way include Johns Lyng Group (ASX: JLG), Bellamy’s (ASX: BAL), PSC Insurance Group (ASX: PSI) and – most contentious of all at the time – Afterpay (now Block (ASX: SQ2)).

On the last of these, he says the interesting part about the early share registry of Afterpay was not those who invested, but those who didn’t. “A lot of people were not sold on the Afterpay story.”

“But the rest of them, you got a herd mentality. Though, I never felt it was a herd on the basis that ‘we’ve got to be here because everyone else is here’. All the people I dealt with was because they could see the value of the company,” Robertson says.

One of the distinctive parts of Robertson’s approach to broking is the active role he has taken on the boards of many companies over the years. 

One of the examples discussed during the interview is the financial services platform business, HUB24 (ASX: HUB).

As Robertson recalls, the firm was in the early stages of “a terrible mess” with the platform business being part of an overall business he describes as “sub-par.”

“The advice given by a prominent accountant in Sydney was to call in the receivers, it’s all too hard. And thankfully, that advice wasn’t taken,” he says.

The company was then turned around and grew into a business that is now valued at around $3 billion.

Successful board members are temporary

“When things go wrong, if it’s within your power to fix, you should fix,” he says, referring to a board on which he currently serves, that of accounting services firm Credit Clear.

By the same token, Robertson also insists such board roles should only be short-term.

“These people who stay on boards for 10, 15 years, really, it's ridiculous,” Robertson says.

“Success in the first instance is getting it right. The subliminal way that that manifests itself is that stocks do not go up by being supported by one house or one person. What needs to happen for true success is for companies to outgrow people like me.”

During the interview, Robertson is also quizzed about some other as-yet-undiscovered companies currently on his investing radar.

SKS Technologies (ASX: SKS)

A Melbourne-based electrical contracting company, he likes the firm because of its exposure to the electrification thematic: “With all this mad rush to electrify everything, you’ve got to have someone to connect it.”

Another firm he names - one which he hopes will one day list – is Pay.com.au, a frequent-flyer points platform Robertson describes as a premium version of the old Qantas Frequent Flyer program.

“Rather than exchanging your points on Qantas flights or Dyson vacuum cleaners…or crappy wine, with Pay, you can exchange on Qatar, Singapore, Virgin, and Qantas if you want, as well as other things.

“I think it's a great B2B product and I think that that growth, with 3 billion-odd TTV [total transaction value] with only 13,000-odd customers. If you look at the size of the market, Qantas has about 500,000 SME customers. So, it's a big market.”