As another Boxing Day approaches, the Oatleys, Bob and Sandy, and their team, are preparing for a tenth Sydney to Hobart yacht race in their legendary 100-foot boat Wild Oats XI. This year they’ll be going for a record eighth win.
It won’t be easy. This year there’ll be six 100-footers racing down Australia’s east coast, the largest fleet of maxis ever to enter the race; if the 85-year-old Bob Oatley’s boat wins again, it will truly be the crowning achievement of a remarkably successful life.
But here’s the thing about the Oatley family business: it is a true partnership between father and son. Bob is obviously the patriarch, but Sandy, now 62, has been there every step of the way, although he’s been a kind of silent partner.
Do the words “succession” and “inheritance” even mean anything when the father and son did it all together?
Robert Oatley started out working as an office boy for a New Guinea trading firm named Colyer and Watson. In his early 20s, he persuaded the firm to start selling raw coffee beans from PNG to roasters around the world and then in the mid-50s, aged 25, he managed to buy that business from his employer.
Sandy was born in 1952. His early life involved working in the coffee business and when his father sold it to the PNG Government in the late 1960s as independence approached, Sandy helped plant the grapevines that became Rosemount Wines.
With the money from the coffee business, the family had bought a grazing property in the Upper Hunter Valley and planted the Shiraz cuttings out of the back of the Holden Kingswood.
They never intended to have a winery -- just grow grapes and sell them. But after a few years they changed their minds and built a winery, and then cooked up the first vintage themselves in 1972. Next year, they hired an actual winemaker (presumably having tasted their own effort) and in 1975 produced their first commercial vintage.
Sandy was then 23 and working full time in the business with his father. Together they grew it quickly, buying more vineyards in the area and planting chardonnay in the late 70s.
It was enormously successful and in 2001 the Oatleys famously sold Rosemount to Southcorp for $1.5 billion, including a 20 per cent stake in Southcorp, which was later sold to Fosters for another $600 million.
At that point Bob was 73 and Sandy was 49, and neither of them was ready to retire -- especially Sandy.
In 2003, they heard that the seven managers of Keith Williams’ island resort in the Whitsundays -- Hamilton Island -- were trying to mount a management buyout. They started crunching the numbers and then the MBO fell apart, so the Oatleys became the only bidder in what was essentially a fire sale, and picked it up for $200 million.
Since they have spent $350 million fixing the place up, including building a luxury resort called Qualia on the end of the island. Most of the other Whitsundays resorts are struggling, with three of them -- Daydream, South Molle and Lindeman -- currently on the market, while Hamilton, according to Sandy Oatley, is very profitable -- helped by the fact that it has an airport. But he’s not interested in buying the others.
The Oatleys are also back in the wine business. The family kept a small vineyard near Mudgee out of the Southcorp sale and, once their five-year non-compete was up, they bought another winery to go with the vineyard.
The label says Robert Oatley Wines, but these days Sandy runs the business, he’s chairman of both the island and the winery.
The family company, Balmoral Operations, also owns a lot of investments and has a big property division that develops apartments and land subdivisions, Sandy’s brother Ian runs that.
A third generation of Oatleys is fully now immersed in the business: one of Sandy’s two daughters, Nicki, is brand manager at Hamilton Island; Ian’s son James works in the art department at the island and the son of Robert’s daughter Ros -- named Robert after his grandfather -- is in the investment team.
So, the Oatley family business has been reborn as a resort and wine operation with three generations in it instead of two.
Oh, and of course, there’s yacht racing as well. But that’s just an expensive hobby, one that this family can well afford.