Wednesday, September 28, 2022

How Mike Cannon-Brookes invests

That sense of urgency is explicit in Cannon-Brookes’ bid for AGL, under which he and Brookfield want to invest to make the company carbon-neutral by 2035 – 10 years earlier than its board was promising under its plan to demerge its renewables from its coal assets.

Cannon-Brookes told the Financial Review on Monday that the consortium had access to up to $20 billion on top of AGL’s purchase price to invest in new renewable power, to replace the coal-fired power plants it plans to close by 2030 (which is up to 15 years earlier than AGL had intended).

Given AGL currently emits more carbon dioxide than Sweden, or every car on Australian roads, Cannon-Brookes claimed he and Brookfield’s plans for AGL would amount to one of the biggest de-carbonisation projects in the world.

However Cannon-Brookes is also a cornerstone investor in what could prove to be an even larger contributor to supplying the planet’s power needs in a renewable way.

In 2019 he grabbed headlines by backing Sun Cable, which has another bold plan to create a massive solar farm in the Northern Territory and transport the energy to Singapore via undersea cable.

Corporate filings indicate Cannon-Brookes controls about 15 per cent of Sun Cable, as does fellow Rich Lister Andrew Forrest, in a project mooted to have an end-value of $30 billion.

How Mike Cannon-Brookes invests

Mike Cannon-Brookes also has an extensive property portfolio, including his Point Piper mansion. Supplied

The billionaire was on Monday talking up his investment in Sun Cable, whose solar array promises 20 gigawatts of power, backed by storage of up to 42 gigawatt hours, as evidence of his experience in the type of big de-carbonisation exercise he wants AGL shareholders to let him take on there.

In reality Sun Cable is just one of several other investments Cannon-Brookes has in the fight against global warming, bankrolled by the sell-downs of Atlassian shares which he and co-founder Scott Farquhar have indulged in almost ever since the $105 billion software- as-a-service giant went public in December 2015.

Going into the NASDAQ float, the founders owned 37.7 per cent apiece of the software maker, having bootstrapped it for the first eight years after launching in what Cannon-Brookes has called the “nuclear winter for tech start-ups” of 2002.

Yet as of the end of 2021, the founders’ respective 55.8 million-share parcels equated to just 28.3 per cent each of Atlassian’s common stock, a sell-down of 2.3 million shares apiece in just the prior year alone.

Given Atlassian has never paid a dividend, these sales are the founders’ main income source beyond their relatively modest salaries as co-chief executives.

Sell-off drives diversification

Atlassian stock touched a record high of $US458 last October, as its software for helping teams collaborated remotely found itself in hot demand during lockdowns and a new world of work-from-home.

Atlassian’s shares might have dipped below $US300 since amid the wider sell-off of tech stocks, but the lucrative sell-down proceeds of 2021 have been used by Cannon-Brookes to, among many other things, become a significant shareholder in ASX-listed Genex.

Cannon-Brookes with co-founder Scott Farquar in 2012.

His CBC Co investment company (which stands for Cannon-Brookes Collective) now owns just over 3 per cent of Genex, which has more than $1 billion in renewable energy generation and storage assets.

On Monday Genex was raising $40 million to support a 1000MWh wind farm and battery project known as Bouldercombe, at Rockhampton in Queensland.

Coincidentally, the supplier of Bouldercombe’s equipment will be Tesla, whose founder Elon Musk was the target of Cannon-Brookes’ first headline-grabbing foray into the climate debate. They teamed up via Twitter in 2017 to build a large battery for South Australia amid the state’s power crisis.

Cannon-Brooke’s family office, Grok Ventures, has since 2017 also been a backer of Brighte, which recently surpassed $1 billion in loan applications for its product which lends to households wishing to install solar panels and batteries.

Brighte was one of the first of many green energy plays which Grok now lists among its portfolio,

Meanwhile last October, Grok-backed Melior, an “impact” investment firm whose strategy is designed to encourage climate change abatement.

“We all have a responsibility to do better. Investors need to consider their impact on the world, which is something Melior is tapping into,” Cannon-Brookes said at the time.

“It’s this kind of epic leadership that drives real change across business.”

Aside from his passion-led direct investments, Cannon-Brookes was fortunate to be an early investor in the funds of Blackbird Ventures, famous as an early backer and huge beneficiary of Canva, the juggernaut for simplified graphic design valued at $55 billion last September.

Cannon-Brookes’ investment in Blackbird funds since 2013, thought to total around $100 million, is now estimated to be worth over $1.3 billion. He has also co-invested directly in some of its success stories, including Canva and driverless car Hopeful Zoox, which was sold to Amazon in 2020.

Tyro hit by COVID-19 fallout

In less good news for the billionaire, his longstanding investment in payments company Tyro fell about $40 million on Monday, after its results revealed more COVID-19 impacts on the profitability of its in-store terminals than investors were expecting.

There is also the small matter of the $250 million-plus property portfolio which Cannon-Brookes has accumulated since 2010, crowned by his Australian record-setting $100 million Point Piper mansion.

Time will tell whether interest rate rises lend a shade of red to the green hue of the billionaire’s portfolio.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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