Santow was Gonski’s first mentor, inviting him to become a summer clerk at law firm Freehills, where Santow was a senior partner. Gonski became a solicitor at Freehills in 1977 and a partner at only 25.
Married to a South African, Kim Santow was a powerful figure in the South African networks of Australia in the 1980s, a time when highly qualified Jewish South African lawyers were populating major Australian law firms, most notably Freehills.
This influence of the South African legal community, once dubbed “the Springbucks”, has now spread into the wider business community, giving Gonski another network of support.
At Freehills, Gonski worked on mergers and acquisitions, advising such companies as Westfield Holdings, a client he brought to the firm along with Santow. Gonski became a Westfield director in 1985.
Media connections followed; he became friendly at Freehills with Richard Longes, who was advising Kerry Stokes on his media interests while Gonski himself was advising Kerry Packer on the privatisation of his Consolidated Press.
But for Gonski, the law was not enough. As Santow has noted, he enjoyed the financial side of law transactions more than the legal side, and quit Freehills in 1986 to establish, with Longes, the investment bank Wentworth Associates – the name inspired by the street where Gonski then lived, in Point Piper.
Westfield Holdings’ chairman Frank Lowy has said it was Gonski’s idea in 1986 to form a new capital-raising and investment vehicle, Westfield Capital Corporation, and Gonski became its managing director. WCC had stakes in ACI, Coles Myer, Bridge Oil and Northern Star, owner of the Ten Network.
Ten proved to be a disaster, leading to the wipe-out of WCC that lost $303 million in 1988-89. WCC’s foray into TV was damaging for Lowy’s reputation. He admitted it was the biggest mistake in Westfield’s 30-year history.
Since the bad old Ten days, Gonski has never been far from the top men in the media, among them Rupert Murdoch and Conrad Black, who asked him to advise the Tourang consortium when it bid for John Fairfax Holdings in 1991. Two years later, he became a director of Fairfax.
With those kinds of connections, one thing was missing: the glossy outside interests that Gonski labels, in financier speak, “the not-for-profits”.
These boards appear to have a revolving-door policy of mates. In 1991, when Gonski retired from the St Vincent’s Hospital board, for example, he was replaced by Kim Santow. Five years ago, Gonski replaced Frank Lowy as chairman of trustees of the Art Gallery of NSW, where Santow had also been a trustee.
His “not for profits” began in 1987, when Gonski became chairman of Film Australia, a natural progression from his Freehills’ days when he advised Joe Skrzynski, the former chief executive of the Australian Film Commission. Six years ago, Gonski conducted a review into Commonwealth assistance to the Australian film industry and came into the orbit of the Australia Council in 1999, when he became a member of the Federal Government’s inquiry into the major arts organisations of Australia – the Nugent Review. It was chaired by Dr Helen Nugent, formerly chairwoman of the Australia Council’s Major Organisations Fund and now deputy chairwoman of the Australia Council.
A year ago, the partners of Wentworth Associates – Gonski, Longes and Levy – sold their business to the South African financial services group, Investec, but Gonski says he is staying on indefinitely with the boutique firm as chairman. He has, however, just quit as chairman of another much larger investment bank, Morgan Stanley, but remained a consultant.
Tune into part 3 on Wednesday to read about DG is up to these days.