Gene Tilbrook finds himself in a unique position in corporate Australia. As executive director of business development at Wesfarmers Ltd., Tilbrook runs the largest such team in the country and is at the center of dealmaking at Australia's only surviving conglomerate.

Wesfarmers has six distinct business units: hardware, insurance, energy, industrial supplies, chemicals and fertilizers and rail transport. All were accumulated or established since Wesfarmers' initial public offering on the Australian Stock Exchange in 1984 - a turning point for the Perth, Western Australia-based company, which began as a farmers' cooperative in 1914.

"It's a bit like a giant private equity group in that we are absolutely focused on shareholder returns," Tilbrook says. "But rather than buy, build and then sell, what we do is buy and build and generate cash flows."

Tilbrook, 53, might seem to be at the former farmers' co-op by dint of his background, since he grew up on a sheep and wheat farm 250 kilometers east of Perth. But it is his fascination with computers (which he studied at university) and his expertise in financial modeling that have shaped his career, and to a large extent the destiny of Wesfarmers, since he joined the company in 1985.

Tilbrook was the first member of a business development team that was established under the tutelage of then-finance director and current managing director Michael Chaney. Apart from a stint in the energy division in the 1990s, Tilbrook has been with the unit since its inception. "I've been doing the same job for the past 20 years," Tilbrook jokes. "I just get a different title every couple of years." The latest title to add to his collection will be finance director, a post he will assume in July, when Chaney retires, and Richard Goyder, also a former head of the business development unit, moves into the top job.

The business development unit now boasts a staff of 15. Chaney has described it as an in-house investment bank, giving the group the capacity and flexibility to analyze a huge number of opportunities, and its staff as "corporate ambassadors," spreading the word of financial discipline throughout the group.

More than that, Tilbrook says, the unit is the hub of the business. It keeps in contact with all divisions and is consulted on matters relating to M&A opportunities and any capital investment of more than A$5 million ($4 million), as well as tariff, supply contract and regulatory issues. "We make sure we are always accessible," he says. "We're like the glue that keeps the group together."

That in itself has been a considerable achievement. While all other large Australian conglomerates fell out of favor, Wesfarmers has prospered and delivered some of the best returns for any company over the past decade.

The group sets itself high hurdles. Tilbrook, who sees "100 or so" opportunities each year, says the minimum target in any deal is a 20% return on capital. Sometimes Wesfarmers does a lot better than that. Tilbrook led the team that analyzed and recommended the purchase of the Curragh coal mine in the state of Queensland in 2000. It cost A$200 million and will generate more than that in profit in fiscal 2005 alone.

Until recently, Wesfarmers had been viewed as a skilled accumulator of assets rather than a seller. It stunned observers in 2003, when it announced the sale of its founding business, the rural services division, to AWB Ltd. for A$850 million. "People always asked us if someone offered us enough money, would we sell? People couldn't believe we'd do it," Tilbrook says.

Wesfarmers is also unique among Australian industrial groups in that it has a 50% interest in private equity firm Gresham Partners Holdings Ltd. and has been a 50% investor in Gresham's two unlisted funds. Tilbrook says the cross-pollination might have been less than anticipated, but his unit has still gained insight into a different approach to investment and structuring transactions.

"PE is at the cutting edge," he says. "We do not want to be quite at that point, but understanding it helps us do things a better way." - Giles Parkinson

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