21 October 2005 – The Evening Standard
Winning the Olympics for 2012 has given London a patriotic thrill. But who stands to benefit most? Two mysterious billionaires, Simon and David Reuben. Mark Palmer looks at the brothers who are always in the right place at the right time.
Going for gold at the 2012 London Olympics should be no sweat for David and Simon Reuben. In fact, they are virtually assured of a top prize in the sprint to cash in on what will be one of the greatest windfalls in the Games’ long, but not always glorious, fiscal history. No one should be the slightest bit surprised.
The Reuben brothers have had the look of champions for several decades even though few people have had a chance to look at them. They cling tightly to their privacy.
Simon Reuben, who, at 64, is three years younger than his brother David, has given only one interview to a British publication in his entire career, and that was more a case of finding himself in a room with a journalist and having to make polite conversation.
Before that, in 2000, the brothers did agree to speak to Fortune but this ended in a long and expensive legal battle after the US-based magazine made allegations of links with the Russian mafia.
The Reubens began libel proceedings against the publication’s parent company, Time Inc, and the case was due to be heard in a London court last October. Fortune finally agreed an out-of-court settlement with the Reubens and was forced to issue a lengthy clarification.
People might not know much about them but many of the Reubens’ buildings and projects in London and throughout the world enjoy the highest of profiles.
For starters, there’s Millbank Centre, the Labour Party’s former HQ in Westminster; the American Express building on Buckingham Palace Road; a swathe of buildings on Sloane Street, occupied by fashion houses Versace and Roberto Cavalli; Academy House in Sackville Street and Connaught House in Berkeley Square both are office buildings, and the multimillion-pound White City (they have a 25 per cent holding) and Paddington Basin (a 50 per cent share) developments. They are investors rather than landlords. If they hold on to a building, they always outsource the management of it to a third party, normally a company called Motcomb Estates, which was set up in 1991 specifically to handle the Reubens’ property investments.
Motcomb Estates is run by Robin Turner, a businessman who has known the Reubens since 1965 and is said to be Simon’s primary confidant there. Simon’s daughter Lisa works at Motcomb Estates and is closely involved in her father’s business dealings with the firm. ‘My mood is very dependent on my daughter. If she’s happy, I’m happy. If she’s sad, I’m sad,’ Simon has said.
‘No one externally appears to be sure who does what at Motcomb,’ says one associate. Others have said: ‘You can’t get a decision out of anyone except Simon. And if something’s within his focus you’ll get hold of him. If not, you don’t have a cat in hell’s chance.’
Overseas, they have invested in the Lloyd’s Bank headquarters in Monaco and have a 49 per cent stake in the Gibraltar East Bay project. This is the biggest and most adventurous development in Gibraltar’s history. It comprises more than six million square feet of apartments, shops, a hotel and a huge marina. This project has brought them into close collaboration with Lord Foster who is designing it with ‘zeal and enthusiasm’. They have also acquired a number of shopping centres and pubs in both Ireland and Scotland.
They have worked closely with Elliot Bernerd, and Robert Tchenguiz finds the brothers tempting business partners. ‘They’re great at what they do. They’re very professional, hardworking people,’ he reports.
But ever since London received the nod in July, it’s their links with London’s Olympic plans that have brought them into clearer focus. Not for the first time, the Reubens found themselves in the right place at the right time. In a joint deal with Multiplex, the Australian construction giant currently working on Wembley Stadium, the brothers have a 50 per cent stake in the £4.5 billion Stratford City project, where many of the 17,000 athletes will be billeted during the Olympics.
The site amounts to 180 acres around Stratford International railway station, which is on the new Channel Tunnel Rail Link. In addition to housing, the project will include more than two million square feet of shops and leisure facilities and a further five million square feet of offices.
Never mind the Games themselves, the area is likely to play host to a spectacular property bonanza once the athletes have packed their bags.
Already, house prices in the Olympic areas of East and South East London have risen by between three and four per cent, compared with a 1.8 per cent fall in West London, and Stratford City is expected to create as many as 30,000 jobs.
Hotels, a health and primary care centre, a library, school nurseries, youth clubs and an employment bureau also form part of the plan.
The Reubens have two choices.
They either stick with Stratford City long-term or they cash in well before 2012. But it’s this uncertainty amid rumours of tension between the joint investors that is beginning to irritate Ken Livingstone. The other 50 per cent stake is controlled by Westfield, the Australian shopping centre specialists, and by Stanhope, a private property company chaired by Sir Stuart Lipton.
Two weeks ago, Livingstone met with the chairman of Westfield, Frank Lowy, to voice his fears about the power struggles among the various consortiums.
A spokesman for the Mayor’s office declined to comment, but a source at London & Continental Railways (LCR), which owns the Stratford City site, confirmed that the meeting had taken place and that Livingstone had registered his fears.
There is no love lost between Multiplex and the Reuben brothers, with their respective advisers and public relations executives openly briefing against each other. Tensions have been exacerbated by suggestions that one or both parties are considering trading in their chips already although this is denied by the companies themselves. In July, it was reported that a consortium of Saudi Arabian billionaire businessmen was lining up a bid put together by an offshore company called Saifnoor.
‘All we can say at this point is that it’s very early days in the project,’ said a spokesman for Multiplex. ‘It’s a fluid situation, with a lot of people circling around. It could be a sound business decision to sell at that stage and realise a profit rather than waiting for up to 15 years for a financial-return.’
A spokesman for the Reubens said: ‘There is no plan to sell. Why would they want to get out before the development has taken place?’ But Simon Reuben was quoted as saying last year: ‘Maybe it is something to do with my age, but I look at things which are pretty short-term.’
One source close to the Stratford City development said that there were ‘dozens of imponderables but the one absolute certainty was that the Reuben brothers will walk away with a handsome profit, whether it’s in the near or distant future’. Describing them as ‘ assetstrippers of the most ruthless kind’, he said their whole modus operandi was to ‘buy into something and then sell at the optimum moment’.
Which is pretty much par for the course in big business. And the Reubens are pretty good at big business. Certainly, they have come a long way since arriving here from India in the Fifties.
They are currently ranked ninth in The Sunday Times Rich List, with an estimated fortune of £2.5 billion. The brothers are also co-trustees of The Reuben Foundation, a charitable trust they set up with an initial endowment of $100 million, aimed mainly at supporting healthcare and education.
They have been big supporters of both The Prince’s Trust and the Royal Marsden Hospital, in addition to a number of Jewish charities.
‘I don’t really like property, I just like the deals because they are easy,’ said Simon Reuben in the interview which wasn’t meant to be an interview in The Times.
‘I buy properties in areas I like and buy things I believe represent value for money. I don’t look at the rental income, I just consider how much I am paying per square foot and what the return will be at the end.’ The brothers were born in Bombay and raised by their Iraqi-Jewish mother, Nancy, and their grandmother. It has been reported that their parents separated but a spokesman would neither confirm nor deny this because he ‘really did not know’. Their father, David, was a textile merchant. On moving to London, they lived in Islington, where they went to a local school, but neither of them completed a formal education. Simon Reuben dropped out of several degree courses, including one in chartered accountancy, after six months. ‘It was boring,’ he explained later. Now he feels he would have preferred to have studied history or literature.
In 1958, aged only 17, David joined Mount Star Metals, a UK-based scrap metals business which brought him into contact with the Soviet Union, China and North Korea. During the Seventies, he joined Trans-Continental, a subsidiary of Metal Traders Inc, which eventually led to him joining forces with his younger brother. Simon, meanwhile, had immersed himself in the carpet business and ultimately bought J Holdsworth & Co, England’s oldest carpet company. He acquired it from the receiver and within five years had made enough money to begin investing in property. One of his first purchases was the old Pheasantry site on the King’s Road now a Pizza Express and several shops in Walton Street. Much of the brothers’ early fortune came from dealings with Russia via their company Trans-World. They traded in non-ferrous metals, specialising in aluminium and tin out of London and copper and tin out of New York. The key was spotting the importance of aluminium, which, at that time, was not traded on the London Metal Exchange.
Trans-World acted as the physical metals futures market and by 1984 the company was worth in excess of $20 million.
At the end of 1991, Trans-World teamed up with a Russian businessman, Lev Chernoy, and began investing massively in Russia’s aluminium industry. At one point they were dubbed the ‘metal tsars’ as they bought up large sections of the newly privatised aluminium industry following the collapse of Communism.
By 1995, the company had a turnover of nearly $7 billion and accounted for five per cent of the world’s aluminium production.
When the business climate in Russia began to sour towards the end of the Nineties and President Putin’s regime began to flex its restrictive muscles, David Reuben took out a full-page advertisement in The Wall Street Journal.
The headline read: ‘Foreign investment in Russia in peril.’ And it concluded: ‘How American and Russian officials respond to this strong-arm threat will have long-term consequences impacting both the political and economic stability of Russia, as well as that nation’s economic relationship with capable long-term investors from around the world.’ Finally, in 2000, Trans-World sold its metals interests in Russia to the oil conglomerate, Sibneft, which was controlled by Chelsea Football Club owner Roman Abramovich.
Then, earlier this year, the brothers settled a £159 million wrangle with Oleg Deripaska, one of Abramovich’s former business partners, over a disputed aluminium trading venture.
Today, David lives mainly in Kensington with his British wife, Debra. It’s not a lavish house more understated good taste, according to someone who has seen it. They have three children, two boys and a girl. Their eldest son, David, also works in property with a firm called Colliers CRE.
Simon used to live in Los Angeles but left America after being diagnosed with cancer he has since recovered.
He is based in Monaco now, with an elegant flat in Knightsbridge. He and his English wife, Joyce, live very quietly: ‘The way I live, I only need one per cent of my assets. But working is part of my life blood,’ he has said.
His wife, on the contrary, is a ‘courses freak.
You name it, she’s done it: courses in music; literature; understanding 9/11; understanding Islam.
‘I could just put my money in the bank, but I like to look at ways to raise my income, otherwise I feel that I am not being a good manager,’ said Simon.
‘Life can be very difficult for me. I avoid most people. In my early years I went out and got all the best tables at restaurants. I had fast cars and did all that.
‘I’m a bohemian in a way. I hate trendy places,’ continued Simon.
‘Often I like just sitting and thinking, doing simple things like having a coffee. I have a very low concentration threshold. Even on a deal I can only read one document at a time.’ His life, he revealed, is ‘focused on my daughter and my brother’s children. I am very close to my family, I only married once and I have only one daughter.’ Their friends and business associates speak of their generosity (‘They’re “very Middle Eastern” it’s all: “Come, come. Eat,” lunch, dinner’) mingled with a shrewd eye for a deal.
One friend, who spends time with Simon at the Isle de France hotel in St Barths, said they are ‘trustworthy and really rather shy’. And an executive who works closely with them said: ‘People often say that they are secretive but it’s more a case of being very private. They are just not ostentatious people. David is the trader and Simon is the investor. They work brilliantly together. They are quite different. For example, David is a technophile and loves gadgets, while Simon is completely the opposite. But I have been with them when they finish sentences for each other. In a business sense, they are incredibly smart and have a reputation for never having overpaid for anything.’
However, they do keep up a certain style: they have only just sold a 180ft, $22 million yacht called True Blue which was moored in St Tropez.
When asked to invest in certain projects even when it’s a relatively small sum Simon Reuben has been known to declare: ‘What do you think I am? Made of money?’ And on the rare occasions when they have given a party, guests have left perplexed. One such bash at their villa in the South of France left nothing to chance. It was held in honour of the MIPIM property fair and should have been an opportunity for players in the brothers’ industry to get to know them. The white villa, in the hills just outside Cannes, played host to hundreds of guests who got through a security cordon and followed a candlelit path to the terrace.
The sushi and vintage champagne were firstrate, and everyone waited anxiously for the hosts to show up.
There was only one drawback. David declined to appear, and Simon turned up, did one turn of the room and vanished again, leaving the brothers’ elusive reputation intact.