Billionaires Hunt Real Estate Bargains, Boost Equity Allocations
Leaders Magazine Summer Issue 2003
EDITORS’ NOTE After starting his career at Mount Star Metals, a U.K-based scrap-metals business, Reuben joined Trans-Continental, a subsidiary of Metal Traders Inc. In 1977 he left that firm and formed Trans-World Group, and in 1986, along with his brother, Simon, he restructured the firm, bought out his partners, and took control of the business. In 2000 the brothers wound down Trans-World’s operations to sharpen their focus on Reuben Brothers’ activities.
COMPANY BRIEF Headquartered in London, Reuben Brothers is a prestigious portfolio of properties, tangible businesses, and substantial cash reserves operated by David and Simon Reuben, who have been building their entrepreneurial venture since the 1960s. The firm’s real estate assets, which are primarily located within the European Union, are held within its Property Group, while its liquid assets, which are deposited with world-class financial institutions in Europe and North America, are held by its Financial Group.
Having sold Trans-World’s Russian interest, what’s your focus now?
Our experience in Russia typifies what we’ve tried to do throughout our business life: get in at the right time and get out at the right time. Although we’d been dealing with Russia before, we made our most significant investments there in the early ’90’s. By the end of the ’90s, we thought we’d built as much of a business as our skills would allow, so it was time to move on. We succeeded in selling our businesses at a good time, so we were in a strong cash position, as we still are today. Fortunately, this has come about at a time when a number of assets are relatively cheap, so we hope to invest wisely and profitably once again. Right now, property is one of our key areas of interest, as is technology.
You were involved in the bidding for the U.K retail group Selfridges. How did that come about?
Selfridges is a wonderful group that owns one of the most desirable retail properties in London, the Selfridges store on Oxford Street. It fit perfectly with one of our investment policies of looking at businesses that have an asset base – particularly a property asset base. The group came to our attention because the Scottish retail entrepreneur Tom Hunter made a bid for it, and we expressed an interest in the group as well. In the end, we teamed up with Tom Hunter and submitted a joint bid. At the end of the day, however, we were pipped at the post by Galen Weston of Canada; it was a close call. As it turned out, the greatest thing that came out of the Selfridges story was teaming up with Tom Hunter and his team at NM Rothschild. They were a pleasure to do business with.
What other deals have you been involved with recently?
Our main focus has been on building our property portfolio in London’s West End and Victoria areas. We now have about 100 properties there, although our most high-profile acquisition was the Millbank Tower, home to Tony Blair’s Labour Party during its 1997 general election win. It’s the property people seem to remember us by the most. But our activities aren’t limited to British properties.
For example, we’ve recently helped finance the purchase of 52 percent of Ermewa, which is the commercial arm of the French railway company SNCF. Plus, with major global banks, we’re discussing investment opportunities in businesses in Britain, Europe, and the United States.
You don’t appear to have had your fingers burned in the dot-com boom and bust, but you now say that technology is a focus for you.
There were crazy things happening during the dot-com boom, and we had almost no exposure to it. But the crash doesn’t negate a fundamental economic reality: that the right technology correctly applied will continue to drive productivity and growth and, as such, presents valuable investment opportunities. But is has to be the right technology at the right price.
I’m personally fascinated by technology. I’ve been investing heavily in this area for some time, and in particular a groundbreaking software program that I hope will come to fruition very soon. I think now is a good time to invest in IT and technology in general. The silliness has been removed from the sector, and there are some fascinating things happening. For this reason, I’m sure it will come back as an investment sector.
You’ve also established a charitable foundation.
That’s right. The Reuben Foundation has been established with a significant endowment, and the proceeds of that investment will be spent on charitable activities. The main areas we’re going to focus on for spending are health care and education, where immediate and lasting differences can be made for those who are suffering or deprived.
How has your business philosophy evolved over the past 40 years?
I don’t think it has changed a great deal. Nevertheless, I’ve become more convinced of some of my basic business tenets. First, always behave honorably with those you’re doing business with.
Second, be prepared to go where no one else is going because, if you get it right, this is where the most money can be made. Of course, this takes judgment, risk-taking, and decisiveness, but these are qualities that can give you an edge against some of the bigger multinational companies.
Finally, when you see an opportunity, grasp it. Good opportunities come along so rarely that you can’t afford to let them go. In part, you have to create your own opportunities and that’s what we intend to you.
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