My Money — Nick Leslau, property investor
Nick Leslau, 56, is one of the UK’s most successful property investors. Thirty years ago, he became the youngest chief executive of a listed company, Burford Estate & Property, and has since ridden out several property cycles to amass an estimated fortune of £200m, according to the Sunday Times Rich List.
He is the chairman of Prestbury, the investment adviser and 30 per cent shareholder in the Secure Income Reit, a £500m property company that listed last year and owns assets including Thorpe Park, Alton Towers and Warwick Castle. He is also a director and co-owner of Saracens rugby club. In 2010, he gave £425,000 to charity after appearing on Channel 4’s The Secret Millionaire and working undercover as a social worker in Glasgow.
Married to Maxine for nearly 30 years, he lives in London and has three sons, aged 17, 23 and 26.
I still pinch myself. When I sit on our plane or boat I go “wow”. It’s a good feeling. I grew up in Cricklewood, north London, and was the middle of three children. My dad had a jeweller’s shop, but my parents divorced when I was young. My grandfather effectively sponsored us to go to private school. I was always conscious that a lot of kids had new football boots, whereas I had hand-me-downs — I’m sure that slightly awkward insecurity has been a driver.
Before I went to university, my first job was filling shelves in our local corner store in Belsize Park. Within six months, the owner Chris Simpson had promoted me to joint manager. He was my first mentor. I knew nothing, but had this huge curiosity and loved trying new things. What excited me was finding special deals with suppliers, stuff we could earn bigger margins on. If the wine wholesalers were coming in, I’d say: “Have you got a special on?”, cut a deal to buy more cases and put it in a bin at the front. Getting people to part with their money, and finding out what people responded to was what fascinated me.
I dropped out of university after a couple of terms. Studying German was never going to do it for me. As a student, I had a business selling umbrellas at markets, and a video extras side line. It was the early 1980s — MTV had just launched and it suddenly became de rigueur to have a pop video. They constantly needed extras — we did them for Elton John, Madness, Level 42 . . . I told my three sons the other day that I was in the original video for I Love Rock n’ Roll by Joan Jett and the Blackhearts and they fell about laughing. I wasn’t really interested in property, but it was drilled into me that I had to get a degree, so I ended up studying estate management.
Being the youngest chief executive of a listed company didn’t really mean anything at the time. I was a junior partner at Burford, which floated on the Unlisted Securities Market in 1985 for £8m. It was sold to Nigel Wray 18 months later for £56m, and he made me chief executive. We spent the next decade growing it into a £1bn business, which was where the fun really started for me. Nigel was a very powerful influence. Aged 24, I wouldn’t have known a rights issue from a wrong issue.
Never confuse a bull market with a genius. We made so many mistakes in the 1980s, but the bull market carried us through. I learnt so much — I was a lucky bugger, because if I had done half of those things in a bear market, it would have been commercially fatal. At the turn of the decade, we decided the market was too frothy and liquidated all our holdings. We were a year too early. But then the market crashed. In the space of a year, we went from looking quite foolish to looking quite clever. Then in the early 1990s, we were able to clean up.
There are a lot of similarities between intellectual property and actual property. I knew nothing about publishing, but through meeting Enid Blyton’s grandson-in-law, we did a deal to buy the rights to 600 of her books, and all the rights to Noddy. Owning a freehold is like owning a copyright. You sell a licence to other people to make Noddy bath soaps and slippers for a set period, and just like when a lease ends, you get the property back.
One of my most memorable deals was with Ian Schrager. The man behind legendary nightclub Studio 24, he was a pioneer of the boutique hotel movement in New York, opening Morgans and the Paramount. I received a call from him: “I want to open hotels in London — do you want to talk to me?” We formed a joint venture and both sides put up half the money to open The Sanderson and St Martin’s Lane hotels. He was a lawyer by training — a great character with some amazing stories to tell.
You should never allow too much of the success of your business to depend on one event. We did a huge refurbishment of the Trocadero in Piccadilly in 1996, and leased it to Sega to make the world’s first indoor virtual reality theme park. They were on a deal where the rent was a percentage of the turnover. The night of the opening was an A-list event, but after an hour, I was looking at the rides and my heart just sank. Over 100 people were queueing for one of them, but the most they could handle was 40 people per hour. I went home utterly depressed, knowing the headlines the next morning were going to be shocking — and they were. My goodness, it was painful. But we did eventually sell the property and made money on it.
I do believe that what goes around, comes around. As I get older I see it more and more.
I don’t think the UK property market is going to fall off a cliff, but the market may not be well positioned to deal with any surprises. If there are, they will come from the bond market and the prime property market is directly correlated. People say there’s a lot of capital chasing commercial property, but if bond yields went out dramatically — which is not fantasy — a lot of money could easily be re-diverted. We’ve sold £2bn worth of property in the past year or so. [Among other disposals, Mr Leslau and business partner Mike Brown sold listed vehicle Max Property in a £448m deal last year, and the freehold to Madame Tussauds for £332m in May]. The Secure Income Reit targets very long-term secure income, and the portfolio performed beautifully through the last crisis. We hope to grow and develop that, and we’re separately. We’re keeping our powder dry for more conventional short-term assets if the fissures in the market start to appear.
I am culturally Jewish. It feels very comforting to do Friday night dinners with my wife and the kids — there’s a lot of food involved in the Jewish religion — and I’m proud of the cultural history.
We moved out of Mayfair as we felt there was no longer a heartbeat. We had a beautiful house on Upper Brook Street with a garden and pool, and Maxine, my style guru, did it up breathtakingly. At first we loved living in town, but then a lot of houses were sold for huge amounts of money. They were always dark, and you only ever saw the staff coming and going. It was great having Selfridges as your corner store and fantastic restaurants on your doorstep, but we weren’t really feeling like we were in a community, so we upped sticks two and a half years ago, and moved to Primrose Hill. At the end of the day, I’m a north London boy and Maxine, even though she is from Kentucky, is totally at home here and we couldn’t be happier.
What happened with Knutsford was lunacy. Four of us stuck £5m in a cash shell for Archie Norman to find a retail business to get his teeth into. It was the dotcom bubble, there were rumours we were going to buy Sainsbury’s or M&S and the market cap got to £2bn in a matter of weeks. We put out two announcements saying “We know of no reason why the share price is doing what it’s doing”. None of my partners, or I, sold any shares.
I don’t have a wealth manager. I have a wide spread of investments. Aside from my property companies, I invest in small businesses. The attraction is diversity, but sometimes more in terms of my interests rather than financially. Some I invest in with Nigel corporately; on the smaller ones I do personally, EIS [a tax relief] is hugely attractive.
I wish this government did more to penalise short-termism through the tax system. It can’t be right that I could short a stock, make a huge amount of money without employing anyone or benefiting society, and probably have the money offshore. Why should someone who has employed 100 people, risked their own capital for 10 years and created a huge amount of benefit and wealth for society in general pay the same rate of tax?
I’ve seen real poverty abroad, but until I did The Secret Millionaire I never realised there was such deprivation in east Glasgow. Male life expectancy in the area we filmed the programme was around 52 years — lower than Kolkata in India. Very sadly, more than half of the people who I worked with have since died, including Ronnie Rodden, the founder of the disability charity that I financed and Andrew, the young blind man with whom I shared such an intense experience. It’s truly tragic.
When you have kids, what you want more than anything is to give them a roof over their heads. It’s the most important legacy. Theoretically with a paid-for roof over your head your future should be secure.
When you die, all you have is your honour and your good name. Be tough in business, but be totally honest and have integrity. That’s more important to me as my legacy than dying a billionaire.