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U.K. politicians should be wary of seeking Stephen Lansdown’s backing for their election campaigns.
The co-founder of financial-services firm Hargreaves Lansdown Plc is exasperated about Britain’s delayed departure from the European Union. If he had his way, Prime Minister Boris Johnson, Labour Party leader Jeremy Corbyn and the country’s other lawmakers would be ousted from their jobs. With the U.K. poised for a third election in four years to try and break the Brexit deadlock, Lansdown may get some of what he wishes.
“It’s such a farce,” he said of the U.K.’s faltering efforts to leave the EU. “We should have been able to deal with Brexit. We should never have got ourselves into this position.”
Still, the U.K.’s political gridlock hasn’t hurt Lansdown financially. He’s sold more than $500 million of stock in Hargreaves Lansdown since the nation voted to leave the EU in 2016, according to the Bloomberg Billionaires Index. Moreover, he’s pocketed that cash tax-free after moving a decade ago to Guernsey, the British crown dependency that doesn’t apply levies on capital gains. His remaining stake in Bristol, England-based Hargreaves Lansdown is worth about $1 billion.
Bloomberg spoke with Lansdown, 67, last month, ahead of his appearance at an event highlighting research from trade group Guernsey Finance on wealthy families and sustainable investing. The billionaire, who left Hargreaves Lansdown’s board in 2012, declined to discuss Neil Woodford, the U.K. fund manager who received backing from Hargreaves Lansdown for his now-collapsed investment firm. Comments have been edited and condensed.
When did you set up your family office?
After we moved to Guernsey, I started managing my own portfolio from home. After the second or third consecutive day of my wife and I being in the house all day, I realized that was more her domain, so I found a desk in an office to use and we’ve grown it from there. It was fun for about five minutes to manage everything myself after going from Hargreaves Lansdown, where everything was done for me, but then you realize all the little things you’re doing are a bit tedious.
We’ve now got a team of about half-dozen in a bigger office. I still lead on what we should be investing in. Pula -- the name of my family office, meaning “rain” in Botswana’s national language -- has interests in sport, aviation, unquoted businesses that include my sustainable portfolio, and land and lodges in southern Africa. Separate teams run the outside businesses.
Did you grow up wanting to be super rich?
Going through school, I didn’t ever imagine I was going to be where I am now. When we started Hargreaves Lansdown, we wanted to be a success, to earn a good living and look after our family, but did we ever think it would be as successful? No. We got it right from not incurring any debt, so we paid our bills as we went. We didn’t take any money out of the business either for the first 10 years -- which people don’t believe. We only took out just enough to live off. Eventually, the opportunity to float the business gave me an opportunity to step back and do other things.
How involved are you in Pula’s investments?
When I started, I wanted to be fully involved. But I’ve learned I can contribute better by challenging and guiding, and I don’t get involved as much anymore. If you get emotionally involved in a company, you perhaps don’t make the right decisions, particularly if your life and soul doesn’t depend on it. When we started Hargreaves Lansdown, it had to work. We had nothing else, so we really focused on it. But when you’re investing into different pockets, you can’t look after all of them. You need a good team around you to take on responsibilities.
What’s your view on U.K. politics?
It’s such a farce. I know that is a generalization, and some of them are probably quite good, but you look at all the political parties and politicians and you wouldn’t give any of them a job. They are just looking after themselves all the time or their party and not doing their job. I just wonder really if there’s some way the country could call an annual general meeting and sack them all.
I was in favor of Brexit. That aside, we need to get on with things. Whatever the situation, there will be entrepreneurs and people in the country that don’t do so well. But people need the opportunity to be able to get going, and politically it’s just been a stalemate. That’s highlighted how poor our politicians are, and also how poor our civil service is probably. We should have been able to deal with Brexit. We should never have got ourselves into this position.
How do your sustainable investments compare?
I’ve made sustainable investments for about 10 years now, and I’ve had good returns on a couple. Unlike buying a share on the stock exchange where you can see what happens minute-by-minute, it tends to be a project you’re investing in -- a wind farm or a water purification system -- and it takes a long time to get to the market. If I look to make 10% to 15% per year over a long period of time on sustainable investments, that would be very good. I’ve now got almost 10% of my portfolio in sustainable investments. Could it be higher? Probably.
How do you balance sustainability with your private jet?
The private jet is my downside in sustainability, but I’m looking to calculate how much carbon dioxide we’re burning and then offset it. As long as there’s a major positive in that way, I think your conscience can be clear, and I think you’re going to see more and more people taking that route.
How involved are your children with your family office?
My son runs our sport group in Bristol and my daughter is very involved in what we do in Africa. Until now, they’ve been on the fringes. Everything is going to be theirs eventually, so it makes sense they’re involved. What we do and where we focus our investments are decisions we will take together on an ongoing basis.
What are your future plans?
I will always carry on investing. I love looking at businesses. I will always meddle, which is not a great thing to say but I think it’s inevitable I will take some interest. My main role in Pula’s portfolio is to focus where I think the best areas are going forward and be more like a chairman. I’m really focused on our work in Africa. That’s taking up more and more of my time.
What’s life like in Guernsey?
Guernsey gives me security, good governance and also the political situation is stable -- a premium these days. There’s no capital gains tax, too, and that has allowed me to sell down my holding of Hargreaves Lansdown shares -- from about 28% when I left to 9% today -- and reinvest in sports, Africa and Guernsey businesses. Sometimes you don’t invest due to the tax position, but I can always make a decision without worrying about it. That’s the real joy.
(Updates with details on Neil Woodford in fifth paragraph, comments on future plans in penultimate.)
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