18 August 2016
Tinker, Tailor…
by J R Thomas
….Soldier, Sailor. Rich Man is the next in that traditional playground chant; though probably not heard so much in modern playgrounds, tinkering and tailoring having pretty much passed on, soldiering not popular, sailors mostly registered to foreign ports. Rich men, though, they continue to fascinate. Last week saw the sadly premature death of a very rich man, Gerald Grosvenor, 6th Duke of Westminster, landlord of large parts of Belgravia and Mayfair, and much else besides. There is nothing like an unexpected and early death to excite the media, especially in the traditional silly season of August when solid news is so hard to come by. The Duke was a distinguished and interesting man, rather old fashioned in his approach to life, and also kindly and generous. But you would have been hard put to know much about Gerald Grosvenor, the man, from what you might have gleaned from the press coverage of his passing.
What set the press alight was the huge amount of Grosvenor family wealth passing to his heirs, accumulated over many centuries but centred around the continued appeal of those central London acres to those seeking the most prestigious of offices, the most exclusive of shops and the most desirable of housing. This is owned by The Grosvenor Estate, effectively a series of companies and partnerships, owned by a number of trusts for the Grosvenor family. The elaborate structure was created after the death of the second Duke in 1951, when (due to some bad tax planning) his successors got landed with an enormous tax bill, which took many years to pay off and was really only managed by the sale of a third of the estate, Pimlico.
That experience brought about a fundamental restructuring of the family holdings and a desire to make sure that, so far as possible, such a disaster to the family wealth should never recur. It also focussed the family mind on a secondary but important consideration: that they were very exposed to political and other risks by having such a concentration of assets in one area, even if that area was central London. The upshot of this thinking (and the appointment of some of the best advisors in the UK) was that a series of family trusts were created which had various members of the family as beneficiaries, including successive Dukes. The Dukes, and indeed the Grosvenors, ceased to be the owners of the family wealth, but received an income from the trusts. And the trustees began a policy of investing outside London, focussing especially on acquiring property in the north-west, where the family had lived for hundreds of years, but also overseas. Initially the overseas investment was into Canada, principally Vancouver, which was identified as a growth hotspot from which the Grosvenor business might benefit by buying property. This worked well, and further investment followed in Paris, in Australia, and especially back at home, in Liverpool. The Duke was very clear, as was his team of employees and advisors, that the way to run a long-term successful business was to stick to what you are good at, work very hard at it, and share that success with the people who contribute to it.
Liverpool and the north west was a particular interest of the 6th Duke; his home was near Chester, and the largest city close to him was Liverpool. He watched the economic and social decline of that former powerful and confident city with great concern, and he quietly supported many local charities to try to bring some help to the city. His children were sent to local state primary schools in Cheshire and then to day schools nearby. As teenagers they were taken around the city at night to understand how the under-privileged existed – and to work out how best to help. He realised, though, that the best way of helping is often not by charity alone, but by creating opportunities. He knew that he could create very large opportunities, and around about the turn of the century Grosvenor (the business), urged on by Grosvenor (the man), began looking at building a major new shopping centre in Liverpool. The aim was a long term rewarding investment for the family trusts, which would create jobs but also draw shoppers back into what had become a tired and declining city centre, and thus reinvigorate both financially and psychologically an area depressed in both senses.
Grosvenor (the business) had of course to be very hard-headed in this and had some doubts for a while as to whether this was a sensible thing to do. But a big advantage of being a private business, where the shareholders have had control for 300 years and more and have no intention of selling out any time in the future, is that investment decisions can look many years forward. Grosvenor decided to build Liverpool One (as it has been named) taking that long-term view – which was just as well, as the 2008 recession hit soon after the construction work started. But eight years later the shopping mall is trading well, its value is comfortably recovered, and much regeneration has taken place in Liverpool on the back of it.
The Liverpool One saga is a good example of how the Duke approached life. He wanted to protect his family wealth. But he also had a great concern for the welfare of his fellow citizens, knew that he had an ability to help others, and pondered, often very deeply, how best to do that. His view of life, one might suspect, was rather Thatcherite – he believed in enterprise, seizing opportunities, redemption through work – but also at a discreet personal level, in generous open-handedness and kindness. One suspects he would have been rather hurt by the obsessive commentary last week on his wealth and, like the modest man he was, not so that his goodness of spirit would be mentioned but rather so that others might be encouraged to follow his example in using their wealth and influence to make the world better for all.
This note on his demise is not intended to be a paean of praise (though he certainly deserves one: a man who left school with 2 O levels but rose entirely on merit in the Territorial Army to be become its Major-General and commander in chief; who recently gave £50m of his personal money to build a new medical facility for the rehabilitation of injured soldiers; who treated his employees and business partners as equals and and had no time for pomposity or snobbery; who was noted for his personal generosity and kindnesses to all levels of people). What would have upset him was that all the comment was about the stacks of money that the Grosvenor family has accumulated, much (in terms of the quantum of that wealth) through modest living and reinvesting even in bad times (in fact, especially in bad times – that’s when bargains can be had). For the Duke, the point was not how much money you have, but how you deploy it, indeed how you deploy all your qualities to make the life of your family and others better. He believed in free enterprise, very much so, but also in gentlemanly behaviour and noblesse oblige. That’s maybe an example for us all to follow, from triple yacht owners to the most humble, even in the twenty first century.
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