An Interview with Natie Kirsh

Natie Kirsh
Natie Kirsh

17th November 2015

Natie Kirsh is a multi-billionaire who has made his money mainly through property. Ranked as one of the five hundred most wealthy people in the world, he owns property and businesses all around the globe.

Q: What do you think the benefits of investing in property are?
A: Property is a broad term. It can be divided into three parts: residential property, commercial and industrial property, and retail property. One is to sell out of, one is to operate out of, and the other one is to live in. They are three different markets. Historically, retail property, for example, shopping centres, was the gold standard, industrial commercial was okay, and residential was the dog. Now it’s the other way around. Residential is hot and everybody wants to be in it, and there’s a big demand for it as well as a shortage of housing, and housing prices have gone crazy. Industrial and commercial property has remained pretty well in the middle, and retail is now the dog. Why? For simple reasons: internet shopping, and the ability of anybody to go and buy on the internet has cut footfall in the shopping centres. And perhaps worse than that, it has created a situation where anybody buying anything of any value waves his camera or his phone in front of the barcode, and says ‘I can buy it somewhere else at 20% less’, and he presses the guy to give him a 10% or 12% discount. This decreases the profitability of stores, it cuts down the footfall, and the result is that shopping centres have really soft rentals and people are putting them under a lot of pressure. The high street is full of empty shops where things were not great. So your whole property scene is somewhat different. But coming back to your initial question about why invest in property, it’s a protection against the purchasing power of money, and in my lifetime, the purchasing power of £1 today is somewhere between 5 and 10% of what you could buy for a pound fifty years ago. Inflation is a huge factor, and property is protection against inflation. It has the added advantage that you can leverage it, so you can borrow long-term money against the property estate, and so the value of the money goes down, the property goes up, and it’s a hedge against inflation. Property doesn’t take a great deal of management. There are a lot of good reasons to go into real estate, and very good reasons why I’m in real estate to a large extent.

Q: What are your views on technology?
A: Technology today comes in so many different formats, and personally, running a business today is not like running a business was years ago. Today, technology gives you instant information on pretty much everything you do. I run a vast operation in America, and I have instant information on everything I want to know. This could never have happened before. I was just busy looking at some figures on operations in America, and seeing a real deflationary situation looking at last year’s prices against this year’s prices, in perishable products like meat, fish, produce, and things like that. The way you do business has changed, where you can do business has changed, and how you can do business has changed. So you can operate from almost anywhere, and have instant information. You don’t have to go to an office anymore; change has occurred in so many different ways, and in so many different places that it’s almost unbelievable.

A Selfie of Me with Mr Kirsh
A Selfie of Me with Mr Kirsh

Q: Are there any features which you look for when you invest in a business?
A: I am very reluctant to invest in something where I can see the finishing line before I start. I look at things that have scale, but then you have to be at a certain point in time in your business cycle. I am in a very mature business cycle, where I’m not looking to start new things, and I’m not looking to start the beginning of my thought process in what I want to look for. This would not be what I looked for 30 years ago, 40 years ago, or even 20 years ago.

Q: Do you have an investment philosophy?
A: It depends on the amount of money you have to invest, and who’s going to be looking after it. I have an investment philosophy that I only invest where I am comfortable with management. The right type of management can manage almost any situation. Whereas difficult operations can be well managed by competent people who know what they’re doing, great opportunities can be messed up by people who don’t know what they’re doing.

Q: On a more global scale, which country do you think has the most opportunities to invest in at the moment?
A: I’ve got absolutely no comment on that, because I don’t know the world sufficiently well to give you an answer. But my answer for where I like to invest, is that I like to invest in English-speaking countries where you have the rule of law. This is my preferred place of investment. In other words America, Canada, Australia, New Zealand, the UK. I can read the agreements myself, and I know that nobody is going to be able to steal from me with impunity. That’s a broad structure.

Q: What life lessons have you learnt in the course of your distinguished career?
A: I’d like to talk about is integrity: nothing has shaken the world more than the lack of integrity in the banking system. When I was a young man, the bank and the bank manager were the height of probity and correctness, and when you see all the rigging that has taken place in the banking sector, it’s absolutely awful. They punished the shareholders who had nothing to do with it. $250bn plus of fines have been paid by the shareholders, while the guys who perpetrated it were virtually untouched. I can understand that companies should be required give back money that they might have made through lack of integrity on the part of their staff, but to take huge funds out of their banking system can do enormous harm. Integrity in business is vital – we recently saw the lack of integrity at Volkswagen that shocked the whole business world. The consequences have still not been spelt out to the individuals, the company, or indeed Germany. Make sure you can always stand tall.

Q: What did you learn during your teenage years which you think has influenced your success?
A: My father died when I was 16, and I had to assume responsibility for a family that was ill prepared for the death, which came quite suddenly and unexpectedly. It left my mother in charge of a reasonably sized business, knowing nothing about it. She had to learn, and she insisted that I go to university, which I did. I used to work whenever I had spare time in the business, and the business was 70 miles away.

Q: What lessons can you learn as a teenager?
A: I can’t tell you. Everybody’s got his or her own personal scenario for what interests them and what doesn’t interest them. But I say again, to do things which you don’t have any interest or passion for is not a good idea, so do what you want to do.

Q: Is there anything else you wish you had done during your teenage years that you didn’t do?
A: No. Maybe run a bit faster, but not really. You are growing up in a much more affluent world than I grew up in. I grew up in a small town, where everybody knew everybody else. There was less wastefulness. There was less awareness. There were no computers, so your focus was much narrower, and much more self-centred on your immediate environment than the world at large.

An Interview with Lord (Norman) Lamont

Lord Lamont
Lord Lamont

22nd October 2015

Norman Lamont was Chancellor of the Exchequer under John Major, between 1990 and 1993. He was the MP of Kingston-upon-Thames from 1972 until the constituency was abolished in 1997.

Q: As Britain conducts a series of deals with China, do you think that integrating our market with emerging ones will profit the UK? Do you think that it will make the economy more vulnerable to foreign pressures?
A: Well, I certainly think Britain has to increase its trade with the emerging markets, and obviously with China. Britain has not been as successful as countries like Germany, which has much higher trade with emerging markets, and in particular with China. We’re in a period where the growth in the world economy is coming from the advanced economies, reversing the pattern of the last few years. If you go back to 2009, when the UK and the US economies were shrinking, the growth in the world economy was coming entirely from China and the emerging markets. Now that has completely revised, but I think we will go back to the previous situation. I don’t think China is collapsing, I think it is pausing, it’s having quite a number of problems. But yes, I think we ought to trade much more with China, and that Chinese investment, subject to security issues, is a very good thing.

Q: Do you support the move for the UK to leave the European Union?
A: I have said that I will make up my mind after I see the terms of the renegotiation. I would prefer to have a substantially renegotiated relationship between the UK and the EU. We will have to see what happens. I don’t myself believe that it is impossible for Britain to prosper outside the EU. I think that would be possible. But we will have to see what comes out of the renegotiations.

A Selfie of Me with Lord Lamont
A Selfie of Me with Lord Lamont

Q: Do you think the Conservative Party will be split over this issue?
A: I think that there is a tremendous will not to have an acrimonious debate, and remembering that the 1990s and the split over Maestricht were immensely damaging to the Conservative Party. There is bound to be an internal argument, and there are bound to be different people taking different sides: that is inevitable with a referendum; indeed, that is the whole point of a referendum, when the divisions and arguments do not correspond to parties. But I think everybody is determined that whatever the outcome, the party should reunite and not be acrimonious. I personally think that the Prime Minister should give Cabinet Ministers a free vote.

Q: In your opinion could Jeremy Corbyn ever become Prime Minister?
A: Well, I think it is improbable that he will become Prime Minister, but in politics, nothing is absolutely certain, and I think the Conservative Party should treat him seriously. I do know Mr Corbyn slightly, and he has a certain charm quite honestly. I think his policies are naïve. I think he’s dangerous not because he’s malicious, he’s dangerous because he’s extremely naïve and his attitudes to foreign policy, defence, NATO, the nuclear issue, I think are all wrong headed. I think he has very little understanding of economics at all. His entire view of life is focused on the bottom 15% of society, and in some ways this is honourable, but it is not enough for a Prime Minister.

Q: What was it like being the Chancellor? What were your favourite and least favourite things about the position?
A: It was an enormous privilege. It was a quite difficult time, I suppose, but I think actually everything worked out quite well for the British economy. I think I certainly left the economy in a stronger position than when I came to office. The route by which we got there might have been rather circuitous, but actually, I found it very exhilarating. I particularly appreciated being part of the negotiations for the Maastricht Treaty, which set up the Euro: I negotiated our non-participation in the Euro, and that gave me an insight into how European countries view the Euro, and why they wanted the Euro. I was telling them we didn’t want the Euro and we wouldn’t participate in it, which many of them refused to believe. They thought that I would change my mind and the government would change its mind at the last minute. That was a very fascinating period. What did I
dislike? I didn’t dislike anything about the job: I found that it was tough, but you were paid to have a tough time, and that’s your responsibility.

Q: For people my age looking towards a career in politics, what advice would you give?
A: I would applaud people who want to go into politics. Mind you, I think that politics is so interesting, and even though it’s quite a rough trade, particularly with the way you now have mob rule in social media and you have very aggressive newspapers, despite all that, I think politics is an absolutely fascinating and extremely worthwhile activity. I think it will always attract able people, and I’m very impressed by the calibre of young MPs in the House of Commons. The only advice I would give is that I think it’s a good idea to have a career outside politics before going in: bring something to Parliament from the outside world. I’m not saying this as a criticism of anyone in particular, but there are an awful lot of people in politics at the moment who have just been around the political scene all their lives, and I don’t think that’s altogether a good thing. You need a variety of experiences. Also, I think that it would probably be better if people went into politics when they were a bit older.

Q: What life lessons have you learned over the course of your distinguished career?
A: I think the thing I’ve learned is that the unexpected always happens, and you can never predict the future, and that’s what makes it extremely enjoyable.

Q: What did you learn in your teenage years that you think influenced your success?
A: I’m not sure I learned a lot in my teenage years. I was heavily influenced by my parents, who encouraged me very much to read. My mother used to take me to political meetings. I didn’t always understand what the political meetings were about, but I gathered that this was very exciting and very important, and it seemed to have a good atmosphere. I think that had a huge influence on me.

Q: Finally is there anything which you wish you had done which you didn’t do when you were my age?
A: I sometimes wish I’d read law. I think being a lawyer is a very good background, really. I read English and economics. I love reading English literature, and I continue to read a lot of literature today. Economics is interesting, but I know I’m not sure that economics is of any practical use to anyone. I think that it’s a way of thinking, a branch of philosophy, whereas people tend to think that it is a predictive tool, which in my opinion, it is not.