David A Reuben is a contradiction. The 26-year-old is the son of David Reuben, the billionaire who, with business partner and brother Simon, was involved in the feud with developer Westfield over the Olympics site.
So Reuben junior does not need to work. Yet while he is one of four heirs, with a brother, sister and cousin, to an estimated £3bn fortune, he travelled from MIPIM by easyJet to “be careful about company expenses”.
A major fan of the new Conservative party, with George Osborne’s brother a family friend, he has a cocky assuredness that was noticed on that flight – a passenger in front asked him to tone down a loud conversation about his aristocratic acquaintances – yet others find him warm and charming, and he is very keen that his property company, River Investment Group, is taken seriously.
The group started just under two years ago when he left Colliers CRE (his first job was at Nelson Bakewell) and set up in a plush Mayfair office with his father and uncle’s heavyweight backing as sole investors.
“I run a business, so I treat my family like I would treat any other shareholders,” insists Reuben. “I have to expect to be dumped in a second if we don’t continue to make money for the people who are investing in us. And it’s almost worse having family as shareholders: you mess up once and you worry about your whole future.”
André James, head of investment at Colliers CRE, who hired Reuben five years ago, says: “I hired him before I knew much about the family. I saw this sparky entrepreneur when he was just 21. In a big corporate environment, his approach didn’t go down too well with everybody, as he doesn’t conform to the corporate model. But my response was it didn’t really matter. He was a good egg and was a 24-hour-a-day businessman.
Reuben has two partners at River Investment to share the responsibility, 33-year-old Stephen Benson and 29-year-old Jacob Lyons. Benson, a former Lambert Smith Hampton director, has property experience and is a calming counterbalance to Reuben’s energy and exuberance. “He’s a good, solid, safe pair of hands. He is David’s sweeper. He’s got his feet on the ground. They are a good double act,” says James.
Lyons, a childhood family friend, is himself an heir to a dynasty – he is the grandson of financier Jack Lyons – and concentrates on running River Investment’s sister company, private equity investor Augusta Capital.
River Investment has a mandate to invest in Europe to generate greater returns than those found in the West End, the market in which Reuben and Benson previously worked. The pair have not ruled out investing in the UK in the future but, for now, they have wasted little time in learning a new market and building up a ¤1bn portfolio.
One big splash in particular drew attention to them. While many institutions and private investors shied away from a portfolio of 33 German C&A department stores that was put on the market earlier this year, Benson and Reuben embraced it.
One UK investor, who looked at the portfolio, said he was put off as bidders were barred from speaking to C&A about its commitment to the stores. But River was not. Reuben and Benson set up a 50:50 joint venture with asset management company Aerium Properties, run by Franck Ruimy, and made the properties the crown jewels of its European portfolio.
“There isn’t certainty over the income, but they were great buildings in great locations. We think it’s a great deal and time will show it,” explains Reuben.
The strategy is to buy large volumes of property quickly. “When you have volume, you can look at breaking it up, refinancing parts of it, or even REITing it,” says Reuben.
As Reuben and Benson chase yields in emerging markets such as Romania, Hungary, Ukraine and India, Lyons, a former investment banker at NM Rothschild, has been investigating bigger-ticket corporate options in the UK.
This month, Augusta Capital hit the headlines when it was linked with a deal that would involve the largest UK acquisition of a housebuilder. Augusta is competing head-to-head with private equity giant Permira for retirement homes group McCarthy & Stone. A deal valued at £1bn would easily eclipse the £643m acquisition of Westbury by Persimmon, completed in January this year.
Lyons has already become a director of Ultimate Leisure after Augusta built up a 29.9% stake in the company. His interest is clearly in the real estate angle – Ultimate Leisure has a market capitalisation of £70m, but its property is valued at more than £80m.
“We have been involved in several companies and transactions,” says Lyons. “But we buy shares to buy businesses. And we will hopefully be looking at publicly quoted companies in Europe on a sector basis with a view to buying and enhancing value.”
If this sounds overambitious, this next generation plainly aspires to personal greatness.
Colliers’ James says: “Sceptics are bound to say he’s all about the Reuben brothers’ money. But he is also about the connections, contacts and trust he’s established.”
Reuben, for one, wants to be mentioned in the same breath as Ian and Richard Livingstone, Vincent and Robert Tchenguiz and, of course, David and Simon Reuben themselves.
“There’s no chance of out-achieving my father and uncle, because in order to do that I need to go to Bombay with no shoes on my feet,” he says.
“But my goal is to be one of the biggest property players there is. I don’t want to build a €1bn portfolio and then retire to the Caribbean.
“In 10 years’ time, I want to read an interview in EG with somebody else. And when they are asked who they admire most, they say us guys.”
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The Reuben brothers became public figures when London mayor Ken Livingstone named them as the arch-enemy to the 2012 London Olympic Games for failing to agree terms with Australian developer Westfield. Reuben junior says the family just wanted the “shoot-out” auction for the Stratford City development rights to be a clean process. “But it didn’t materialise like that,” he says. “It was a politically flavoured transaction, peppered with unhelpful comments from the mayor, who made it very difficult for us to demonstrate our actual commitment.” Entering the fray, Livingstone told them to “go back to Iran and try their luck with the ayatollahs”, an erroneous insult as the Reubens were born in India and are of Jewish Iraqi descent. “We are not offended by the comments,” he says. “To a certain extent, we can understand why he made them. He was backing the other horse. “He knew exactly what he was doing. All these people who called him racist and anti-Semitic got the wrong end of the stick. He’s just intelligent. He knows how to manipulate the media to get what he wants. “His comments were personal, but it’s important to know why. The answer is because he had already made his decision over who he wanted to develop that site. And he was doing his best to make them win.” The Reubens still made a whopping profit. Having bought Multiplex’s 25% stake at £37m, they sold their 50% stake to Westfield for £110m. “My family can never be upset about making such a big profit in such a short period of time,” he says. “We just wanted to do a good deal. My family was very committed to undertaking a development, much more committed than people will ever think. “We didn’t like the public nature of the debate. The pressure was on to do a deal and we felt that, if we didn’t compromise, we might always be seen as people who threw spanners in the works.” Livingstone was cleared of anti-Semitism on Tuesday in an inquiry conducted by the Greater London Authority. |
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David and Simon Reuben, 68 and 64 years old respectively, made their fortunes from the metals trade in post-perestroika Russia. But real estate has become their investment of choice since they left the former Soviet Union in 1999. “David and Simon have always been partners and always will be,” says Reuben junior. “But they are very, very different people.” “My father is very big picture. He’s not a details man. If he says something in one line, he expects people to translate that into whole business plans.” An ardent crossword fan and Scrabble player – “I don’t understand how someone who wasn’t born in this country has such an incredible grasp of the language” – David Reuben senior prefers to come up with the concept of the deal and theorise about it. On the other hand, his younger brother Simon is the polar opposite. “He is very micro-management, very specific. He knows every aspect to every detail to what is going on in his business,” says Reuben junior. Simon Reuben’s feud with Westfield became notorious, ending with a “shoot-out” auction (p78). His nephew says: “Simon is not always an easy man to do business with. But people still like working with him. The reason is once he shakes your hand, you have a deal. He’s got bags of integrity. He gives as much as he gets. But he doesn’t hate anybody.” |
