Last week John Slade set out his vision of the future to his fellow directors at BNP Paribas Real Estate. His opening slide, entitled “Breaking through” showed a fist smashing a hole in a wall. It was a highly visual statement of intent, designed to grab attention. More interesting were the slides that followed, detailing an ambitious growth plan. Because, unlike many chief executives, Slade backed up his vision with specific yardsticks by which his success or failure will be judged over the coming years.
It was in the run-up to last Christmas that Slade took the phone call that brought him to BNP PRE. It was a call that came out of the blue. At the time he was running Accrue Capital, the property private equity house he founded with Stephen Webster. His first thought when the scale of the challenge was presented to him was: “Why would they be ringing me?” In truth he knew exactly why they were calling. I knew BNP Paribas was big but I didn’t realise how big.”
It wasn’t so long ago that Slade chaired DTZ Capital Markets; before that he was chief executive of the City at Richard Ellis. In those, and other roles, he proved himself one of the best deal-doers around. Doing deals is something that BNP PRE excels at elsewhere in Europe. In the UK it has yet to prove its mettle. If Slade delivers on his plan, that will soon change.
When he took that initial call, Slade admits he underestimated the scale of the operation at the firm, part of what he sees as its historic problem. “I knew BNP Paribas was a big name, a big bank. But I didn’t realise how big a name or how big a bank, to be honest with you.”
He was taken by the business’s play to acquire DTZ and not remotely discouraged that it had not come off. “It was quite impressive what they wanted to do there, their ambition there, that they could swallow DTZ and have the capital capacity to do it and be so serious about it. You wouldn’t have thought that could have happened because of the position of BNP Paribas Real Estate in the UK, but the whole global and European thing is much bigger than that.”
The UK is core
Slade is by now well versed in the numbers: With 3,400 employees, BNP Paribas Real Estate turned over €658m (£532m) last year, delivering a profit of €156m. The parent bank, BNP Paribas Group, is in 79 countries with nearly 200,000 employees.
Philippe Zivkovic, executive chairman of BNP Paribas Real Estate, has put the UK at the heart of his expansion strategy. Zivkovic sees it as a “core country” alongside France and Germany, a triumvirate that will provide a platform for moves into the Middle East and Asia, deeper into retail, and to become one of the top 10 investment managers in the world.
“The group wants the UK to be much more comparable to what it does in France and Germany,” says Slade. “They very much see London as the gateway for international money into Europe. A big commitment there is to the UK, and our commitment is to strengthen our London offer for our clients, both existing and international clients, who are coming into London.”
To deliver, the group has a three-to-four-year growth plan. It wants to increase its €585m turnover to €800m.
In the UK, Slade’s ambitions for a firm that currently sits in 13th place in the Estates Gazette Top Agents league table are even greater. “We’d like to move our ranking up to five or six,” he says. “That implies a growth from a turnover of about £61m to a turnover of about £100m. And we’re not going to do that all organically.
“We’re 500 to 550 people in the UK at the moment, and we’d probably like to grow up to be 700. In the City of London we have had a team of four or five senior people, and the same in the West End. And we’d probably want to double the size of those teams, but double them with people that are going to perform. I’ve already taken on quite a lot of people, people I’ve worked with before, so there’s quite a lot of people coming to join us who I think are real performers, which will be great.”
Jobs up for grabs
BNP PRE is recruiting for more than 20 investment positions, 10 London agency roles, 10 regional roles and 10 property management roles.
This month alone CBRE man Andrew Meikle has joined as head of its Birmingham investment team, Strutt & Parker’s Charles Howard has been appointed director in the West End team and Nick Rock nabbed from niche practice Brewster Leech to head its West End office leasing team.
“We want people who want a challenge,” says Slade. “I think we offer something really good, in that we’re really entrepreneurial. Although we’re a big firm we want to give people their head to do deals.
“We’ve put a pay scheme in place which is totally transparent and totally performance-led for the individual, so the individual knows what he’ll get and if he performs he’ll earn a lot of money.” But reports of £1m-plus packages are exaggerated.
To deliver on his ambitions, the firm will consider acquisitions – though it’s not Slade’s priority right now – particularly if it delivers recurring income. “We’re not going to acquire a total people business because you’re buying the people and the asset can walk out the door. But we might acquire in the investment management area. We might acquire in the management area, where you’re actually buying recurring income and then people who could just as well leave you after three years because they’ve taken the money and ran.
“We’re not actively out chasing anybody, but we talk to people. But a transaction on the scale of a DTZ at the moment probably isn’t what we’re going to do.
“We’ve got a very structured development plan, with a lot of it focused at the UK, but not just at the UK, and we’ll take that forward. And the money that was committed to the DTZ deal we’ll use to expand the business in an ordered manner, but in a number of ways rather than a major acquisition.”
Getting the balance right
As well as growth, Slade is looking to overhaul the balance of the business. “About 70% of our business at the moment is consultancy, which is an enviable position for a lot of people who want cash flow in the UK.
“We want to maintain that business, but we’d like to get the transactional side of the business to be a larger percentage. If we get to 50/50 we’ll be fine. If we build our London presence and our transactional presence that should take more business out into the regions.”
Delivery would transform the firm’s reputation in the UK. And for Slade it would free him up to go back to his first love: deals. “I’m enjoying this because there’s a real aim and a real ambition and a real ability to do it. But yes, I’d like to get back to the client side.” And looking out from his eyrie high above the City, he says: “I’d like to get back involved with some of these City buildings.”
