“It keeps me active,” is Sir David Levene’s reply when asked why he still spends a few hours in the office daily when he is in his 88th year and facing some physical challenges.
The day-to-day running of his business interests may be done by trusted others but he still has the final say on every investment decision, according to his senior management team.
The octogenarian has a $250 million property management business, Quadrant Properties, that primarily invests in industrial property. He says the only property held in his own name is his $8.65m home on the water’s edge at Milford where he and his wife Billie have lived since 1960 and raised their two children, Elizabeth and Mark.
He also makes investments through Lewis Holdings (named after his father) into Kiwi startups. The diverse portfolio of 36 investments ranges from a half share in Auckland tomato grower NZ Hot House Group founded 25 years ago by Brett Wharfe to a 7.67% stake in Auckland’s North Shore-based inventory management software-as-a-service provider Unleashed Software to a 8.72% stake in Healthcare Holdings, which has interests in a range of hospital, diagnostic and specialist healthcare businesses including Ascot hospitals. Only one in the portfolio is a direct investment in a listed company.
A recent sale was Sir David’s half share in Kiwi independent production company Great Southern Television to Australia’s Seven network while co-founder Philip Smith reduced his half-share to 30%.
Lewis Holdings doesn’t have a website because it’s already inundated with investment requests.
Sir David won’t reveal the exact amount invested but says he’s had a few hits and misses over the years until Lewis Holdings introduced more due diligence including psychometric testing of all entrepreneurs and even some members of the senior management team before making an investment.
His son-in-law, Rob McKay, sold his radio station in favour of doing a degree in business psychology before setting up AssessAdvantage, which does employee job fit assessments. Sir David says he wanted to “support the family” so he started using the tests for hiring and for investments.
He says it made him see why some of the investments he had made, sometimes with friends, were not right. “You still have to like the person to do business with them,” he says.
The team doesn’t want to reveal its secret sauce on investment success factors but the key focus is on the passion, drive, and tenacity of the team running the startup. “It also, obviously, has to have a great idea that solves a real problem and a global market,” Sir David says.
He offers his opinion rather than advice to any entrepreneurs that ask for it and tells those starting out in business to “Be good to people. Your team, your customers, your advisers, your suppliers. All the people. People are the most important thing in any business.”
The good old days
Sir David likes reminiscing about lessons learned from his earlier years, including working in the family business during school holidays mixing putty and filling bottles and tins with turpentine and serving the odd customer.
He recalls as a child visiting the local bank manager with his father who asked to double his £50 overdraft to expand the business and was instantly granted it because of his good credit record. After the meeting his father told him to “keep your credit name clean” and “I’ve followed that all my life.”
In 1952, while still in his early 20s, Sir David took over management of the family paint business founded by his father and uncle, confident he could make it grow faster by giving credit to paint contractors. At the time, his father warned “go and do it your way but, if we lose everything, it’s on your shoulders.”
Turnover instantly increased and following a trip to the US in 1959, the first drive-in store was opened in Newton. Levene grew to 52 retail stores along with paint and wallpaper factories by the time the much-accoladed businessman sold it to Skellerup in 1994 for $74 million.
The subsequent collapse three years later of a company that had taken his family more than half a century to build up and where 1000 staff he had worked with lost their jobs without holiday or redundancy pay, was a severe blow.
He opted not to buy the remains of the firm because too many key staff had left and he hasn’t invested in retail since then.
Although it took a long time for him to recover emotionally from the collapse, Sir David says the thing he is most proud of in his working life is that many of the 1000 Levene staff still regularly contact him, sending him birthday and Christmas cards and taking him out to dinner “even though they got dumped on.”
Not all of them lost out on the sale – 110 core staff had been vested cheap shares while he ran Levene on the proviso if it was sold, he could buy back the shares at asset value. He never exercised that right and all those staff got exactly the same price as he did in the sale – some became instant millionaires.
The give-back
The charitable David Levene Foundation gives away a seven-figure sum each year, with decisions on donations made by a group of trustees that include his two children.
The foundation focuses on three primary areas – education though charities such as Kiwi Can, health through foundations such as the Neurological Foundation, and in early intervention such as Great Potentials Foundation, which offers education and parental support in low-income New Zealand communities to unleash the potential of children, young people and families.
“It’s quite big now but I want it to be bigger, to make the capital bigger,” he says with a hint of frustration in his voice. The foundation doesn’t have a website either as it already gets so many approaches. Some 80% of income is distributed each year.
Sir David is the last surviving member of the original group of businessman who founded the NZ Outward Bound Trust in 1962 and is a patron of that trust along with YES Disability and the Carbine Club and an active member of the Rotary Club of Auckland.
A former keen golf player, Sir David financially supported golfer Lydia Ko earlier in her career but no longer funds elite sportspeople after being flooded with requests for similar support and because of recent Charities Act changes.
He’s a firm believer in corporate and individual philanthropy and social responsibility (where individuals and businesses balance profit-making with activities that benefit society), which he says is on the rise in New Zealand.