Regrets, yes, Ron Brierley's got a few

By DITA DE BONI

Why did Sir Ron Brierley, investment guru and avid stamp collector, choose the 40th anniversary of his founding of Brierley Investments to leave the company?

On the phone from Wellington's Brierley offices, where he was tidying-up some loose ends, he was not keen to expand on his private life, but was more forthcoming on his reasons for leaving.

His well-known pastimes, cricket and collectibles, may err on the genteel side, but in business the "silver fox" can still cut and thrust with the best of them and when assessing the company he is leaving he still believes in calling a "spade a spade."

"BIL is an organisation that has changed in character, quite completely and not for the better, [one] which geographically, and in other respects, was becoming more and more distant as far as I was concerned.

"It was a situation where the opportunity and invitation for my input was fairly minimal and I only really stayed on the board in the more recent years out of a sense of responsibility to shareholders."

Sir Ron suspects BIL's 40th anniversary would have passed "completely unnoticed" if he had not drawn attention to it, but denies that leaving has tugged at his heartstrings.

"I hate to be unsentimental, but it has not really [hurt]. There's a strange sense of sadness and regret in terms of the last 10 years of the company's history.

"So far as retiring from the board, it's a somewhat momentous occasion, but more I think there's a sense of satisfaction that both myself and the company have survived the 40 years. That's the real achievement."

But he admits that the company should have quit while it was ahead.

The failed accountancy student launched BIL in 1961 with the belief that "if you were buying $1 for 50c, you couldn't be too far off course."

Obstacles facing the fledgling investment vehicle "didn't actually make it any less attractive, in many respects."

The company's fortunes improved solidly in the years between 1970 and 1987.

In 1986, its shares hit an all-time high of $6.68.

Now they are around 65c. It is estimated $4.5 billion in shareholder wealth was lost in the 1990s through bad handling of investments such as Air NZ and Thistle, investments that are still bringing red to BIL's balance sheet.

BIL's remaining New Zealand shareholders, holding 17 per cent of the company, tend to continue to think highly of Sir Ron, despite the company's spectacular decline after the 1987 sharemarket crash.

Does Sir Ron feel responsible for the erosion of BIL shareholder wealth?

"I think everybody has to bear a share of the responsibility so yes, that's very clear.

"When I stepped down as chairman I should have gone completely. Equally, as a non-executive director, I should have taken a much stronger stance during the '90s than simply accepting that I was outnumbered and going with the flow."

Analysts agree. Investment fund manager Oliver Saint says Sir Ron's reluctance to leave BIL because of his historical attachment to the company may have clouded his judgment.

"He has a tremendous ability to research and find the peculiarities and quirks of companies, and make a profit for shareholders.

"And if you followed [him through to] GPG, you would have done fairly well. But other shareholders have a fairly sour taste in their mouths because they believed that [he] would serve their interests on the board, which unfortunately was not the case."

After being sidelined in 1990 by lieutenants Paul Collins and Bruce Hancox, Sir Ron says he remained because he's never been the resigning type.

"I almost became a rebel on the board which arguably, of course, is all the more reason for staying, because by resigning you are letting it go by default."

The difference between the brash Brierley upstart of yesteryear and today's Bermuda-incorporated, Asian-owned vehicle is stark, he says.

"Originally it was something bold and innovative and in my view had a lot of logic, which was to look at the real intrinsic value of companies and try to exploit the value - a totally new concept, of course.

"That started to slip away when the company became so large it was almost a victim of its own success. There was, to some extent, bureaucracy by default."

While studiously avoiding any mention of present chief executive Greg Terry, he says now BIL doesn't stand for anything.

"And I don't say that in a dismissive sense, I say that in a serious, analytical sense. What is its purpose?"

He agreed to BIL's transfer to Singapore with reluctance.

"I think BIL had run its race in New Zealand to a large extent. I think it had to try something, and at least [the move] had the merit of being a clean break."

"New location, new faces, but they've inherited a terrible legacy."

Sir Ron says he has an agreement that the board will change the name of Brierley, despite BIL denying any name change plan only a week ago.

Although weighty platitudes were handed down by BIL on the occasion of Sir Ron's retirement, the man himself is under no illusions about how integral he is to the company he leaves behind.

"If I remained as a consultant and was sitting by the telephone, I'd wait an awful long time for it to ring."

In any case, he is focused on his main role as chairman of GPG. So much so, in fact, that it takes several tries before getting him to mention pastimes not related to that company.

But detailed discussions on the GPG's manoeuvrings are not on the agenda. Nor is its rumoured play on Fletcher Building, which it is understood to be eyeing in order to split it up, Sir Ron's favourite modus operandi.

On trying to replicate Brierley's initial success, he is unequivocal. "Definitely - we've always said that quite openly. But [to] also learn from experience and ... from the mistakes that, in retrospect, can be identified with BIL."

One thing Sir Ron has promised with GPG is that it will eventually be wound-up and the capital returned to shareholders.

His views on the rights and roles of shareholders are pragmatic and not as sympathetic as one might expect. Mom and Pop shareholders are the same as any others, and have probably become less significant as financial markets have matured.

He is critical of Fletcher Energy shareholders who recently voted to sell their company to Shell, foiling a late play by GPG-backed Peak Petroleum consortium.

"The board and the shareholders sold out to Shell for much less than they could have got. All the shareholders needed to do ... was to show some resolve, show some courage ... and [they] would have been at least $100 million better off, probably within hours."

His focused, pragmatic approach to doing business may be why concepts such as corporate governance are dismissed by Sir Ron.

"I think corporate governance is one of those fancy do-gooder recent inventions ... I mean, the pilot of an aircraft doesn't get on and start reading a manual on how to fly the plane properly. You're either running a company responsibly or you are not."

His conversation edges towards the personal but never quite gets there. He has kept his private life very private, although tales about the salad days suggest a man who lived the 80s "work hard, play hard" mantra. Although he is known for his penchant for cricket and stamps there are rumours of other, rather more racy hobbies.

Those close to Sir Ron are keeping quiet.

"He's a kind, wise old fox," is all GPG's Tony Gibbs will say. "A master strategist."

Sir Ron never mentions friends or family. He says that apart from internet surfing, a hobby he has embraced, his leisure time is fairly low key.

"I do a lot of walking nowadays, [which is] good thinking time as well.

"The cricket has been quite an involvement over the years. I also enjoy dabbling in auctions - collectibles, art, that sort of thing. None of it sounds terribly sensational but can be quite time consuming."