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Sunday 12 October 2008

The entrepreneur’s art: buying, building, selling

Judi Bevan meets David Young, who served in Margaret Thatcher’s cabinet before chairing Cable & Wireless and creating his own successful private-equity business

These days, as well as running his own company, Young Associates, he chairs the council of University College London, where he graduated in law in 1954. He has turned round the finances of the Chichester Festival Theatre and is active in Jewish Care and Chaim, a charity caring for the families of cancer sufferers. When I met him he was about to set off for Bhutan to pursue his latest craze of photography, which he calls ‘my new career’. Two years ago he raised considerable sums of money for the Prince’s Trust by selling a collection of his moody black and white photographs of the Antarctic at a Cork Street gallery.

Young retired from C&W in 1995 after a disagreement with the board — and, he points out, after overseeing a doubling of profits to £1.3 billion. The following year he started Young Associates, a sort of gentleman’s club for punting in technology companies. ‘It’s a private private-equity company in the sense that I use my own money and money from a small group of friends rather than outside capital,’ he says. He has two ‘terrific’ younger partners who among other things have relieved him of the boring business of dealing with solicitors and accountants. The venture has been a rollercoaster ride through the thrills and spills of the dotcom boom and bust. ‘I knew the world had gone mad when someone put a price earnings ratio of 80 on one of the stocks I owned.’

But although some of his investments collapsed in value in 2001 he has survived all that, along with cancer of the larynx, with his good humour still intact. ‘It was punishment for telling all those bad jokes,’ he says of the cancer which has left his voice slightly husky.

In the current uncertain times, Young has the advantage of having lived through the 1973–74 stockmarket and property crash along with the secondary banking crisis. As a director and shareholder in the Town & City property group, he watched its shares dive from 116p to less than 4p when he sold them, just before Jeffrey (now Lord) Sterling rescued the group and rolled it into P&O.

Such experiences helped him to see the impending recession coming some while off. ‘When else have we had 13 years of uninterrupted economic growth?’ During the past year Young has been selling his investments and moving into cash in preparation for tougher times. At the turn of the year Young Associates sold Eurotel, a telecoms services company for businesses, for £44 million. We bought it two-and-a-half years ago, put in new management and bought two or three new businesses.’ Buying, building and selling are what he enjoys best. ‘I loved my time in government and at Cable & Wireless but I’m an entrepreneur at heart.’ The cash pile he has built is not for retiring on however. ‘I’ll only stop work when my lease expires.’

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