Thursday 28 Mar 2024
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SINGAPORE: Self-made multimillionaire and chairman of Wealth-X David Leppan does not invest in stocks and bonds, but in tangible assets such as property, classic cars and Old Masters paintings. Find out more about his investments.

Over the past two decades, David Leppan, a 41-year-old British multimillionaire, entrepreneur and philanthropist, has had his fair share of good returns from a handful of investments, namely business ventures, real estate, art and classic cars.

But when it comes to generating “spectacular gains” over a short period of time, none of these investments can beat the US$1 million ($1.27 million) contribution he made to charitable organisation Global Poverty Project (GPP).

Two years ago, GPP needed US$7 million to stage a rock concert in Central Park, New York to raise money to aid its mission of ending extreme global poverty by 2030.

“Through the rock concert in Central Park, they were hoping to raise money for charitable purposes.

But they needed US$7 million to cover the costs,” recalls Leppan, who was approached by Hugh Evans, founder and campaigner of GPP for funding.

“I was the first one in.

During dinner, after listening to [Evans] for 10 minutes, I said to him ‘I can’t give you US$7 million but I will give you US$1million’.

I believed in him and thought he would do the job,” says Leppan, who is co-founder and chairman of wealth research firm Wealth-X.

His US$1 million contribution created a “domino effect”.

Soon after, Evans was able to find other donors including the Bill & Melinda Gates Foundation to fund GPP’s concert, which featured singer Neil Young and bands such as Foo Fighters, Black Keys, Band of Horses and K’naan.

The fundraising gig was a huge success and GPP received financial pledges and commitments amounting to a whopping US$1.31 billion.

“From an investment point of view, that was fascinating.

That [US$1 million dollar contribution to GPP] was the finest investment I had ever made,” says Leppan, who is a serious real estate investor and an avid collector of classic cars and Old Masters art.

The entrepreneur who made a bundle from the sale of World-Check to Thomson Reuters in 2011 does not own a lot of stocks and bonds.

Instead, he has a massive portfolio of property investments, mostly in London.

The car enthusiast also owns a fleet of 10 classic cars and six modern ones, mostly Rolls-Royces, Bentleys and a couple of Ferraris in his garages in London and Spain.

As a lover of Old Masters art, Leppan also has a collection of paintings such as those of Spanish master Diego Velázquez, Flemish Baroque artist Anthony van Dyck, and Italian renaissance artist Il Bronzino.

“I am not the type of individual who tends to invest in the stock and bond markets.

I am a firm believer of properties and tangible assets.

I like the fact that I can see and touch them.

Walking down the street, you can put your hands on a piece of property and you know it is real.

I also prefer to run the risks when it comes to buying a piece of art or when I choose to financially back a business and build it up,” says Leppan in a recent interview with Personal Wealth in Singapore.

Leppan, who has an estimated net worth of between $50 million and $100 million, reveals that he owns many investment properties in London, which he rents out to earn a stream of passive income.

“I also own some properties in Singapore,” says Leppan, who stays at the St Regis Residence when he is in town.

Tips on real estate
He reckons that London is one of the most attractive real estate locations in the world.

“As far as properties go, it is very hard to go wrong in London, particularly at the West End in places such as Kensington, Knightsbridge and Mayfair,” says Leppan.

He fondly remembers his first London property investment, which earned him a handsome return of 120% within 18 months in 1999.

At the turn of the millennium, Leppan and his wife bought a 100 sq m flat on the top floor of a small building with beautiful view in Kensington for £250,000, which was “a bit of a stretch” for him at that time.

The flat was “massively outdated”, he recalls, and needed a major makeover.

“We did the renovation and when the market moved up, we sold it for £550 000 18 months later.” Today, the same flat would have cost around £1.7 million, according to Leppan’s estimates.

Property prices in the prime areas of London just keep moving higher, he observes.

“That is why I think London is a fabulous place to buy.” The best real estate deals in London do not have to be the most expensive ones, according to Leppan.

He recommends buying one-bedroom flats with minimal overheads and low service charges in areas such as Kensington.

“I would always strongly stick to one-bedroom flats because the demand for these units is so high in London that you can rent out a unit on the same day you buy it.

You can go for a house, which can generate a lot of income but it can also stay empty for six months until you find the right family.

My best advice is to go out and buy as many one-bedroom flats as you can in London’s best areas,” says Leppan.

Finding value in Old Masters
Married to a Spaniard whose father is an artist, Leppan, who grew up in South Africa, says it was his father-in-law who got him interested in Spanish art, particularly that of Velázquez.

The Spanish master was the official court artist during the reign of King Philip IV of Spain.

“Although I had an upbringing in South Africa, I grew up with the love of old things.

Living in Europe and marrying into this family, I was engulfed by Spanish art and my passion for Velázquez just grew and grew,” he says.

Leppan owns a few of Velázquez’s portraits.

“What I find most interesting are portraitures rather than paintings of still life or landscape.

I like the idea that you have a silent witness who listens and watches for three to five hundred years,” says Leppan, who also owns some “museum-quality paintings” of Van Dyck and Bronzino.

“I have the oldest copy of the Bronzino’s portrait of [Cosimo I de’] Medici [who was the Duke of Florence from 1537 to 1569].

The original does not exist anymore.

It is lost in history,” he adds.

But Leppan’s favourite Old Masters artwork is not among his collection.

It is Velázquez’s Las Meninas, which is on display at the Prado museum in Madrid.

For Las Meninas, Velázquez was asked to paint the portraits of the king and queen of Spain.

“But in a moment of brilliance, Velázquez decided to paint what the king and queen were seeing,” says Leppan.

Las Meninas showcases a young princess with an entourage of maids of honour, chaperone, bodyguard, two dwarfs and a dog.

The images of King Philip IV and his queen can only be partially seen as reflections in a mirror in the painting.

“It is just a spectacular piece,” says Leppan.

With modern and contemporary art works soaring in price, fuelled by demand from the new rich of Asia, Leppan says he is finding good value in Old Masters art.

“It doesn’t mean that I don’t buy modern or contemporary art because I do.

But as investments, I think they are a high-risk game.

I just find that Old Masters are undervalued.” There is only a limited supply of Velázquez or Van Dyck works in the art market today, he says.

In contrast, many of the prolific modern and contemporary artists are producing “hundreds and even thousands of pieces”, Leppan observes.

“I just find it hard to believe that in the long term, they will be good investments.

I would rather buy something from artists who are no longer around.” He has no qualms about buying those by late American pop artists such as Roy Lichtenstein and Andy Warhol if they are selling at a good price.

But Leppan would not pay big bucks for living artists’ works of art as investments.

For modern and contemporary art, collectors should buy them “out of love instead of treating them as good investments”, he advises.

“For the vast majority of modern art, if you try to sell them within five or 10 years, chances are, you will get almost nothing from it.” For new investors of art, Leppan recommends that they buy just a handful of the best-quality pieces from the artists they are passionate about, instead of buying several average or poor quality ones.

“You should always buy the very best you can afford rather than buying a poor-quality piece.

There are lessons to be learnt.

Everybody makes mistakes.

I remembered the first piece that I bought from an artist that I really wanted.

No matter how bad it was, you still want to buy it because you just wanted to have one.

Over time, you start to think… if you had not bought those paintings of average or poor quality, you could have bought one really great one.

That is really what you should aim for.

But it is really difficult to hold back when you are enthused and passionate about it.

My advice is to hold back and wait for a better piece to come along because I have learnt the lesson.” With Old Masters art, Leppan recommends that collectors hang on to their paintings for some time.

“It needs to sit for a number of years to get a bit of the heritage.

A piece that transacts too quickly leads people to think there is something wrong with it,” says Leppan, who does not take advice from his private bankers in the area of art investments.

“When it comes to art, I believe I know more than what they know.

Very few financial institutions I come across really know the art world.

They do not tend to advise me on art.

But they do advise me on properties.”

Car collection
When it comes to cars, his favourites are those made by Rolls-Royce.

Leppan’s fascination with Rolls-Royce cars began when he was about 10 years old after he saw a “beautifully restored 1960s Rolls-Royce” that belonged to his classmate’s father Mr Webb, who came to pick up his son at Leppan’s boarding school.

“It looked immaculate, like a boat which glided along the roads.

I had never seen a car like that,” Leppan enthuses.

“Mr Webb told me with such passion about how the car was built… how many leather hides had gone into the seats, how many coats of paint it had and how many men had beaten straight sheets of metal over wooden frames to make the shape of that car.

He was the one who planted the seeds of my passion for Rolls-Royces and Bentleys, which are just beautiful works of art.” Although Leppan owns a couple of Ferraris, he still finds the Italian speedsters a bit hard to control.

“With a Ferrari, you tend to spend your entire life trying to slow the thing down,” he quips.

“It wants to scream down the road but I am constantly trying to pull it back, which is exhausting.” Leppan enjoys the experience of driving a Rolls-Royce Phantom Coupe.

“It is just one of the most spectacular modern cars.

It drives like no other modern car I have driven.

The Rolls-Royce Phantom Coupe has such as smooth ride.

It is a very powerful and heavy car with a real presence on the road.” Over the years, Leppan has made good money trading some of his classic cars.

In London, there are always car enthusiasts who are keen to buy some of the rarest classic automobiles from private owners, says Leppan.

“I have sold two of the classic cars over the years because I received such great offers for them.

But generally, I have not sold,” says Leppan, who loves to collect but claims he is “terrible at selling”.

Calling himself a modern day treasure hunter, Leppan says the process of hunting for the rare pieces gives him more pleasure than collecting.

“As much as I like owning the treasure, I get a bigger kick from the hunt.

It is [the thrill of] finding that lost piece.

Once you own it, the adventure is over.

As for art, when you own it, you have the responsibility to be [its] custodian.

You have to ensure that it is well preserved and look after it so that someday, it can go to someone else, be it your children or a museum,” says the collector.

“While you are hunting for it, you do not have responsibility.

It is just the adventure of finding it.”

This article appeared in the Personal Wealth of Issue 649 (Oct 27) of The Edge Singapore.

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