There’s nothing run-of-the mill about financial services entrepreneur Ian Kilbride. Having travelled from the UK to SA by road in an old Bedford truck he met a local girl, got married and has lived in the Cape ever since. We’ve known each other for two and a half decades, during which time I’ve admired his relentless focus on the matter at hand. First it was the creation, building and listing of Appleton. After being ejected from that business by his new partners, he began again and has been even more successful with Warwick. Kilbride prefers staying under the radar, but made an exception in this interview, sharing his story and sharing where he next expects to take his rapidly expanding business. Wonderful insights, specially tailored for fellow entrepreneurs . – Alec Hogg

Iām with Ian Kilbride, the man who started Warwick. Ian, youāre from the UK – how did you get to South Africa?
I was working, Alec, in 1990 in Manchester for a stockbroker called Henry Cooke Lumsden. I became slightly obsessed with elephants. I thought they were going to become extinct. I took seven months off, joined a bunch of guys from London on a 30-year-old Bedford army truck. We left in January 1990, and 22 countries later, in July 1990 ā I arrived in Cape Town.
Youāve never gone back?
Well I go back because Iāve got to go and watch Everton every now and again, but I stayed. I did the usual thing, which was I fell in love with a South African girl and decided to stay and get married. We have two fantastic boys. It didnāt work out in the end and Iām now since remarried and Iāve got two great step-children as well, so thereās four of them. Theyāre all great friends. They all call each other brother and sister, so we have a lovely family life. I got a job originally working for a small asset management company because I needed to make some money, and a year or so later, realized I could do it better myself and so I went on my own.
Thatās about the time we met, when you had a company called Appleton, which old timers will remember used to sponsor the very first business radio show in South Africa, at SAFM.
I used to live in Hout Bay, and I was driving home from the offices of Warwick, which used to be the Appleton offices. I kept hearing every evening this radio show and different sponsors and often no sponsor. I remember phoning them up and saying, āHow much does it cost to sponsor a show?ā They told me and then I said, āWell how much would it cost to sponsor the week and how much would it cost to sponsor for the year?ā They said, āWeād better send somebody out.ā They did and we did a deal and we sponsored it from that day onwards.
Itās been interesting, the Appleton story. You developed and you grew the business, Ā then listed it on the stock market. Looking back ā that didnāt have a really, good ending but take us through the story there and perhaps some of the lessons that you learnt?
We started in January 1992 from a flat in Camps Bay and grew quite quickly around the country. We were offering private client asset management and it was relatively new. I think we were probably one of only two or three people doing it. A lot of people were tied up at stockbrokers and therefore it was a very easy market for us to get. We ended up with offices in Johannesburg, Durban, Port Elizabeth, and Cape Town. By 1998, we were looking to list the company. There was the market correction in 1998 which stalled that listing. That forced us into looking for an alternative partner to join us in a listing. I think I made a mistake in the choice of partners that we went with. We then did list in early 1999. My dream was that I wanted to take it internationally and Iād found a company in London that we bought 40 percent of, a listed company called Ambient. The idea was that we would sell them our offshore business and that would give us about 80 percent of the listed vehicle. We would then reverse our listed South African vehicle into that and weād end up with an offshore London listed company. Iād been given commitment by Lehman Brothers, the CEO, he was going to back us to go out across the UK to buy up small asset management and private client companies. But the board in South Africa didnāt really want to do that. We had an altercation and I walked away and, in the end, that was the end of that. It took us a while to come to an agreement, as to what exactly or whether they should buy me out but in the end, they did buy me out.
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There are a few parallels with my own story ā also listed in 1999, also a disagreement with the board, also left. What did you do though – it was your baby, and youād invested a lot of your time and energy into it? Did you go off to a cave and lick your wounds?
I think initially, youāre quite angry because you canāt understand why they donāt share your vision or why theyāre trying to pick holes in you. At the same time youāre also going well, Iāve got to pick myself up and Iāve got to get on with it. Thereās the old adage of, itās not the fact that you get knocked down ā itās how quickly you get back up. I had a lot of good people around me, who helped me get back up and then it was like well, what am I going to do? I did the usual thing is that when I got paid out I thought I was a genius. Well look at this and look what Iāve done. Then you realize actually that I was really only given one talent and that was actually to build wealth management companies, so the management who had retained Appleton had not done particularly well. The thing basically, ended up in the hands of PSG about 18 months later, so several of those guys also contacted me, and they said, āDo you want to start again?āĀ I said. āWell, yeah, it looks about the right timeā, so in 2002 we started Warwick. It was a big learning curve because you also realize that people that you thought you could rely on, people you thought were your friends, were actually just people who were seeing you as an opportunity.
The big lessons from the breakup that you had with the company, given that youād taken a company together to another partner, and then you were the one who ended up leaving.
I think the biggest lesson is choose very carefully, who you choose to go into business with. Choose very carefully, who you invite onto your board. Choose very carefully, those who you are sharing your dreams and aspirations with because suddenly it becomes theirs, and they think they can do it without you. Going into Warwick, the second time around, Iād learnt all of that and also realized that we couldnāt do what weād just done at Appleton. Appleton was born out of cold calling. It was born out of a different type of sales environment that was not going to exist in the future, so we had to find a unique way of building the company. Thatās when I stumbled across the idea of, what we call today, the Lifestyle Network. We are the largest sponsor of bowls and croquet, bridge and senior golf in South Africa.
Senior golfā¦?
Senior golf, not as in Gary Player but senior golf as in retired guys who play golf. So Warwick got involved, and we sponsor events and we sponsor a lot of bowls clubs, croquet clubs, bridge clubs, and events. From that, people get to know who we are and then they join us and accept our wealth proposition.
Why that market because they do say that wherever you go in business you must look for a niche, and try and dominate it? Why did you go there?
Well because I think that, the type of service weāre trying to offer, always wanted to offer, appeals to the retired market. I mean they are people who have made their money and they are very clear on what they want. They want capital appreciation that outstrips inflation and they want income, so youāve got to give them both of those things. If youāre dealing with a younger market then thereās a lot more variables going on, and itās a lot easier for us to go āletās tailor a product that suits that market spaceā and itās the right space and it is the people that have the money.
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Weāre sitting here at your offices, which are some of the most spectacular in the country. Itās office accommodation at the Alphen Hotel….it is unusual. A little bit like you, a little bit like what youāve done. How did you come by this?
It was a funny story, in that our offices were in the Waterfront in Cape Town and we wanted a larger place, and a guy said to me, āThereās this company called Health and Racquet that have a head office on the Alphen Estate, and they want to get out, and theyāre going into town. Do you want to go and see it?ā I came down in January 1994, and just literally said yes ā itās got to be. It was very different then. It wasnāt as sophisticated and as well organized an estate then, as it is today, but if you just look where we are ā it personifies what it is we want to reflect to the client. It is stable. It is secure, and it is very beautiful and it is very service orientated. You can walk across the beautiful lawn outside and go to the deli called La Belle. What weāve tried to do in each region, where we have an office, as much as we can is try and reflect that feeling. Itās like an old-world, almost an English style of wealth management.
This used to be the Appleton offices as well.
Yes it was, yes.
How did you manage, when you started again, to get the offices back?
I kept the office and the bottom line is that, for a while, I sublet it. Then as Warwick grew, I put them into part of this office and then they grew and grew, and now theyāve pushed everybody else out. So this office here is entirely Warwick and then the offices down the side here, weāve got the upstairs and the end part of whatās called the great cellar.
How big is Warwick today?
Itās probably about twice the size as Appleton was, at the time I sold out. Itās 125 ā 130 people, nationally. We are probably one of the largest companies in South Africa in terms of new monies flowing into us every single month. We have specific targets that we want to meet which would hopefully double that by the end of next year. We have a very simple game plan, between 2016 and 2020, which is called Vision 2020. The idea of that is to keep growing and keep doing what weāre doing ā do it better but not try and be all things to all people. How big is it? Itās as big as it needs to be but not as big as it can be.
Is the idea you had being worked out now? You wanted to globalize, you wanted to go international…
Ā No, I think also, you probably felt it yourself with your own original plan. Every plan has a time, and it had its time. It was a perfect time to do that but that time has moved on. I know that. I have to accept that. That moment was missed. That fabulous opportunity was missed, so what Iām looking to do here is to grow a very, very strong South African company, which has got an ever stronger, international presence. We operate out of Guernsey and, also Mauritius. Weāre looking at Dublin. One day we may go onto the mainland of the UK but I mean itās a very different world today, and a lot of the ideas that I had then have since been done by other companies. In fact, Iām meeting one in about an hourās time, who are basically a reflection of what we should have been and what we could have been but no, I think you have to adapt.Ā You have to basically reconcile yourself to that plan was for then. I need a new plan for tomorrow.
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How old are you now, Ian?
I feel very old actually, but Iām 53. I turn 54 in July next year.
How long have you got still? Are you a Warren Buffett – are you going to be at it for the next 30 years? Heās in his mid-80ās.
There is sometimes when you think that I could do another ten, 15, or 20 years and thereās other times, when I wake up in the morning and Iām not sure Iām going to get through the week ā Iām only joking.Ā Iāve got a wonderful wife, who looks after me and, at the moment sheās got me on a cleanse, which means that sheās caring for me and making sure that Iām fit for purpose. I donāt know Alec, really.
Are you tap dancing every day? Are you enjoying getting up in the morning?
Oh, yes. Iāve got two sons, one is 18 and one is 14, and I would love one of those two to come into the business but Iām a realist. An 18-year-old ā when could he possibly take over a business like this? Not for another what, 15 years or more? Am I up for that? I think I am actually. I keep myself relatively fit. I look after myself, I think and Iām hoping that the next five years will be better than the previous five years, and the five years after that will be even better than that.
Are you on purpose? Do you feel that youāre on your lifeās mission?
I do actually, right now. I had a meeting earlier today, where I was explaining who we are and what we do and as I was actually saying it. I was thinking crikey, weāve actually achieved that and weāve done that, and it really does make a lot of sense about what weāre doing. It can never be perfect but I think as a person, Iām doing the thing that suits me the most. We would all like to have done something maybe more exotic, and I would definitely like to have scored a hat-trick for Everton or played rugby for England- and they need people right now – but those werenāt to be. I would have loved to have driven a racing car for a living or whatever, but those things werenāt to be. Iām from a very ordinary, a very working-class background in Warrington, which when I was born there it was in Lancashire. It is now in Cheshire because theyāve moved the border.
When you say working-class what is that?Ā
Well, my dad played rugby league when I was a little boy. My dad was a bricklayer. My granddad was a bus driver. Iāve always gone to state schools. Iāve worked hard to get through school but Iāve had that encouragement from the family. My dad bettered himself through night school, and therefore kind of challenged me to better myself, so I went to the grammar school. I went to the university. I got the LLB honors. As an aside, my school was called Appleton and my university was Warwick. People say to me, āWhy Warwick?ā I said well, when I grew up I started at Warwick. Where from here? This is my last company. This is what I do. I live it. I do eat, drink, and sleep it. Iām always thinking about how to make it better. Iām always thinking about how to please our clients and, also our intermediaries, and our introducers more.
Basically, we literally operate with such levels of compliance here at Warwick that I think weāre really cutting-edge. We have internal, external compliance. We have committees that review constantly where RDR’s going. Whatās coming after RDR? We try and place the company at least two to three years ahead of whatever is coming because we donāt want any shocks. We donāt want the clients to get any shocks. If we can make the clientās life better ā it makes me feel better.
So itās your last company – would you, (A) list again, or (B) consider selling because Warwick is at a size now, where Iām sure some people will be picking up the phone and asking?
I wouldnāt say that we donāt get enquiries. In the last year alone I think thereās maybe three people whoāve knocked on the door, and weāve been very āthank you for the interest but Iām not interested in sellingā. I donāt think you should ever say never. In terms of listing ā yes, itās always a possibility. Weāve got a fantastic management team and weāve got a far more experienced management team than I had at Appleton. Iāve got a bunch of guys who would understand how that concept would work and how weād work that better. I think one of the things is that I discovered, when running a listed company is the amount of time it takes out of your day, if you are still very, very much involved in the day-to-day activities of the company. As Iāve managed to get myself into a position now as a proper CEO and Chairman is that I know that I would have the time to do that, so I wouldnāt say no. Itās not on the cards.Ā Itās not a plan. Itās not something that weāve sat down and done any detailed planning about. What we do is just plan on growing the company, year-in/year-out and if something is right, at some point in time, then you have to consider it, donāt you?
Youāre a financial services entrepreneur. When you at how welcome Anchor Capital has been made by investors. Similarly, with Sygnia, who were recently listed as well ā itās got to be in the back of your mind, at least that those valuations seem at almost to be bubble like, in certain respects and thatās always, as an owner of a business ā thatās always the right time to be selling part of it, when the market rates you highly.
I think if you got very, very high PE ratios, where people are effectively giving you a great deal of money. Where that company can bank a large amount of capital, which have an extremely strong balance sheet, and go out and use that to expand then that makes sense. But itās not always the right time. I think things are very cyclical, and therefore if you donāt catch this particular train, then you can catch the next one and perhaps youāre even better prepared for that one. I think it would also be interesting to watch, from my perspective. Appleton was pretty much at the forefront of the listings of financial services asset management companies, and maybe we shouldnāt have been. Iād be interested to watch what happens to Anchor, particularly as to where does it go? Iām not too proud to learn lessons from other guys, so if Peter (Armitage) does a good job there and it grows, then maybe that is something that we can look at in the future.
Right now, I think we are very happy doing what we do. Weāre a wholly owned family company, independent. Weāve got great relationships with institutions, who have given us great deals that weāre able to pass onto the client. We manage all our own assets. We write all our own clientās wills. We act as our clientās executors and all we offer is investments, the Will, being the executor and a bank account, which fundamentally we act as agents for two major banks.
You are wholly owned. Is it in oneās DNA that a family business is a place that perhaps can offer better value, not only to the owner and to staff but perhaps to clients?
I think thereās some very large family businesses, which are listed. Just ask the Ackermans (Pick n Pay). The fact that youāre listed doesnāt stop it being a family controlled company. If the DNA of the business is the family, then the investors want that family to stick around. I think there are a number of different reasons why you might want to list. It might be that you need to or you want to raise capital, in terms of acquisitions. It might be that at some point in the future, it looks as though your sons or your family aren’t going to join in the business, so whatās your exit route? Is your exit route to basically then incentivize the management team?
But just keep an open mind, either way.
Absolutely.
Ian, when we have a look at the challenges that are faced, by financial services businesses like yours. You mentioned RDR a moment ago. Are you finding that there are others in the field, who perhaps want to get closer to you, acquisition opportunities, or merger opportunities, partnerships as a result of this change in regulation?
I said earlier that weāve got this lifestyle network. Thatās half of what we do. The other half of what we do is what we called the professional network, and the professional network is fundamentally IFAs who are introducing business to us on a daily basis, or IFAs that are choosing to get out of the industry. If theyāre choosing to get out of the industry, then we have a proposition that we put to them ā we think itās the best in the country, the Warwick Merger Proposition. Where, fundamentally, weād go in and weād take over their investment clients. That is also been driven, to some extent, by RDR and that will be drive, no doubt also by the products examinations that will follow RDR. I think RDR changed the landscape in the UK and itās going to change the landscape in Australia, and it is going to change the landscape here.
I think a lot of people are already aware of what they think itās going to do, and theyāre prepared for it. It is going to change the world of the individual financial advisor forever. Weāre hoping to offer solutions to them, which brings them towards the Warwick, so weāre doing that every, single day. In every region that we operation in, we have a Professional Network manager and a Lifestyle Network manager and their objective is to grow both the networks, and they report in to a regional manager, who reports obviously in to the respective MD, so keep growing those networks, means that we keep growing a source of business into ourselves. But weāre, basically offering a solution to the IFA, to say we can be your investment offering.
How many of those deals have you done in the last year?
Weāve done about 50 mergers, all in all, of IFAs coming into the company. Of the mergers in the last year, weāve done eight or nine, something like that. Weād probably want to do 15 to 20 next year, given the resources that weāve put towards it and thatās more than a company of our size could actually wish for. If we obtain that, weāre growing at exactly the rate, or quicker than the rate that weāre used to.
Clearly, itās a people business. What do you look for in your future partners? Indeed, what do you look for when you hire people?
Itās a totally different world than it was 15 years ago. We only take in CFP qualified or equivalent, within our CAT-1, which is called Warwick Private Clients. Weāre only looking to hire CFAs into our CAT-2, which is Warwick Funds and Warwick Investments,.
So get your qualifications first, before you even get in the door.
I think in the old days it was a case of hiring anybody and training them up. Now itās a case of trying to find people who have already got a qualification and then finding a way of fitting them into the team. I see that in about two to three years from now, nobody is going to want anybody to talk to them about financial services unless theyāve got some kind of badge. Whether that badge is CFP, or something equivalent to that, theyāre not going to want to sit in front of them because they want to talk to someone whoās a professional. They want to know that somebody has got a code of ethics that theyāve got to adhere to. Theyāre rather like, in the same way as a CFA, a CFP must ensure that to protect their own professional integrity, before even that of the company that theyāre working for. So that allows us to sleep at night because we know that the guys are only giving good advice.
All right, a few short ones ā favorite car?
Aston Martin.
Holiday destination?
Mauritius.
Football player?
Ever or now?
Letās have one ever and one now.
Joe Royle ā Everton centre forward. Now, I would suppose Ronaldo.
He doesnāt play for Everton though.
No but I wish he did.
Where does this Everton connection come from?
It goes all the way back to the actual founding year of Everton actually. I think itās my great-great-great grandfather was an Evertonian, and weāve always been that ever since. I mean, the Kilbrides werenāt very adventurous. What happened was that we were typical bog Irish, from County Donegal. When the potato famine hit in the 1840s the family fled to Liverpool because they were starving and then it took them about 100 years to get to Warrington, which was 30 miles down the road. But Everton is in Liverpool, and youāre either an Everton fan or youāre a Liverpool fan, and my family were Everton fans.
What ringtone do you have on your phone?
Iāve got a Samsung from about 1972 and it just rings.
Whatās your favorite share?
Everton actually, Iāve done very well out of those.
Are they listed?
Itās an OTC.
If you were to take a South African stock, is there anything that appeals to you, do you have a favorite?
Well, I donāt want to second-guess the asset management team. Obviously, weāve got our own models. I personally, I like Naspers.
Youāre in good company Cy Jacobs yesterday was telling me it is still very cheap. Your favorite book?
I donāt really have a favorite book. I know that people come up with a title ā it might seem a bit strange but, for some reason, one of the reasons I came to South Africa was because of Wilbur Smith, and then I hadnāt read any of his books for years, so I decided last year to actually read every, single one of his books. Iāve spent the last year, and Iāve just finished.
Which of those did you enjoy the most? His first one, āWhen the Lion Feedsā ā remember it was banned in South Africa, for years.
I think if you go back to the very early stuff of the Valentines and the Courtneyās ā at the moment I feel as though it is getting written very much by, I think its shadowā¦
Formulaic?
Itās a formula but heās also writing with someone else. Yeah, I have no particular favorite.
Movie?
Well, I suppose Apocalypse Now.
And if you were to have one TV series that you really enjoy that you could take with you?
My wife is going to deny it because sheās going to come up with something even more stupid but I like things like ā thereās a British TV series at the moment called Lewis, which is set in Oxford. Itās a detective series. I could watch that until the cows come home.
Is there any biography that youāve read that you felt āIād like to be like himā?
I think what I get from biographies is that there are different aspects of a person that you pick up. I donāt think thereās any one particular person that I would go and say, āI want to be themā. Iāve often said to friends and whatever, when weāre talking. Iāve said I donāt really want to be anyone but myself really. I quite like my life. I like everything thatās happened, and I mean everything thatās happened to me. I think Iāve had a really interesting life and I think as Churchill said, āIt was a great life but just the once.ā I think thereās a lot more to come, so role models ā yes, to some extent when youāre young, I suppose itās your father and watching him aspire to better things. I suppose there comes a point where youāre on your own and youāve just got to go and do it for yourself.
Last two ā your favorite living person, not in your family but outside your family?
My favorite living person, gosh. These are quite tricky questions, arenāt they?
Theyāre meant to make you think a little deeper.
Yeah, can we come back to that one?
Iād thought youād say the current Everton manager, but your favorite dead person?
Okay, back to living person?
Living person ā somebody I know or somebody Iād like to know?
Someone youād like to know. Mine would be Warren Buffett.
Yeah, I thought it might be, yeah. I think Iād like to know Richard Branson. I donāt think Iād want to be him but I think Iād like to know him. Iād like to have the ability to pick his mind and to hear the stories of how he got to where he is.
Ian Kilbride the executive chairman and founder of Warwick, financial services entrepreneur ā great to be with you.