The British press routinely uses the words “the investment club for the wealthy” while describing the private equity firm Pi Capital. The description is apt. The firm has 300 very wealthy and well-connected people as members of which 80 per cent are based in the UK and the rest are from all over the world. This access to such wealth and contacts has made its CEO David Giampaolo a highly sought-after man. Giampaolo’s take on the green shoots that have been said to be emerging in various parts of the world is to be taken seriously. He says, “It is very important for us to build a sustainable business. We are at a size globally where we can say no. Some of the best deals that I have done are deals that I did not do.”
While that may sound like an oxymoron, but Giampaolo’s investment accumen cannot be taken lightly. At the age of 15, he launched his career mowing grass for his neighbours in Florida, US. By 16, he had dropped out of school. For anyone else this would have been a sure-fire recipe for diasaster, a lifetime of living maybe on dole or doing menial jobs. Giampaolo, on the other hand, landed on his feet. Realising that the lawn mowing business did not interest him, he decided to become a gym instructor. He recalls, “I was already exercising a lot.”
Not many gym instructors end up owning the world’s largest health club business but Giampaolo does today. Fitness First, which has a presence in 21 countries (this was a 835 million pounds leveraged buyout with BC Partners and Pi Capital among others) which entered India last year is owned by Giampaolo and one of the reasons that he frequently travels to India. Tracing his trajectory from gym instructor to owner, Giampaolo tells us, “In 1975, I opened a gym in Florida with a friend. Then I decided to move to the UK to open the country’s first American style gym.” Giampaolo, already then armed with more gumption than money wrote to Princess Diana asking her to inaugrate the club.
And she did. How did he pull this one off, I ask Giampaolo. “Sometimes people don’t know that it’s just enough to ask,” he says. That early success with inviting such a big celebrity has seen it being later translated into a full-fledged division of his investment firm. When Giampaolo bought Pi Capital in 2002 (it was set up in 1998), it was just a vanilla business. Giampaolo decided to add the club side to the firm with great success.
“All wealthy people have the same interests. Making money, travel, philanthropy, the arts, wines are common interests of all Pi members”, says Giampaolo. Then he adds, “People like to join peer to peer networks. That’s how I am able to attract such an elite group of people.” The club side of Pi Capital ensures that the member’s interest is catered to with some of the most famous people who are at the peak of their careers talking and interacting with them at specially crafted events. Former managing partner Jon Moulton of private equity firm Alchemy, Jeffery Immelt, actor Kevin Spacey (now at the Old Vic in the UK), Jim O’Neill, head of global economic research for Goldman Sachs, Hernando De Soto, president of the Lima-based Institute for Liberty and Democracy (called one of the most important think tanks in the world by The Economist), Willie Walsh, CEO, British Airways, are just some of the speakers at Pi events.
If the club events are a mix of fun and serious, the investment side of Pi Capital is hardcore. Some of its direct investments include buying the controlling stake in Intelsat, which is the world’s largest commercial satellite communications provider.
Overseeing his investment in Fitness First isn’t the only reason that brings Giampaolo to India. Already there are some Indians who are part of the 300 members of Pi Capital. Giampaolo is looking to start an India chapter of Pi Capital in the first quarter in 2010. Without divulging too much, he says that it will be run by Indians. For Giampaolo, India remains, despite the downturn a very attractive investment destination. He propunds, “India’s potential is vast. There are lots of businesses that are starved of know-how here.”
The way Pi Capital functions is that Giampaolo and his team pick and choose investment opportunities for the members who are then free to decide for themselves. The industry sector is also selected on whether there is a Pi member whose experience and expertise can be counted upon to make the investment a success. Giampaolo personally invests in every deal. He says, “Almost 70 per cent of our deals are successful.” Each investment has a term of between three to five years. What Pi Capital also brings to the table is managemnet skills and the acumen of its 300 members.
Now 50, Giampaolo says that he is wiser than he was when he started out. He says somewhat self-effacingly, “I know a lot more than what I knew then. I am more grounded today. I think differently today.” This remark comes on the heels of an earlier statement on his financial decisions earlier in life: “From the age of 17 to 43, I started and managed over 10 different companies which were all in the health and fitness segment. Now my investments are more diversified.”
Being wiser may have something also to do with the fact that Giampaolo doesn’t behave like a know-all. He asks questions, and then spends time carefully listening to the answers. Unlike many foreigners already invested in India or looking to invest, he comes with no arrogance.
A father of two children aged 10 and seven, Giampaolo likes spending time with them. One of the biggest areas of interest for him like other members of his firm, is philanthropy. He combines his interest in charity with art by buying some amount from charity auctions. He says, “I collect a lot of new-name art. I buy art for enjoying it.” If you press Giampaolo for more on what he does with his spare time, he speaks like someone who has a strong work ethic, he says, “I am a business mentor for new entrepeuners. I am a huge fan of entrepreunership.”
Not a surprising statement from a man who basically worked hard at being an entrepreuner himself and today is one of UK’s most well-connected persobs. And with his eye firmly on India (“India has so many more opportunites than China”), we are likely to hear much more from Giampaolo and his very successful brand of wealth creation.