Jon Moulton has a habit of screwing up his eyes during a conversation, probably so he can look that bit further inside one’s head. You begin to understand what it feels like to be a set of badly drawn accounts.
A business wizard, Moulton has a just reputation for turning dross into gold. Having graduated with a degree in chemistry, then discovering there was no future in it, he trained as an accountant, learned how to deal with failing companies, and turned to the arcane science of alchemy, where he found his philosopher’s stone. This does not make him universally popular.
Moulton is a private equity specialist. He is very, very good at what he does, and he has made a mountain of money. ‘The Sunday Times Rich List gets it wrong. I’m worth some hundreds of millions.’ He is neither bashful nor boastful, just factual. The beans are counted as a means of measuring his cleverness at spotting opportunities, judging the risks, beating the odds, and confounding the enemy. An entrepreneur of the first order. His track record before and after he set up Alchemy Partners in 1997 shows him to be a net creator of jobs, and indisputably a creator of wealth – for himself, certainly, but also for his partners, employees, backers and those working for his investee companies. And, he says with reference to continual criticism of highly paid bosses, ‘I pay tax on everything I earn.’
He works ferociously hard, and he loves it. ‘The joy of what I do is extraordinary,’ he says. ‘The diversity of it is very stimulating: keeps my brain engaged.’
He is not a man to sit on a beach, so leisure is his vineyard in Kent, or a Carry On film. ‘Silly jokes give me ridiculous amounts of pleasure,’ he says.
A player of bridge and chess to competition standard, Moulton enjoys delving into the occult world of tax law; he delights in chewing up regulators and select committee members, but he takes a particular gleeful joy in fencing with local government jobsworths. ‘I like dealing with bureaucrats,’ he grins. He relishes a good scrap.
People love to hate him. He doesn’t care. ‘I’m insensitive,’ he says. ‘I don’t get depressed, or moody, and the only thing that makes me angry is people lying.’ Insensitive? Perhaps. Even tempered, perspicacious, and unsentimental. But not unaware of the consequences of his decisions. ‘Capitalism is not an entirely humanitarian activity,’ he says, wryly. It helps, in his business, to be able to keep an emotional distance from the feelings of people at the wrong end of hard decisions. It’s the same for surgeons.
Civil servants, politicians, lawyers and many journalists must find Moulton hard to take, since he wastes no time prevaricating, but says what he thinks; and means what he says. A plain speaker. ‘I’m very bad at lying,’ he says. ‘And I have a very low tolerance for liars.’ It is his pet hate, and he takes great pleasure in ridding newly acquired companies of fraudsters and weasels. ‘I am relatively forgiving of a CEO who says he’s got things wrong. But I have no time for the bastard who tries to hide behind false accounting. Incompetence, weakness, dishonesty – they make the decision easy. The hardest person to fire is someone trying hard but not quite able to cut it.’
More stories, of finance directors and chief executives unceremoniously defenestrated or hoist on petards they had been foolish enough to ignite.
When it comes to putting employees out of jobs, however, it is a very different story. ‘I’m dead straight about what we are going to do, and we do what we can to mitigate the losses. I am by no means unaware of the human cost. It can be incredibly painful for people, and hard to deal with when some bastard comes along and tells them their jobs are lost.
‘But often it’s a choice between no jobs and some jobs. I prefer the latter option,’ he says. Arresting a company’s slide into the depths needs swift and often brutal action, but then comes the upside, with regrowth and more jobs. ‘I love watching a good management team prosper.’
The media is quick to brand Moulton as a heartless asset stripper, but he dismisses the charge as foolish. Why asset strip for £X when there is £X00 to be made by turning the business around? Not to mention the unpleasantness it would create for his investors. Bad business. Not on his agenda.
What he prefers is the fun of a tricky challenge. Alchemy has made a name with good products or brands that have been poorly managed – Parker Pens, for instance. Slice away the gangrene, save the soul, regrow the body.
Failing to buy Rover in 2000 he still feels was a huge shame, for Alchemy, for Rover and, most of all, for Rover’s workforce. The deal went, in the end, to the sentimental option which promised a pile of gold and delivered dross. Alchemy had promised nothing, except to those people who would lose their jobs, and they were promised a decent sum and a full pension. When it was too late, former Rover workers realised that Moulton’s seemingly harsh option had been their best bet. ‘I keep meeting people who tell me they now wish we’d got it.’
He will walk away from deals, too, even at the last minute. Last minute horrors come to light; ‘sometimes it’s a good old fashioned balls-up,’ he says, ‘and sometimes excessive greed. Greedy people are easy to deal with.’ Another grin.
‘By 1997 I’d made enough money to see me off the planet in comfort.’ He has made more money through his private investments in early-stage companies than from his day job, please note.
‘By setting up Alchemy I could have fun grabbing opportunities that others couldn’t see, or wouldn’t take. I expose myself deliberately to risk, set myself up in situations where I could fail,’ he grins again. It’s the game that sets him alight. He’s a chess player prepared to play for high stakes, because he can afford to lose – that gives him a massive advantage. He is hugely competitive, but he knows when not to play.
‘I don’t think about risk, just do my best. Sometimes the decision process is a finger in the wind, sometimes a very sophisticated model. Nothing works all the time.’ Indeed, he expects to lose on a sizable number, knowing that the winners will more than make up for the fallers.
Moulton is tall, lean and fit; he regularly runs half marathons and has phenomenal energy and stamina. For much of his childhood, however, he was very ill. Undiagnosed tuberculosis for years; aplastic anaemia in his teens, overweight and unfit.
A great deal of his money is being spent on big experimental medical projects – his children are financially secure, he and his wife of 33 years are ditto, and he generates far more than he could ever spend. It’s not a sentimental choice. He wants answers – so he’s prepared to invest in getting them, for as long as it takes.
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