Fast cars, philanthropy and $1.2 million
Entrepreneur’s gift will help top Kiwi students pursue overseas MBA
After being at the centre of one of the first industries disrupted by the internet, Andrew Bagnall knows what it takes to run a business — through the good times and the bad.
And he credits much of his business success — from establishing Gulliver’s Travel Group, which he sold in 2006, to his current involvement in the health sector through NZX-listed Green Cross — to the value of his MBA from Michigan State University.
So the motor racing enthusiast wants to provide that opportunity to other Kiwis by funding a suite of scholarships for outstanding University of Auckland graduates.
Bagnall’s $1.2 million donation includes two major biennial scholarships worth $100,000 each, one for a postgraduate student to study for an MBA at a top-ranked overseas university and the other a fellowship at McLaren Applied Technologies in Britain.
He is also funding short-term placements at a range of top-ranked international universities for doctoral students.
“I was originally motivated by a comment qualifying the value of an MBA: ‘If you have what it takes, it can reduce 10 years’ practical experience to two and it will give you a tremendous feeling of self-worth’,” says the 71-year-old entrepreneur.
“I’ve been well rewarded and reasonably successful in business and I put an awful lot of that down to the schooling that I got in the States.
“You have to find a way for people to open their eyes and be exposed to different ideas and different ways of doing things.
“This is just one way I felt I can give something back.”
The normally media-shy Bagnall is widely known as an amateur racing car driver who has competed in major endurance races including Le Mans, Bathurst and Daytona. He also has the distinction of owning one of the rarest McLaren F1 cars in the world — a 680 horsepower classic that he takes out for a drive once a month — and a Gulfstream private jet.
He still walks gingerly after suffering several broken ribs and a broken right pelvis in a crash at Bathurst in February, but his recovery bears the hallmarks of someone who looks after his body extremely well.
After gaining a commerce degree at Otago University, Bagnall was financed into his MBA in 1973 by travel operator Atlantic & Pacific, where he went on to work for three years following his return.
Itching to make his own way, Bagnall scraped together $4000 and started Gulliver’s Travel, which he evolved from a niche operator into a global travel provider.
He went on to float the company in
2004 and shareholders sold out in
2006 when it was sold to ASX-listed S8 for $235m in a deal that cemented Bagnall’s place on the NBR Rich List.
“It was a tough industry to be in with high volume and very small margins,” Bagnall says, recalling the significant change from the mid1990s as the travel industry became the first to be hit in a big way by the internet, and the subsequent change in the role of travel agents.
He says the skills and tools he picked up through his MBA and exposure to the overseas university environment helped him manage that early disruption.
Recent data shows America as the premier country in which to complete an MBA, with 16 of the top 20 MBA programmes globally and 53 of the top 100, according to the Economist.
While there is increasing debate
about the merits of an MBA, Bagnall is a firm believer.
“You are able to pick up more tools and ideas about the latest thinking about running businesses in the modern environment.
“But more than that, it gives you the aspirations of what you can do.”
Following his travel industry career, Bagnall set up private investment company Segoura, which manages investments in various businesses, including a 32 per cent stake in Green Cross Health.
Green Cross runs a network of about 330 Unichem and Life Pharmacies throughout New Zealand and a medical division with 30 centres trading under The Doctors brand.
Bagnall sees the health industry as a significant cause for concern as people live longer and require more expensive treatment.
“New Zealand is probably short at this stage of about $5 billion a year to provide the health services that New Zealanders want and expect. And my prognosis is it’s only going to get worse.
“The Government knows they have to keep people living at home for longer because there’s no space in either rest homes or in hospitals for them.
“The unintended consequence of that is that those homes are no longer available for resale for the general population, adding to the housing shortage.
“I envisage that the pharmacy business will evolve from just a prescription distributor to a primary healthcare facility because the Government are increasingly financially strapped in healthcare.
“They do not have enough beds in hospital; as medicines get better they are going to have to look after people even more.
“To afford what we are looking for is going to take a better process for the
private health industry to have a bigger stake in the health industry in New Zealand.
“Somewhere down the line we have to find a better balance.”
Bagnall says if he can help students gain exposure to top universities and new ideas, hopefully they will bring
some of those things back.
“I’ve been lucky and worked hard and this can hopefully enable some New Zealanders to get more and better experience than they would otherwise.
“And ultimately deliver something back to New Zealand.”