Sport­ing chance

The Australian - The Deal - - Front Page - In­ter­view by: Glenda Korporaal Pho­to­graph by: Nikki Short

Swans chair­man An­drew Prid­ham on in­vest­ing – in business and sport

AN­DREW Prid­ham is an in­vest­ment banker who worked for UBS and JP Mor­gan be­fore set­ting up the Aus­tralian arm of New York-based in­vest­ment bank Moelis five years ago. A pas­sion­ate Aus­tralian Foot­ball League fan, he took over as chair­man of the Syd­ney Swans last De­cem­ber after hav­ing been on the board since 2002.

How are you en­joy­ing be­ing chair­man of the Swans?

You can’t re­lax at all dur­ing the games, even if you are win­ning. It can be very stress­ful. Any­thing can hap­pen. I had a pretty good ap­pren­tice­ship as a di­rec­tor un­der (for­mer chair­man) Richard Col­less.

The AFL grand fi­nal is ap­proach­ing, on Septem­ber 27. How much is foot­ball man­age­ment like business?

Foot­ball is very dif­fer­ent to the business world in ev­ery as­pect, from the draft through to the salary caps. It’s a highly reg­u­lated en­vi­ron­ment. You have your set in­dus­try com­peti­tors – in the AFL it is 17 com­peti­tors – and then you have the other foot­ball codes all com­pet­ing for fans, me­dia time, and spon­sor dol­lars. There are sim­i­lar­i­ties in terms of business but just be­cause you are in business you shouldn’t think you can run a foot­ball club.

But let’s face it, the Swans are not broke. They are a class team.

It is a great time to be in­volved. We have a record mem­ber­ship, a record spon­sor­ship. Our TV au­di­ences are blitz­ing it. We are hav­ing crowds of about 34,000 for home games – the best since 2007. Our mem­ber­ship is 40,126 and in­surance company QBE has just re-signed as spon­sors un­til the end of 2019. It’s in­cred­i­bly im­por­tant for us.

How much work is it be­ing chair­man of the Swans?

You don’t just turn up at game time and sit in your seat. There’s a lot around the game, par­tic­u­larly the away games. There are al­ways team com­mit­ments and a lot of me­dia com­mit­ments. Dur­ing the week things pop up that you don’t ex­pect – things that have to be dealt with. Some­one says some­thing neg­a­tive about the club and you need to deal with it be­cause it is dam­ag­ing the brand. There’s a lot of emo­tion in foot­ball – from the sup­port­ers to the play­ers and the staff and the other clubs. It’s not just about dol­lars and cents. It’s about pride and in­tegrity. No one gets paid to be a Swans di­rec­tor. It’s a labour of love. There’s a def­i­nite ex­cite­ment and an elec­tric­ity about the Swans. We are ex­tremely im­por­tant to the AFL broad­cast rights. In 2013, the Swans were the most watched team on Fox­tel of any code na­tion­ally. We have al­ready had more than four mil­lion view­ers on Fox­tel so far this year.

“There are sim­i­lar­i­ties be­tween business and foot­ball but just be­cause you are in business you shouldn’t think you can run a foot­ball club” An­drew Prid­ham, in­vest­ment banker and chair­man of the Syd­ney Swans

We have the most dig­i­tally en­gaged mem­ber base in the coun­try. The Swans have a mil­lion sup­port­ers na­tion­ally, ac­cord­ing to (mar­ket re­search firm) Roy Mor­gan which is the high­est of any club. Colling­wood has 840,000. It has been a lot of hard work.

What was it be­tween you and Colling­wood pres­i­dent Ed­die McGuire?

The is­sue is fin­ished. I don’t need to go on about it. I have said my piece, and he has said his piece. We will move on. Ed­die is … om­nipresent.

How did you come to work for Moelis?

I was at UBS for 13 years. I ran in­vest­ment bank­ing and then I went over­seas to be closer to the global real es­tate mar­kets. When I came back to Syd­ney I went on the Swans board. A few clients asked me to help them and I was work­ing harder than I had ever worked. Then JP Mor­gan bought the business and I was ex­ec­u­tive chair­man of JP Mor­gan Aus­tralia for six years. Then (veteran Wall Street in­vest­ment banker) Ken Moelis ap­proached me and asked if I was in­ter­ested in work­ing with him in Aus­tralia. I never met him at UBS. He started there just as I left. I liked him from the mo­ment I met him. He kept call­ing me. I said I only want to do it if I think the struc­ture is right for this mar­ket. I wanted the lo­cal man­age­ment to own 50 per cent of the business, which he agreed to. We have 65 ex­ec­u­tives in Aus­tralia. If you are go­ing to at­tract the best tal­ent from the global in­vest­ment banks you need to give them skin in the game. We have an in­vest­ment bank­ing business but we also have a stock­broking business which Moelis doesn’t have in the US. It’s partly be­cause we want the re­search func­tion and the sales func­tion for our mar­ket in­tel­li­gence.

What deals has Moelis done in Aus­tralia?

We have just done the float of a funds man­age­ment business called Elanor. We did the spin-off of Shop­ping Cen­tres Aus­tralia from Wool­worths. It has done very well. We do a lot in the small cap space; we do a lot in the prop­erty space. We acted for SAB Miller when they bought Foster’s. We are ad­vis­ing Grayson­line on a $220 mil­lion merger. It is a back­door list­ing of the company through a merger with (on­line shop­ping web­site) Deals Di­rect.

You have also done a lot of cor­po­rate re­struc­tur­ing?

We did the re­struc­tur­ing for Cen­tro, Chan­nel Nine, Atlinta, Re­liance Rail. (Tas­ma­nian forestry company) Gunns has been the most re­cent. Some of th­ese trans­ac­tions can take three years. The lead time is very long. It’s a very spe­cialised piece of the mar­ket, of which we are the mar­ket leader by a long way.

You are known for your ex­per­tise in prop­erty. At JP Mor­gan you were ad­vis­ing shop­ping cen­tre group Cen­tro which ex­panded rapidly in the boom but was hit by the global fi­nan­cial cri­sis. Any lessons

from that?

It was the per­fect storm for Cen­tro. They had made a ma­jor ac­qui­si­tion. They had a bridg­ing fa­cil­ity, which in the or­di­nary course of business would have been re­fi­nanced. Then the fi­nan­cial cri­sis hit and you couldn’t re­fi­nance any­thing. Clearly there are lessons there. You can’t as­sume any­thing. To say it was un­lucky would be an un­der­state­ment. The fact that Cen­tro is still alive and didn’t go into ad­min­is­tra­tion, whereas a lot of other prop­erty com­pa­nies did, prob­a­bly tells you some­thing about the qual­ity of the un­der­ly­ing as­sets. But the les­son is to have a Plan B and a Plan C

Which deal has been the hard­est for you?

They are all hard. In­vest­ment bank­ing is harder than it was 15 years ago …

You have just launched a fund chaired by Seven’s Sun­rise host David Koch?

We want to build up the as­set man­age­ment side of the business. We have a fund aimed at Sig­nif­i­cant In­vestor visa in­vestors from over­seas. We have just launched Global Wealth Part­ners. It is aimed at re­tail in­vestors, in­clud­ing peo­ple man­ag­ing their own su­per­an­nu­a­tion funds. Most of them are heav­ily in­vested in the Aus­tralian mar­ket. It is in­vested in four US hedge funds. We want to give Aus­tralian in­vestors ac­cess to high qual­ity fund man­agers based in the US who are in­vest­ing glob­ally. I am a strong be­liever that the Aus­tralian dol­lar is over­val­ued and it will cor­rect. It’s just a mat­ter of time. Most of my own per­sonal money is in­vested off­shore. I have known David Koch for a long time. He’s there for over­sight and in­de­pen­dence – to keep us hon­est as a man­ager. It is not a mar­ket­ing role; it’s be­cause of his ex­pe­ri­ence in the fi­nan­cial world and with fi­nan­cial plan­ning.

You have been an in­vestor in art, but you got your fin­gers burned buy­ing a paint­ing you thought had been done by Brett White­ley but ended up be­ing a fake …

Re­gret­tably. I love Aus­tralian art and I col­lect it. But I am a lot more care­ful now. There are a lot of prac­tices that go on in the art in­dus­try that if you did them in the business world, you would be in prison. There are a lot of good peo­ple in the art world but there needs to be sig­nif­i­cantly more reg­u­la­tion of the in­dus­try.

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