Business and Finance

Family business: Ben Keswick’s grand plans to modernise Jardine Matheson

By his mid-twenties, Ben Keswick was being groomed to run the enterprise his household has led for 5 generations in Hong Kong and became a $50bn pan-Asian empire.

This week, aged 48 and fewer than two years into his position as taipan — or prime boss — of Jardine Matheson, Keswick has pulled off one of the biggest corporate restructurings within the firm’s historical past.

The deal, through which the Jardines group will purchase out the shareholders of its second-largest enterprise unit for $5.5bn, might add huge sums to the Keswicks’ multibillion-dollar fortune and that of two different households linked by marriage, the Weatheralls and the Jencks.

Yet it additionally presents dangers for the 190-year-old enterprise. Keswick will unwind a convoluted cross-holding construction devised by his uncle, Sir Henry Keswick, within the Nineteen Eighties to defend it from the specter of a hostile takeover. The set-up allowed the descendants of the group’s founding household to management an enormous conglomerate whereas holding solely about 17 per cent of the inventory.

Keswick is making an attempt to “modernise the business at an urgent pace” stated one confidante, an adviser to Jardines’ board.

However, “it creates a more conventional set of risks”, the particular person added, “the largest being what happens if they don’t deliver the numbers in two or three years”.

A canny deal for Jardines

Jardine Matheson’s dominance is felt all through Hong Kong. Its sprawling property within the metropolis embrace a few of Hong Kong’s most costly industrial properties and its greatest manufacturers, such because the Mandarin Oriental resort. Elsewhere, its holdings vary from Vietnam’s largest dairy producer to a small cement maker in Thailand.

Jardine Matheson’s intensive holdings in Hong Kong embrace among the metropolis’s prime industrial properties, such because the Mandarin Oriental resort © Alamy

But its huge portfolio has attracted criticism. Jardines is “in around 28 totally uncorrelated sectors acquired by Henry [Keswick] over the 47 years he was at the top of the firm, and it’s really hard for anyone to articulate why”, stated one adviser to the enterprise. “Under Ben, you’ll start to see them manage their portfolio with a sharper focus on sectors and return on capital.”

The Keswicks have managed the group for 5 generations since Thomas Keswick, from Dumfriesshire in Scotland, married the niece of Scottish dealer William Jardine, who had began a service provider enterprise in Hong Kong to commerce tea and opium.

But holding the household on the helm has required some politically unpopular strikes. Jardines angered Beijing within the mid-Nineties when Henry Keswick relocated its Hong Kong inventory market itemizing to Singapore amid considerations in regards to the territory after its handover to China in 1997.

Keswick inherited the chairmanship from his uncle, Henry, who retired aged 80. “Ben is a consensus leader where Henry was a conviction leader,” stated one particular person shut to the enterprise.

Henry Keswick, former chairman of Jardine Matheson, and the fourth era of Keswicks to management the conglomerate

Henry — who has been described by the FT as a “tall, round-faced Old Etonian with a courtly air and a mischievous sense of humour” — didn’t have any kids, leading to a succession battle that pitted Ben in opposition to his cousin, Adam, a board director of Jardines.

“I’m sure Adam was upset but I haven’t seen any problems between the two,” stated an government who advises the board. “They have a very good working relationship and together have masterminded the restructuring.”

The overhaul has to this point been seen positively by the market. Shares within the group rose 15 per cent after the announcement and have continued to climb.

“It was certainly a good deal for Jardine Matheson,” stated Hugh Young, Asia head of Aberdeen Standard, whose stake in Jardine Strategic can be purchased out at $33 a share. “It was arguably worth a lot more”.

How to future proof a conglomerate

Keswick is seen by allies and individuals who know him as each “bright” and “paranoid”.

“He has a strong sense of duty to the company but also knows their history cannot define it,” stated one ally.

In widespread together with his uncle, stated associates, Keswick has not made a taboo of the corporate’s position within the Sino-British opium wars. Both have approached constructing a relationship with China — which is essential to Jardines’ future in Hong Kong — by being upfront about their household’s previous.

“We have had long discussions about Jardines’ history in the opium trade,” stated the chairman of a serious monetary providers agency who has labored with the group for some years. “[Ben] doesn’t take himself too seriously in those discussions.”

Keswick, who lives in Hong Kong together with his spouse, Martha, and 4 kids, is “intensely private”, in accordance to one buddy. He has by no means given a media interview.

Now, his greatest problem is future-proofing Jardine after a big hit to its property and resort portfolio through the pandemic and following two years of political crisis in Hong Kong, the place it makes greater than a 3rd of revenues.

He has made a lot of decisive moves since taking on in 2019. Among them was appointing a “fresh blood” board that features Stuart Gulliver, the previous chief government of HSBC, and Anne O’Riordan, ex-head of life sciences at Accenture, who has been tasked with overhauling the digital technique of Jardines and its portfolio corporations. Previously, its board was dominated by former executives of the corporate and members of the family.

Keswick has additionally created Jardine’s first funding committee, quashing a cultural hangover from his uncle’s tenure that meant the chairman had closing management of all funding choices. This week, he additionally introduced a strategic funding partnership with Chinese non-public fairness agency Hillhouse Capital.

In a 2016 article in Jardines’ firm journal, Thistle, he wrote about his ambitions for bringing the enterprise into the twenty first century. “Once we have taken that first step, there is no looking back . . . We just need to face the future and give it a go.”

Five years on, the way forward for certainly one of Hong Kong’s oldest enterprise empires is squarely in his fingers.

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