Billionaire John Caudwell likes to play the tough guy. Caudwell suffered a horrific-sounding injury to his right arm while skiing moguls on the Colorado slopes recently. Forced to go under the knife, the founder of mobile giant Phones 4u had a mirror placed by his head to watch the surgeon reattach a ripped tendon. “Fascinating,” he smiles to the disbelief of his public relations handlers.
Gruesome, more like. The tendon had rolled up to his shoulder, meaning Caudwell watched on as the doctor wriggled his fingers behind the skin covering his biceps to pull the sinew back down.
He was offered a general anaesthetic but accepted only basic pain-killers. “It just felt like a toothache or a severe headache,” he grins, clearly enjoying the grimaces of his entourage. The strangest thing, he adds, was that when the doctor drilled through bone in his forearm, there was no pain at all.
Gory arm injury aside, Caudwell is the picture of health and wealth as he kicks back in a sixth-floor suite at the Dorchester. Trim, fit as a butcher’s dog, lightly tanned and looking a good decade younger than his 57 years, Caudwell seems to have made good on his promise to enjoy life after selling Phones 4u in a £1.46bn deal four years ago.
Yet Caudwell has been busy on five businesses, including an imminent, startling comeback to the mobile phone industry. “I said I was going to sail around the world, but I barely managed to row across a lake,” he joshes, a hint of a Midlands accent betraying his Stoke-on-Trent roots.
Caudwell was one of the country’s most famous entrepreneurs, opening his first Phones 4u shop in 1991 and selling out to private equity giants Doughty Hanson and Providence when he sensed an impending recession. At his leaving do, Caudwell dished out £3.5m in cheques to loyal staff.
Since then, he has been more famous for his lavish parties. Leona Lewis, a former winner of The X Factor, sang at his daughter’s birthday; Diana Ross wowed the crowd at the 40th birthday of his partner, Claire Johnson, while Whitney Houston and Rod Stewart have sung at the annual ball supporting his children’s charity.
However, he scoffs at reports of astronomical appearance fees, such as the £1.7m he supposedly splashed out on Houston’s performance. “Elton’s doing the ball free of charge this year,” says Caudwell, presumably referring to John rather than Ben.
The eagerness with which he speaks about his forthcoming venture suggests he will soon be famous as a businessman again rather than an event organiser. “It’s a long shot. It isn’t fully proven,” he admits, before almost frothing at the mouth with enthusiasm. “But it’s exciting, innovative and has the most potential of my businesses [which include wealth management, boat engine and property empires], with real global potential.”
Caudwell tries to cloud his plans in mystery, but discloses quite a lot. He has ploughed £1m into a mobile phone application that facilitates instantaneous financial transactions with a simple code.
This has proven to “transcend that function”, claims Caudwell, and the developers are currently soft marketing the software with some potential customers. If successful, Caudwell is likely to pour a lot more of his fortune into developing a product that he believes could eventually be worth billions.
What is likeable about Caudwell is that he does not overplay the rags-to-riches stereotype with which he has often been tagged. Yes, he started with little, but he was not the down-at-heel second-hand car salesman, as is often portrayed, when he spotted some brick-sized mobile phones in an electronics shop in 1987.
He was a millionaire, with about £1.5m to £2m in the bank, before he was 35. The big cash started rolling in a little later, which Caudwell thinks helped to keep his feet on the ground.
“I started to make serious wealth in my forties, which are probably your vintage years. Then you still have a lot of energy, but also the experience of making mistakes. If you’re wealthy and famous at a young age it can be a bit of a disaster.”
That experience has helped Caudwell to keep his money intact. Hiring a roster of bankers, whom he meets on a quarterly basis, Caudwell has not been too badly hit by the economic downturn.
A particularly wise move was pulling £400m out of American insurance giant AIG shortly before its liquidity crisis in September 2008. Making only 0.1 to 0.2 per cent more out of his investment than he could in the wealth fund of a typically safe bank like Barclays or HSBC, Caudwell decided to grill AIG as to whether his investment faced much risk. Not surprisingly, he was told that all was well, but then he asked what would happen in the wake of a geopolitical crisis that wiped more than 20 per cent off world markets. AIG admitted that investors would start taking their money out and that was enough for Caudwell to move his cash elsewhere.
“It [the investment] went from being bulletproof to having way, way too much risk in a few questions,” he says, clearly relieved by his decision.
Another pitfall avoided was a rescue bid for Birmingham van-maker LDV last year. He tries to play down the seriousness of his intentions, which were widely reported at the time, before speaking with enough authority to suggest that he had gone through the books quite thoroughly.
“It was massively overstated. I knew jobs would be lost and I couldn’t help but wonder if it was worth having a look at. But it was pointless. If I wanted LDV’s balance sheet to be worth 100 in order to go for it, the figure came out at about five.” Caudwell clearly wanted to save a company that was part of the community where he grew up, but when it comes to big business he is shrewd rather than romantic. This is demonstrated by his answer to whether he has any regrets about selling Phones 4u, which has since been forced into some redundancies.
“It was a bit like selling my child,” he concedes. “It took a long time to come to the conclusion and it was a traumatic sale period, with multiple private equity groups trying to get their heads around what had become a complex business. But having made my decision, I never regretted it for one second.”
Caudwell smiles, leans back, his arm draped behind his chair in the confident manner of a Simon Cowell. It is the contented look of a man who can afford a £1m punt on a long shot.
John Caudwell is the guest speaker at the Penfolds Vintage Years event at the Hospital Club in Covent Garden on Thursday; www.penfolds.com
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