Amit Bhatia: "I have an immense amount of faith in the UK economy"
11 min read
05 August 2013
Real Business talks to Amit Bhatia about football, investments and his plans to bring a new energy to the very traditional construction industry
Amit Bhatia is perhaps best known as the vice-chairman of QPR football club, or as the son-in-law of billionaire Lakshmi Mittal, who was until recently the wealthiest man in Britain.
But with his recent investment in Hope Construction Materials he’s excited about the opportunity to make a name for himself in one of the most traditional sectors of the economy.
Bhatia hasn’t always been an entrepreneur. He began his working life in the financial sector, working for Morgan Stanley in New York and Credit Suisse First Boston in London.
Whilst he thinks his background in banking was a great way of learning about investments, the plan was always to go out and create something new. In 2005 he decided to strike out on his own, launching Swordfish Investments, a private equity fund.
“The eventual goal always was to try and branch out and do something on my own, to go solo – for lack of a better term,” he says. “I’ve always been quite entrepreneurial and independent and I’ve always wanted to feel like I’m creating value.
“It’s really my desire to embark on an entrepreneurial journey which was, I always felt, my calling. It’s something which really excites me and so that’s why I made this journey across.”
Through the fund Bhatia has had the opportunity to dabble in sectors as diverse as healthcare, media, technology and education.
He says: “I’ve always kept my investment mandate very broad. It shouldnt really matter where you invest. If it makes money then you’re doing the job properly.”
He comes across as somebody who is very passionate about his portfolio and the people he gets to work with.
Hope Constuction Materials
One of Bhatia’s latest and biggest investments has raised a few eyebrows. An opportunity to enter the construction industry came about thanks to the merger of Lafarge and Tarmac, which was announced last year.
After the move was referred to the Competition Commission, the two giants were forced to offload a significant part of their operations to keep the market competitive.
As a result Hope Construction Materials was formed, with Bhatia as executive chairman.
This was, no doubt, a gamble. The construction industry has been a particular loser from the recession. But he says that the whole entrepreneurial challenge comes from looking at things in a new way.
“As a person, and as a family, we’ve ways tried to be entrepreneurial. A time when nobody else is looking at the sector, that is where the real opportunity lies,” he comments.
Of course that’s all well and good, but for an industry like construction materials, which relies so much on the rest of the economy, there has always got to be wider consideration of the way things are going nationally.
“This is a major play on the direction of the economy,” he says. “You can’t make this investment if you don’t have great faith in the economy.
“If you look at the heights of 2007 compared to now, many parts of the industry are down. There’s no doubt that we’re far from getting back to those levels. But we are starting to see green shoots appear, positive indicators. We’re hearing the same from customers, suppliers and even competitors.
“We now have an immense amount of faith in the UK economy, the resilience of the economy and the passion and the talent of the people who work here.
“The UK has really solid people who receive a fantastic education, are able to get great exposure and experiences in life so that they learn and grow.
“It may not have double digit growth like China, India, Brazil and these other emerging economies, but the trade off is the fact that there is a wonderful working culture in this country and there is an efficient process, with checks and balances,” he adds.
Financial liquidity is a big problem for a lot of growing businesses at the moment, but Bhatia believes that a little prudence is not bad thing.
He comments: “Whilst credit is not easily as obtainable as before the crisis, that’s good for the market. Good Strong customers, clients and suppliers will always receive levels of credit that are good.”
And the government’s role in the economy is also key to the recovery of the construction sector. Bhatia says that continued commitment to spending on capital infrastructure is critical, but that we need to wait and see how pledges made in a speech will filter out into the real world.
Ultimately whilst the economy is nowhere near as active as in 2007, I get a real sense of optimism from him about Britain’s future prospects.
Growing a business
This optimism may not have seemed quite so sturdy when Bhatia took the reigns of Hope back in January, though. The industry had already suffered a cold and difficult winter and Hope started the year with an empty order book.
The management team also had to deal with the problems of working over two separate IT systems, a legacy left over from Tarmac and Lafarge.
But, six months on, Hope reached a milestone of having sold a million cubic metres of concrete. And sales volumes are continuing to increase.
The company recently became the first British construction firm to be inducted into the World Economic Forum’s Global Growth Companies community, which recognises businesses with high growth potential.
Bhatia says this success is partly down to bringing a new and entrepreneurial attitude to the industry.
“When you’re the first player in a business for ten years you can do things differently, think outside the box, set new ideas and values and take a fresh approach,” he says.
He says that to really understand what their customers really wanted from a supplier, Hope went out and asked stakeholders what core values matter to them. This led to the creation of the company’s four core values: reliable, understanding, entrepreneurial, responsible.
Construction is obviously a very traditional industry, but Bhatia seems confident that, with Hope, he has a real opportunity to shake things up.
He comments: “The opportunity exists to take something that’s so old and traditional, like a business that sells cement and concrete, and to actually revolutionise how it’s done, change the industry for the better. And that is such a huge motivating focus for me and for the entire business.
“We don’t want to be like our competitors, we want to be unique as a business, we want to be dynamic, and we want to think outside the box.
“We feel so much passion because we see the progress we’re making and we know we can do things better than everyone else out there. Every day we are shaping the destiny of our business and that is extraordinarily exciting. If that doesn’t get you pumped in the morning then nothing will.”
Queen’s Park Rangers
One of Bhatia’s most high profile business interests is QPR football club, in which be bought a stake in 2007, and currently serves as deputy chairman. He doesn’t see this as a normal kind of business opportunity though.
“I don’t view football as a business at all,” he says. “I mean, it’s a business in that it should be run in an efficient manner and clubs must learn to live within their financial resource bases.
“But at no point would I recommend people to invest in football as an investment! It should be viewed as an investment of passion not of monetary gain.”
And what of his relationship with his father-in-law, who also holds a stake in the club?
“Lakshmi Mittal is my role model,” he says. “I try and see him as often as I can. He’s obviously a very busy man but always available when I have a question or need some guidance and advice.
“As far as role models go I think I’ve got the best one.”