Intelligence

Profile: The Barclay brothers: Trappist twin tycoons let money do their talking

Times Online - Newspaper Edition

Reverse exhibitionists are known to draw attention to themselves through their very reclusiveness. Lawrence of Arabia was a prime example; some would say that the Barclay brothers exhibit symptoms of the same syndrome.
There Sir David and Sir Frederick Barclay sit in the mock gothic castle that they built on the tiny Channel island of Brecqhou, counting their £650m fortune amid opulence worthy of Roman emperors and willing to go to extraordinary lengths to protect their privacy. This secretiveness has inflated their status to mythical proportions.

However, last week the 69-year-old twins blew their cover by emerging from the shadows with an audacious deal to take over The Daily Telegraph and The Sunday Telegraph that left rival suitors fuming. After years of repelling boarders, these ideological fans of Margaret Thatcher had opened their castle doors, albeit briefly, to an interviewer from The Guardian.

Perhaps the gesture was an acknowledgment that if their £260m bid to secure control of the Telegraph newspapers from the embattled Lord Black succeeds — and they admit it is risky — they will become public figures in a way that they never were as owners of The Scotsman, The Business and the defunct The European.

Few of their friends are willing to speak on the record but this description by one is notable: “They are quite different. David is the front man and Freddie hardly speaks.

“When they are together they defer to each other all the time. They have a warm relationship with no tensions. They are mirror twins: if you look at one, the other is a reflection. One has a parting on the right, the other on the left. I think they are mirror twins in personality, too. David is basically optimistic whereas Freddie is fairly pessimistic. They act as a clever duo because they take opposite points of view all the time.”

They are already learning the perils of breaking their Trappist code of silence. On Monday David Barclay told The Guardian that the Telegraph papers would “certainly not” be the house organ of the Conservative party. Performing a U-turn the next day, he said that the paper’s editorial position would remain unchanged.

The brothers have enjoyed good relations with both the Tories and Labour. They were so taken with Thatcher that when she had left Downing Street and expressed a liking for a Belgravia home that they had sold, the twins bought it back and sold it to her for the price they had originally asked for it. Under Labour they were knighted in 2000.

It has been a momentous week for the twins. First they went hunting for Hollinger Inc, Black’s Canadian company that controls 73% of Hollinger International’s voting shares. Besides the Telegraph newspapers, this could produce £1 billion. Then on Thursday, to widespread surprise, the government gave the green light to their £590m purchase of the mail order business previously owned by Great Universal Stores, giving them 75% of the market.

Charles Garside, who as editor of The European from 1992-97 had “hundreds” of meetings with the Barclays, found them “charming” hosts and “fascinating” conversationalists. He avers that the brothers were “hands-off” proprietors and that Telegraph staff should count themselves “extremely lucky”.

However, another European employee recalls that the brothers discouraged any negative articles about Monaco, where they are partially based.

Somebody who dealt with Frederick, reputedly the gentler twin, said: “He struck me as being very charming and ruthless. And he would cut you dead if it wasn’t working out. You detect the steel there.”

Others are mystified by the brothers’ modus operandi. Philip Beresford, who compiles The Sunday Times Rich List in which the Barclays rank jointly at 34, says they are the most difficult of the list’s 1,000 entrants to value.

“There doesn’t seem to be any logic in the businesses that they buy and sell other than the simple truth that they always look for undervalued assets and are able to make them increase in value, either by running them themselves, flogging them on as part of a new package, or holding on to them and making a killing years later,” Beresford said.

Not all their purchases make money. They liked the fun of owning newspapers, although their media interests were reported to have lost £13.5m in 2001, and they enjoyed dining at the Ritz in London, which under their ownership lost £2.4m in the same period.

Having bought and sold a shipping business at great profit, the brothers evidently intend something similar with the home shopping business that they are building with Great Universal Stores and Littlewoods. Their advisers hint at another couple of imminent coups.

The twins were born on October 27, 1934 (David arriving 10 minutes before Frederick), and brought up in west London behind Olympia, first in Sinclair Road, then nearby Addison Gardens. It is now a respectable area, but 70 years ago it was a rough place, home to many prostitutes. Their parents Frederick (described as a travelling salesman in “bakers’ sundries”, originally from Kilmarnock) and Beatrice ran a small shop selling sweets and cigarettes. A contemporary, Shirley Hedges, when she was interviewed in 1997, remembered the twins as “smarmy little gits” adding: “They always thought they were better than everybody else.” They were, however, “always clean and tidy”.

It was a tough childhood: their father died when they were 12 and they left school four years later to join the accounts department at General Electric. Seeing no prospects there, they left together and picked up trades as painters and decorators.

It is thought their start owed something to David’s girlfriend Zoe Newton, a model who was chosen by the National Dairy Council to launch a £500,000 campaign promoting milk in the 1950s. But the exposure is said to have provoked the brothers’ lifelong horror of publicity.

The Barclays next popped up in 1962 as estate agents, and the following year they began owning and developing property in London. By 1970 they could boast the 170-room Londonderry House hotel in Park Lane, the 100-room Cadogan hotel in Sloane Street, and two Hyde Park hotels in Bayswater. David and Zoe, now married with three sons, were living in Kensington.

Riding out the 1970s property crash, in 1980 they were helped with a loan from Allied Arab Bank, run by Mohammed Mahdi al-Tajir, who claimed to be “the world’s richest man”. Then they mushroomed, spending an estimated £200m acquiring Automotive Financial Group, a motor retail chain, buying the Ritz for £75m and, pausing only to sell some casino interests for £68m, they snapped up The Scotsman and Scotland on Sunday newspapers for £90m and installed Andrew Neil, former editor of The Sunday Times, as chief executive.

Brecqhou, close to Sark, cost £2.33m plus about £27m for the castle, designed by Quinlan Terry. No expense was spared. According to a builder on the project, the banqueting room is 80-metres long and has a gold-leaf ceiling. The library ceiling is hand-painted, inspired by the Sistine Chapel.

Ten members of the Barclay clan live at the castle. When one of the twins’ daughters was denied any inheritance rights under an ancient tradition, the brothers took Sark’s rulers to the European Court of Human Rights and won.

Each twin is separated. Frederick had a Japanese wife, Hiroko Kususaka, and they have a daughter Amanda.

In recent years the twins have delegated their British businesses to Aidan and Howard, David’s sons. Sue Douglas, a former executive on The European, The Scotsman group and Sunday Business, says the Barclay brothers were seldom in evidence at the newspapers and left most board meetings to their sons. “Aidan was in the driving seat. He’s a witty, clever, sharp person who was a delight to work with, but he doesn’t suffer fools gladly,” she said. “Howard is more quiet, taking a back seat.”

The brothers’ judgment has been called into question when their newspapers performed political somersaults — The European with its anti-euro stance and The Scotsman by opposing devolution. They spent huge sums trying to resuscitate The European and closed it when it failed to find a market.

Despite the Barclays’ assertions that the Telegraph is not yet a done deal, the betting is that it will be in several months’ time — after they have paid considerably more money. Then they will perhaps have to face an even higher price: the loss of their privacy.

January 24, 2004 at 08:58 PM in UK | Permalink | Top of page | Blog Home