ASTUTE decisions, a willingness (and ability) to wait things out and luck are often collaborators in events of sizeable proportions.
Billionaire Peter Lim has always been patient with his investments. But in the tumultuous world of big-league global football, there is scant patience and lots of pride at stake.
Lim’s relationship with patience and fortune started with Wilmar, in the early 1990s, when the palm oil start-up endured tough times before a change in global trends saw it becoming significant in the food and biofuels industries. That wait took him almost two decades, when he cashed out in the billions in 2010.
His property acquisitions have also been slow and steady, but have grown in value as a result of industry wobbles and global economic foibles.
Lim’s other investments include medical and automotive ventures, and of course, sports, where, following bids in the English Premier League, he wound up with a controlling stake in Spanish La Liga club Valencia CF, and Salford City FC, together with former Manchester United players. He has the image rights to Real Madrid and Portugal star Cristiano Ronaldo.
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Regardless of what anyone says, football fans are not patient. It’s all about instant results and wins resulting in open-top bus parades with trophies held aloft.
“Football is probably the worst short-term business investment as you are squeezed for immediate results especially if you’re an unknown Asian entity in a traditional Spanish club,” points out football commentator and writer, Suresh Nair.
Lim, who has been angling for a football investment, would have preferred an English team, but the Spanish league has an ever growing global following. The global nature of football, especially if a team has a fairy-tale run, could send values skywards.
Lim invested €400 million in 2014 for Valencia. The club’s value, is currently pegged at half that amount. Other big clubs in La Liga are faring better. Atletico Madrid was valued at €250 in 2014, and is now up to €590 million. FC Barcelona has upped in value from €2.3 billion to €2.7 billion. (Information from KPMG and transfermarket.com)
A Knight Rebuffed
When Lim rode up to Valencia he was the Asian knight who would be its saviour providing succour. It worked for a season, and then like some of his previous investments, it has started to wobble.
The Valencia fans who adored him were quick to turn on him, demanding he now leaves. The club’s policy of selling off talent is rocking its position, which is currently above the relegation zone. The shock exit of manager Cesare Prandelli last month has compounded what has already been a topsy-turvy ride for Lim.
So, what’s the next step?
Has he found the passionate Spanish not as accepting of his methods as those in the deferential Asian investment scene? Is money enough to buy over any cultural and institutional prejudices?
From the big fish in the small pond of Asia, perhaps the global stage with its volatile currents poses a totally different game. A new strategy is necessary. Would that be spending more to buy back Valencia’s reputation? Cashing it in to focus on something else a little emotionally volatile? Or another move altogether?
Will the tide of luck turn in Lim’s favour yet again, as it has in the past?
“For Valencia’s success-oriented reputation, just like the big Manchester clubs, the fans demand dignity in results and if you have a sorry run, it’s time to minimise crowd-protests, bite the bullet and to throw in the towel,” says Nair.
“Pumping more money in is just a futile exercise. Cut losses and just leave,” is Nair’s advice
Given Lim’s determined ways — he worked several blue-collar jobs to get his degree in finance and accounting from the University of Western Australia — and means, he could be doggedly digging in for the scrapes on and off the pitch. It’s going to be worth watching how his valiant Spanish saga pans out, and if his strategy plays out to plan.