GIVEN the current anxieties about the UK, and especially around London as an investment hub, the obvious question for Amit Bhatia – whose Swordfish Investments is a global investment fund – concerns his plans post-Brexit.
“Throughout its history, this little island of ours has found ways to innovate, solve problems and remain resilient,” he says. “We must navigate choppy waters in the short and medium term, but I remain a firm believer in UK plc and in the city of London.”
It’s a revealing answer, both about Bhatia’s personality and also his philosophy of investing –have patience, ride out the storm, absorb any losses and plan for future returns.
Bhatia is a true-bred Londoner, born here and living here, despite his Indian background and family ties (the Mittal empire son-in-law and scion of a rich Delhi real-estate clan), his Ivy League Cornell University education, and his New York financial career (cut short by visa headaches after 9/11).
He’s football crazy, and was vice-chairman of Queen’s Park Rangers until he quit in 2009 after falling out with co-owners Bernie Ecclestone and Flavio Briatore over their plans to hike season-ticket prices – and also because of loyalty to his friend Ishan Saksena, the club’s CEO forced out in the struggle.
It was a commendable stand. He returned two years later when Tony Fernandes bought out the others. Patience again. Then in August, Fernandes moved on, saying the club needed a London-based chairman, and Bhatia stepped up.
The cost of his wedding to Lakshmi Mittal’s daughter Vanisha in Versailles being triple that of Prince William’s is the stuff of clickbait legend, but as Bhatia has previously said regarding a style of life which is simply part and parcel of the circles he moves in: “Can we not talk about it please, it is not important.”
Over the years, many have dwelt on how young Bhatia appears to be for what he does. It’s true he appears eternally fresh-faced, but he turns 40 in September 2019, a milestone which should at last lose him the “boy wonder” tag and allow serious analysis of his method and outlook. He has dropped a few clues about how he thinks, as a self-described contrarian investor – the pre-requisites of which include not only patience but also nerve and imagination.
Bhatia adored Cornell and a strong connection with the New York institution (“probably the best four years of my life”) to the extent that there’s now a campus coffee shop named after him – the Amit Bhatia Libe Café – following a $500,000 donation to the university library.
Instead of “pursuing the rat race of life” in Manhattan, after his graduation he took almost a full year out for charity work in Ecuador, something he waves away by reference to his grandmother’s work for the Red Cross.
This was the behaviour, one might conclude, of a budding contrarian. Hints he has given since then – “back the jockey, not the horse”; “we endeavour to partner with people who know more than us and are smarter than us” – suggest he views the world differently from those who bet on horses and derive an ego-boost from shouting orders.
Bhatia is a believer in “nazar” – that you risk disaster by mentioning plans loudly enough for the fickle gods to overhear – and this shows a similarity with investors such as Nicholas Nassim Taleb and Mark Spitznagel. They too understand black swans (mass in the extremes of the frequency distribution or, if you prefer, the gods triggering a fateful event) and know the herd will inevitably thunder over the cliff. When Bhatia says, “if you protect the downside, the upside will take care of itself,” he sounds like Warren Buffet saying that the first (the only) rule is – you must survive.
It’s this patience and willingness to tough things out, in the certain knowledge that eventually your watertight downside will bring forth a disproportionate upside, that marks Bhatia out as special. He is not a speculator chasing the hot thing: “I made less money compared to other people when the market was bubbly and buoyant because I was always a conservative investor,” he admits.
But when the others blew up, he thrived: “So in 2008-9 when the market turned, we did much better than our peers. We actually delivered positive returns when the rest of the market lost money.”
Bhatia has been very active lately, it turns out. “It’s been a busy and exciting year… The launch of our new real estate fund Summix Capital Partners, and the investments we’ve made in strategic land sites across the UK and Ireland rank among my most important investments of the past 12 months,” he says. “We aim to be a solutions provider to the UK’s housing shortage and have acquired almost 20 sites we hope will deliver several thousand new homes and student accommodation units across the country.”
Property is one area for Swordfish and media is another. Patience has now paid off in this sector too. “The sale of B4U, our movies and music network, to Abercross,” Bhatia cites as more good news – a deal of around £20 million which saw the successful Asian broadcaster and producer find a new home with former England cricketer Alex Loudon’s holding company.
Foreseeing the gin revolution, Bhatia had bought US “pre-Prohibition” style craft brand Aviation, which some say is the best gin on the planet, and has now sold it to actor Ryan Reynolds, who will be working to promote it with Davos Brands.
Bhatia sold most of his interest in Hope Construction, which he created by amalgamating Tarmac and Lafarge back in the economic doldrums of 2013 (that’s why he called it Hope) to Breedon Group in 2016. Since then things have gone well. “I was honoured,” he says, “to be promoted to deputy chairman of Breedon plc, a £1.38 billion market cap company on AIM of which we are also a significant shareholder.”
Swordfish has always been invested in technology as well. “We made an important investment in Shearwater,” says Bhatia. “A digital resilience company listed on AIM which was founded by my dear friend David Williams, has more than quadrupled in value in the past year.” There was clear-sighted thinking behind it. “I believe cyber security is an incredibly interesting vertical and Shearwater is at the forefront in the UK.”
He is still invested in Snapchat despite Facebook’s aggressiveness – more contrarianism (“I continue to hold my entire pre IPO allocation and remain committed to the business”), and has set out – again swimming against the tide after the Theranos scandal – by betting on the transformation of healthcare with investments in two companies that use technology for direct online access between patients and specialists.
“My close friend Clint Phillips who founded Medici, and 2nd MD before that, is a pioneer in this space and will create both lasting positive change in the healthcare space and great value for investors. I believe the same for Oscar [Health] and Josh Kushner.” (That’s Jared Kushner’s brother.)
He has been a patient investor and held his nerve while developing his depth of field, as Spitznagel would say. Or that’s football, as Bhatia might put it.