New London developers step up

 As investors shift from stocks and shares to bricks and mortar, some young City employees are abandoning their corporate desks for independence as property developers. Job uncertainty, plummeting bonuses and a depressed FTSE index have all added to the allure of dealing with power showers and limestone floors rather than Enron and aggregate futures. Moreover, most of today’s twenty to thirty something bankers and traders have fitted out their lofts with designer furniture and bespoke appliances without needing help from professionals or spouses. In doing so they have acquired useful experience and a flair for building schemes.

Andrew Dunn and Alex Michelin, both aged 26, are typical of young men whose aesthetic sensibility was somewhat thwarted in the City. They met at Charterhouse public school when they were 13 and have remained friends ever since. In February last year they set up Finchatton, a property developing company specialising in the Mayfair district of London, and have just completed their first development: a two-bedroom Mayfair apartment that has undergone as complete a transformation as that of Cinderella’s pumpkin into a coach and horses.

Not that either man regards his time spent in the City as wasted. Far from it. “I worked for Sarasin, the Swiss investment bank, in their private client department,” says Dunn. “The skill and experience I gained there, especially from dealing with big hitting clients, was invaluable. When it came to setting up Finchatton we needed to raise about ?2m. We had to be persuasive and to pitch a really good case. Working at Sarasin gave me the confidence and ability to do that.” As for parallels between the City and building industry? “It’s chalk and cheese,” he says. “The City is basically a very regulated environment to work in, but the property industry has managed to avoid that. Builders have grown up in the school of hard knocks and making a buck where they can, so many of them are out to fleece you.” Dunn tends to handle the design side of the business, Michelin, who spent several years in corporate finance and private equity at HSBC, looks after the finance.

“The perception of the City at the time I joined was that it was all ‘greed is good’ and Gordon Gekko,” says Michelin. “I became very comfortable about dealing with vast amounts of money and of learning that, regardless of the amounts involved, the simple structures and formats for investing are the same. This gave me a sense of the potential to run my own company. It also gave me the courage to gamble.” Like Dunn and Michelin, Carlos Calvo, another City man turned property entrepreneur, rarely gets his hands dirty but buys in most of his expertise from outside. Bolivian-born, Calvo resigned two years ago as a director at Lehman Brothers, specialising in Latin American sales, and set up Campden Hill Estates a private limited company.

“From the day I went into the City I was thinking about the day I was going to leave,” he says. “It wasn’t that I had a bad experience there, it was just that I wanted to work for myself. At the time, I didn’t know what I wanted to do, but buying and turning around an unmodernised flat in Kensington with my wife Jasmin, got me thinking. “The main thing I got out of the City was that I made enough money to get myself started. It gave me access rather than the experience. But I also learned how companies work, their profitability and their margins. And having fund managers breathing down your neck makes you very good at dealing with people, regardless of whether it’s the bank manager or contractors.”
He is clearly enjoying his change of profession, but has it been financially rewarding, too? “I’ve done up and sold eight properties in the Kensington and Chelsea area,” he says, “and have earned a lot more than I would have done over the same period in the City, though I’m not prepared to give figures. But, for me, the lifestyle factor is the greatest benefit. I’ve got two small children whom I can take to school and pick up when I want to. And I use my time more efficiently. During quiet periods, I go to the gym and often take my family out on Friday.

His intention to build an honest reputation, Calvo also attributes to his time spent in the City. “I’, committed to doing a fantastic job and getting a reputation for being honourable with people, regardless of whether they are the people I’ve sold to, or contractors.” Property for Jason Flooks, 30 years old and from Surrey, who worked for seven years for a Lloyds underwriting syndicate, has no appeal other than a way of earning more money. Flooks bought his first flat in the Old Brompton Road, in London, in 1996 and sold it a year later at about a ?50,000 profit. Over the past four years he has amassed ?650,000 out of seven flats that he has bought, renovated and sold on, netting between ?40,000 and ?125,000 on each. He calculates that he would have made around ?350,000 over the same period of time working in the City. “I do not miss the comradely aspects of the City,” says Flooks. “Working in an office environment and going for after-work drinks. But now I’ve got my own time, my own space and I can go on holiday when I want.” In the current climate there are other advantages to his making his move when he did. “Friends of mine in the City are now being laid off, so I’m just glad that I made the move out of the City and into property when I did.”