Sir Richard Branson boasts an impressive CV and the serial entrepreneur needs little introduction. He started his first business venture aged just 16, was a self-made billionaire by his 40’s, has a diverse range of investments from media companies to airlines, and he has a current net worth of $4.6 billion (Forbes)1. Arguably he is one of, if not the UK’s most successful entrepreneur.
His ambition, ventures, and investments are certainly well known, but what you may not know is that one of his smartest investments was actually one of his first. In 1978, Branson heard that one of the British Virgin Islands was for sale. Apparently to impress his then girlfriend (now his wife) he visited the island with a view to buy it, and fell in love with Necker Island. The asking price was $6 million, so Branson put in a lowball offer of $100,000 and he and his girlfriend were promptly ordered off the island, so the story goes. However, a year later, the owner, Lord Cobham, had received no further offers and was desperate to sell, so his agent approached Branson and they agreed on a final sale price of $180,000 – just 3% of the original asking price2.
Stipulations were thrown in with the purchase, most notably that if the island was to be purchased by a foreigner then they would have to build a resort on the island within four years, or face a mandatory purchase order by the state2. This was duly accomplished in three years at a cost of some $10 million3 and Branson’s dream was made reality, no mean feat to accomplish for someone who was only 28 at the time of purchase4.
In 2006, Branson valued Necker Island at approximately $60 million5 and with inflation taken into account, that gives a rough value today of some $70.5 million6. Given that his total expenditure was about $10.18 million, this represents an astonishingly good return on his investment, in fact Branson himself lists the purchase of Necker Island as his best ever financial move7. More than being just a savvy property investment though, his purchase of Necker Island became one of the lynch stones of his portfolio and marks the origins of his luxury property portfolio group, Virgin Limited Edition8, a highly successful business in its own right.
The lesson to be learned from all this? Incredible investment opportunities exist if you know where to look for them, and if you don’t ask, you don’t get. Who said island life didn’t pay?
5. http://www.thisismoney.co.uk/money/meandmymoney/article-1600580/Sir-Richard- Branson-Me-money.html