Lyndon Lea: High stress and sleepless nights for the financier who snapped up Weetabix

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The Independent Online

Lyndon Lea seems the epitome of a Wall Street rainmaker. He's got the accent and he's got the youth. He's also got billions of dollars at his disposal to buy companies, ruthlessly strip them down, shake them up, then sell them on for huge profits.

He's an alumnus of Goldman Sachs, the world's most powerful investment bank and, as the European head of Hicks, Muse, Tate & Furst, a Texan private equity fund, he is one of a breed that has taken over from the slump-hit investment bankers as the new Masters of the Universe.

The 35-year-old has just spent £640m of his clients' money snapping up Weetabix, the ubiquitous British breakfast brand that has been in the family of Sir Richard George for more than 70 years.

He seems endlessly ambitious, having already spent hundreds of millions of pounds acquiring other British favourites including Typhoo Tea and Branston Pickle, and he's from Morecambe Bay.

Sorry? Just rewind a minute. Morecambe Bay? What about the accent, the Wall Street background and the plush offices near Hyde Park Corner that house the biggest boardroom I have ever seen?

"Yes, well. My family has already accused me of systematically going around and buying up all the brands I was brought up on. Weetabix, Wagon Wheels, whatever. But whatever you do, don't call me an American," pleads Mr Lea.

"It's complicated. I lived here in Lancashire [the occasional flat vowel emerges as he talks about his childhood]. My parents are English and my whole family is English. Everybody has an English accent except me. When I was six we moved to Africa and I spent seven to eight years in Botswana and South Africa. My dad was an engineer who just had an itch to see the world."

So where has this peripatetic Lancastrian ended up settling? "I live in Kensington, [west London] across the street from the infamous Conrad Black. It's the same street but not nearly such a nice house. I'm the poor guy in the street with the little house. He's got two big ones put together."

Take the reference to being poor with a pinch of salt. His dogged pursuit of companies, which he buys, runs and then sells will have made him a very wealthy young man. Private equity partners like Mr Lea rely less on salaries for their wealth and more on so-called "carry". This is a percentage of the profits from any deal, which is reserved as an incentive payment for the private equity financiers.

Anyway, his home in Kensington could have proved useful because Hicks, Muse was one of the first private equity funds in the race to buy the Telegraph Group, put up for sale after the dramatic demise of Lord Black of Crossharbour.

But in the end, after a close look at the deal with Apax Partners, another private equity firm, Mr Lea decided not to proceed; so the closest he got to Lord Black was the view from his west London sitting room.

However, despite the Telegraph, he has not been short of things to buy. Yell, the Yellow Pages company, is one of the most famous things that has passed through his hands. He has just sold Hicks, Muse's remaining shares in the former BT Group's directories business, which he bought in 2001 for £2.14bn. He partially floated it on the stock market a year ago as a FTSE 100 company and sold the rest of the Hicks, Muse stake last month.

But don't think that Mr Lea and his Hicks, Muse fund are simply absentee landlords. Quite the opposite. They are, in his own words "owner operators", which means they buy a business, strip out costs and then run it their own way, often buying other companies to form a much bigger group that can be sold or floated at a later date.

One of his first deals in the UK was Hillsdown Holdings, a hotchpotch of food companies that have been whittled down to form the core of Premier Foods, which now includes brands such as Sun Pat peanut butter, Chivers marmalade and the recently bought Ambrosia rice pudding.

"Whenever we buy a company the first question out of people's mouths is 'what's happening to the workforce?' In our initial ownership of Hillsdown there were job losses but what we achieved after the first two years of ownership was a business that was strategically better positioned, but also a much more efficient manufacturer," says Mr Lea. "That is something reflected in the margins. When we bought it they were 8 per cent, now they're running at 14 per cent."

So it sounds like a case of never mind the dole queue, feel the margins.

"It's why Premier today is a thriving, healthy business with a future that probably involves a public flotation. Had we not done what we did, the business would have gone the way of much of the UK food sector. It would have disappeared altogether."

So what does Mr Lea have in store for the Weetabix workforce? Luckily the company's 17.5 per profit margins means it is already a tasty dish. But no doubt it can be improved.

"From what we can see it seems to be quite a well-run company. Clearly as and when Sir Richard moves from chief executive to chairman we will have to think about succession, whether that's from inside or outside the business.

"But there's an awful lot that can be done with the brands in terms of stretching them into other categories. They are fantastic names. I don't know anybody in the UK who doesn't know what Weetabix is. That's the power of it," says Mr Lea.

On the jobs front, to be fair, Hicks, Muse reckons that in net terms, across all the businesses that it buys and develops, total employment has actually risen.

So does all this job-slashing and cost-cutting make for a clear conscience?

"I don't know anybody who is as lucky as I am, that literally, in all seriousness, gets up in the morning and is really excited about going to work.

"I really love what I do. At the same time it's quite a demanding job. There's a lot of responsibility. You effect people's lives in a very meaningful way and that's not always easy.

"It is quite a high stress job because you are dealing with substantial figures on behalf of investors and the ramifications of making a mistake are serious.

"It's not a nine-to-five job. It takes over your entire life and certainly a couple of times a week you find yourself lying awake at 3:30 in the morning thinking about what's coming next. I can't say it's relaxing."

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