Subscribe to Holyrood updates

Newsletter sign-up


Follow us

Scotland’s fortnightly political & current affairs magazine


Subscribe to Holyrood
by Will Peakin
24 January 2013
Beyond wealth

Beyond wealth

As a young man, Sir Tom Hunter’s view on the meaning of wealth was unsophisticated: “For me it was owning a Guards Red Porsche 911 Carrera. I was very specific; I actually wrote it down. That was what economic fulfilment meant to me.

“That’s obviously changed over the years. But yes, starting out, it was very materialistic, driven by a love of cars. My goal was to own one by the time I was 30 and I just managed it. In the early 80s, I had no ties; I was staying with my parents. So, it was very self-centred.”

Hunter was the son of a grocer in New Cumnock, Ayrshire. A bright spark at school, he went on to study business at Strathclyde University but would find it difficult to land a regular job. He did, however, spot a phenomenon that would eventually make him Scotland’s first billionaire.

His father, Campbell, had successfully run the family business but the collapse of mining in the area forced it to close. It did not stop him helping out a fellow trader, though, who sold footwear. At home from university one weekend, Hunter junior noted how trainers were such a big part of the trader’s weekly takings.

In 1984, Hunter borrowed £5000 from his father and £5000 from the Royal Bank of Scotland, hit the phones, got behind the wheel of his van and began looking for outlets for his stock of sports shoes. It was a slog, but after five years he opened his first shop and then, in 1993, a superstore selling a range of sportswear.

Two years later – with his new friend, retailer Sir Philip Green, providing cover – he bought the rival Olympus Sports chain allowing him to grow his own company, Sports Division, into one of the UK’s largest retailers with 250 stores employing around 7,000 people.

He sold it to JJB Sports in 1998 for £290m. In 2006, The Sunday Times estimated Hunter’s worth, fuelled by a series of property and retail investments, at £1.05bn. The following year, he garnered more headlines when he pledged to give away his entire fortune before he died.

At the time of the sale, with a reported £252m in his pocket, Hunter’s accountant advised him to relocate to Monaco. His wife Marion, to whom he attributes his best decisions, didn’t think that would be a good idea and the couple made their home in Ayrshire where they have brought up their daughter and two sons.

They set up the Hunter Foundation, initially as a way of managing their tax bill but it has developed into one of the world’s leading ‘venture philanthropy’ organisations.

“I guess over the years, having sold my first business at the tender age of 37, with a very large cheque in the bank and nothing to do, I got the chance to look and, as I call it, ‘re-educate’ myself. I had fulfilled all my material goals and I needed to know that there was some other purpose beyond just putting more cash into the bank.

“Your first thought is to take care of your family, but we came to the conclusion that we did not want to burden our kids with great wealth. Warren Buffett says it best: ‘Leave your kids enough to do something, not too much that they do nothing.’” He laughs: “Finding that balance is an ongoing process.”

“And I read a lot, I travelled and I met people.” One of those people was Vartan Gregorian, the president of the Carnegie Corporation of New York. “He became a kind of mentor to me; he shaped my thinking. Vartan challenged me; [he said] that no one individual should have such wealth, so I should go and find good causes and invest for the common good.”

The spirit of Andrew Carnegie was and continues to be an inspiration, but: “The clarity of thought took two or three years to come; that I still wanted to be involved in money-making – because I enjoy the challenge and stimulation of business – but that the profits could be put into our foundation.”

To date, it has invested more than £50m in educational projects in the UK and in economic development abroad. In the way of modern philanthropy, the aim is not to ‘throw’ money at problems but to focus on “partnerships and leverage to maximise impacts and stretch our cash further.” It has invested in a series of ‘interventions’ aimed at preventing young people falling into the category of ‘not in education, training or employment’.

In its annual report, the foundation compares the cost of supporting a vulnerable primary-age child in school and at home – £223 a year – with the potential cost of not intervening; £1,200 for non-attendance and £20,110 for permanent exclusion. Likewise, the cost of business skills training and one-to-one support for a young offender – £553 a year – is compared with the potential cost of benefit claims or reoffending; £8,100 and £188,000, respectively.

In the UK, the foundation also supports projects that work with young parents, young people wanting to start their own business and communities who want to tackle problems in their area. Internationally, it supports sustainable economic development in countries such as Rwanda with projects involving domestic food, oil production and coffee manufacture and export. Its partnership with the Clinton Foundation has also contributed to improving the appalling maternity facilities that exist in Malawi.

Last week, Hunter was ensconced in his office in Dundonald with his small team, setting goals for the year ahead. “We’re proud of what has been done,” he said, “but I think it’s the entrepreneur’s mindset to think: ‘We could do better!’ And therefore, we will do better. That was yesterday – and it’s what’s happening tomorrow that interests me.”

Hunter is buoyed by the response of people to initiatives such as the STV Appeal, which the foundation established with the broadcaster: “We’re using the power of television to show what’s happening in communities and this kind of thing works best when communities take control of their destiny and get on with it; these are not people looking for a handout, but a wee hand up and that’s a very positive trait I’m seeing all over Scotland.”

The foundation also supports Entrepreneurial Spark, a project to create a “business start-up renaissance in and from Scotland”. It is something close to Hunter’s heart: “If you look at Scotland’s history, we have been dependent on nationalised industries; coal, steel and ship building. This was someone else taking care of you. You wake up and guess what? They’re gone. We’re keen to see a society that thinks for itself and small business creation is at the forefront of that.”

It’s a view that extends to Scotland’s constitutional position: “Tinkering around the edges isn’t going to do it for me; we need some radical change,” he said, arguing for fiscal autonomy which he says would allow Scotland to create a tax regime that would attract companies to create “sustainable jobs, not just in and out once the subsidy runs out.”

At the other end of the spectrum, he sits on the advisory board of the Beijing-based Cheung Kong Graduate School of Business which mentors China’s young entrepreneurs, many of them already billionaires: “The largest amount of private wealth over the next 20 years is going to be in China,” observed Hunter, who spoke to a group from the school last autumn.

Outlining how philanthropy could “redefine government policy, catalyse commercial investment that profits both the entrepreneur and the community, enable solutions to some of the world’s deepest challenges and offer an opportunity to bring communities and indeed countries together,” Hunter asked them to think about a purpose that went beyond wealth. “They looked at me as if I was mad, but we got into a good conversation.”

Hunter is part of that recent generation whose extraordinary wealth was created, not inherited. Like many, he was chastened by the financial crisis post-2007. “[It] hit us hard, we were not ready – our fault entirely – but we took our medicine, regrouped and now attack our private equity business a little poorer, a lot wiser and with new vigour. I have never been more determined to make more money that will then go into the foundation.”

It was estimated that Hunter’s business lost more than £250m in value. In 2008, tabloid newspapers reported the sale of a “£50m” villa near Nice, although a spokesman said it was unconnected with the crisis. Subsequently, Hunter was asked about his pledge: “I believed it then and I guess it’s still my dream,” he replied. “I was always very clear it was in my lifetime and my life isn’t over. I’ve still got another 40 years left in me, hopefully.”

Hunter does not intend for the foundation to continue after his and his wife’s death; it would, he says, be “fully divested” at that point. He does allow for the possibility that one of their children might continue it, but he would have to be convinced that it was a “real burning passion of theirs, without it being foisted upon them. I would need to make sure their intentions were genuine and that’s what they really wanted to do.”

Whether Hunter achieves his original goal of giving away £1bn, only time – and, literally, his fortune – will tell. He has always said he doesn’t want to be the richest man in the graveyard. What happens, I ask, if he achieves his goal but, on his deathbed, he is still wealthy? “That’s made me think,” he says, “but to be honest, I can’t come up with a great answer.”

Holyrood Newsletters

Holyrood provides comprehensive coverage of Scottish politics, offering award-winning reporting and analysis: Subscribe

Read the most recent article written by Will Peakin - Evolution of wealth.

Get award-winning journalism delivered straight to your inbox

Get award-winning journalism delivered straight to your inbox


Popular reads
Back to top