In conversation with... Leon Blitz

Mr Leon Blitz joined the Cromwell Board as an independent Non-executive Director in 2017, became Deputy Chair in 2019, and recently succeeded Mr Geoff Levy as Chair. Mr Blitz is the co-founder and CEO of Grovepoint, a London-based private equity and FCA-regulated investment management firm.

Mr Blitz has a significant track record as a deal maker and fundraiser with extensive experience in working with high performance management teams to develop and execute corporate strategies in both listed and unlisted markets.

How did you get your start?

I have always been interested in business and investments, and when I was making a decision about my future professional career, the pathway into the field was through chartered accountancy. I completed a Bachelor of Commerce at the University of Cape Town in South Africa. Accounting and finance degrees subsequently followed.

My working career began with Arthur Andersen, which was the only truly multinational accounting firm at the time. While I completed my training contract in auditing, I was involved in the business consulting side of accounting, building financial models and introducing them on floppy discs to clients in meetings, back when laptops were the size of sewing machines.

After Arthur Andersen, I joined Investec when it was a new ‘challenger’ bank in South Africa. After a few years, I was looking to get international experience, so in 1990 I came to Australia. However, not too long after I landed, Investec offered me a role in London. So, Australia, at the time, was not to be. My parents subsequently settled here, as did my sister and family, and continue to live in Sydney.

What made Investec a great place to work?

Investec was a dynamic and exciting place to be. Working there was the closest thing you could get to running your own business within a business. The onus was on you to take responsibility, and you were given a lot of freedom, within a very strong values and risk-based framework. The founders were also present and involved, which filled people with a sense of empowerment and confidence.

Investec was full of great people, it was very customer-focused and didn’t have any legacy issues to hold it back. When Investec started expanding abroad, I was strongly aligned and connected with the firm’s culture and values system and was chosen as a candidate to help establish the business in London.

I ended up spending 20 years with Investec in London, initially heading up the private banking and property lending business, and the last few years leading the bank’s principal investment activities, where I was responsible for backing successful entrepreneurs and high net worth individuals.

Investec and Cromwell both have the same emphasis on the importance of culture and values. Culture is fundamental to any business and it should be palpable. The influence of the founders is deeply ingrained and felt across both companies. Client-centricity, doing the right thing, entrepreneurship and a strong focus on people also forms a major component for both, and is at the heart of why they are successful.

What makes a Board successful?

I’ve had a lot of private and advisory board experience, especially in having to deal with large investors, and diversity of thought and experience is essential. A good board should be comprised of independent and diverse perspectives in order to avoid groupthink. Challenge should be encouraged, and while skills and experience should be different, they should also be complementary. A good board has a blend of commercial nous and good governance. This has become increasingly important as there’s a lot of pressure on companies to ensure things are done in the right way.

International experience is also important at Cromwell. I spend time in Australia and know the market, but appreciate that more than half of Cromwell’s business and people, not to mention a lot of its investors are located outside of Australia. I was originally introduced to Cromwell because of my familiarity and access to European investors, capital partners and investment markets.

What will your first 90 days as Chair look like?

I’ve been focused on ensuring a smooth transition from Geoff, settling in the new Directors, and making sure the management team are executing the ‘Invest to Manage’ strategy. I have been on the board for a few years now, so I have a good grasp of the business. Geoff has also helped things enormously, he has been a very effective Chair over the last 12 years and has been extremely generous with his time.

I’m stepping in at a time of increased securityholder agitation. There is no denying that. It’s a normal and reasonable expectation of securityholders to have questions and demands, but as a board, when we consider these issues, it is our duty to do the right thing by all securityholders.

As incoming Chair, together with the Board, I’m leading a strategic review of the business. This process is underway, in conjunction with our appointed advisers, UBS and Goldman Sachs. The business is performing exceptionally well, but our single largest securityholder continues to agitate and is attempting to paint a picture of Cromwell being in ‘disarray’ which is both egregious, and far from the truth. This situation will be an immediate priority.

Do you have a message for securityholders?

On a day-to-day basis it is business as usual. We declared a fantastic set of results at the half year, with statutory profit up 59%. Paul, the management team and staff have done a great job executing the ‘Invest to Manage’ strategy, building resilience into the business and positioning it for the future.

Between my time at Investec, Grovepoint and now at Cromwell, I’ve been answerable to investors my entire career. I’m keen for us to continue to ensure security of investment, that a dollar invested is always returned, and the distributions we pay and returns we make remain in line with expectations. In the end, we must always do the right thing and not favour one securityholder over another. I’ve already begun meeting with securityholders, and I’m always open to engaging with all stakeholders.

We are protective of the values and principles that have defined Cromwell as an organisation over the last 21 years. Geoff had a very strong sense of these values and principles too, and I will look to continue this.

How do you spend your time outside work?

I’m married with three children, two of whom are currently at university, and one is about to enter the professional workforce also as an accountant. This has meant that I’m now in the advantageous position of having a little - not a lot - but a little bit of extra time on my hands, particularly compared to when my children were younger and when I was actively building my business with my partners.

This has allowed me to dabble in a few new passions. I’m about to start learning the piano and I take lessons to improve my voice while singing in choir. I have the opportunity to contribute and be involved in a number of charitable organisations. Beyond that, I must admit to being a follower of sports, particularly Arsenal, and I’m also a keen, albeit slow, runner.

We also enjoy travelling and went to Costa Rica last year. It is a little off the beaten track but was absolutely fantastic. The people are very welcoming and the culture is palpable. The country has it all: rainforests, volcanoes, pristine beaches, jungle and a huge array of wildlife. It is a million miles away from London and I thoroughly enjoyed it.

Leon running