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Billionaire Lo weighs adding to Formula One investments after Williams

Stock Markets Aug 03, 2022 01:32AM ET
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2/2 © Reuters. Formula One F1 - Hungarian Grand Prix - Hungaroring, Budapest, Hungary - July 30, 2022 Williams' Nicholas Latifi in action leaves a trail of spray due to rain during practice REUTERS/Bernadett Szabo 2/2

By Carolyn Cohn and Selena Li

LONDON/HONG KONG (Reuters) - Hong Kong-based billionaire Calvin Lo is considering putting more money into Formula One following his connection with F1 team Williams, Lo told Reuters in an interview, adding other Asian investors were also interested in investing in the sport.

Lo, chief executive of insurance broker RE Lee International, confirmed he has "some sort of exposure" to Williams, following the U.S.-based private investment firm Dorilton Capital's purchase of the team in 2020. He declined to give more detail, citing non-disclosure agreements.

Dorilton Capital makes investments for Lo, according to media reports.

"A lot of people, me included, are still looking to other teams, other opportunities, because...there are consistently good teams but they are not able to come up with the right car," Lo said.

"In Asia right now, there is a lot of liquidity sitting around, it's mind-blowing. I wouldn't be surprised if the next news you hear...is maybe some consortium in Asia investing into some other teams."

Lo did not name the teams attracting investor interest.

Formula One currently has 10 teams, with any new entrant that is accepted having to pay a $200 million fee to be divided among the existing teams.

Existing teams include Ferrari-powered Haas, whose title sponsor was Belarus-born chemicals billionaire Dmitry Mazepin until he was sanctioned by the European Union in March, following Russia's invasion of Ukraine. Haas declined to comment on investment discussions.

Williams has suffered financially as a Formula One car constructor, because unlike manufacturer-owned rivals, there is no road car business behind it, Lo said.

Williams posted a loss in 2019, the last year before its sale.

PANDEMIC INSURANCE BOOST

RE Lee operates in Hong Kong and internationally, arranging life insurance polices for ultra-high net worth individuals through major insurers such as Prudential and Manulife.

The broking firm has already arranged policies with premiums totalling $1.2 billion in the first half, equivalent to its business for the whole of 2021, which was itself a record year, Lo said.

COVID-19 has increased demand for life insurance for the super-rich, as they become more aware of their mortality.

"Whenever there's some sort of pandemic disaster, life insurance generally does all right" Lo said. "Demand for our services is huge."

The previous loose monetary environment has left the super-wealthy with ample cash to deploy, and life insurance helps to ease the tax burden from the old to new generation, he said.

Pay-outs on the policies give rich families access to ready cash which can be used to pay inheritance tax bills. The policies can cost hundreds of millions of dollars.

Lo is looking to set up an office in London this year to service the 8-9% of his clients who have a UK presence.

Lo also runs a wealth management business and is looking into buying commercial property in London, though he said it was not without risk.

"Property prices in the UK are expensive, some would argue severely overvalued," he said, adding that "it's almost hard to value it, every property is so old".

Lo bought the five-star Mandarin Oriental Taipei for $1.2 billion in 2018 and is considering similar investments in London.

"If you have liquidity...it's maybe something to look at."

Billionaire Lo weighs adding to Formula One investments after Williams
 

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