Direct Line and esure insurance tycoon Peter Wood is seeking a third fortune, this time in property, after sinking tens of millions into a developer of luxury homes in the UK and US, the Evening Standard can reveal.
Wood, worth an estimated £550 million, is taking a 50% stake in Royalton, a specialist builder which puts its “opulent and beautiful” homes in the same luxury league as Fabergé eggs. He will also become the chairman.
Royalton, founded by chief executive Ken Parker, has carved out a niche building multi-million pound homes in upmarket Surrey and Berkshire locations, selling properties for between £5 million and £10 million on average. Its Art Estates brand is also developing the Putney Plaza apartments scheme in west London
But armed with the financial firepower of Wood, a long-time friend of Parker who lives in a Royalton house, the company intends to scale up its development activities hugely, bringing forward schemes with a gross development value of £600 million over the next three years.
Wood founded telephone insurer Direct Line in 1985. Royalton is Wood’s first investment since he made £200 million from the float of esure last year. But it has disappointed the City, with shares below the 290p float price since it warned over lower premium growth last year. Wood said: “I’ve always been interested in property and interior design. Ken was growing and looking at all his options and it’s got to a size where it now needs some help from somebody like me.”
Wood said his “substantial” investment would be his second biggest behind esure, exceeding his investment in US insurer Plymouth Rock, worth tens of millions of dollars.
“I only do things where I have a substantial interest and I enjoy doing it. I like to be able to get my arms around a business to understand it,” he added.
The company may consider selling retail bonds to bring in more investors but Wood is adamant a float is not on the cards: “Public companies are always chasing the next set of figures or statement. There’s no need for a float. This is about doing something we’re going to be proud of.”
Royalton made a recent statement of intent with the £75 million purchase of the former home of BBC London in Marylebone, which it intends to redevelop as flats for the super-rich in an answer to Knightsbridge’s luxurious One Hyde Park. Penthouses at “W1 London” will fetch in excess of £25 million. “Marylebone is a very cosmopolitan mix. We think we can bring value to something. We want to make it an address,” Parker said.
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The firm will also sink funds into another scheme on a former Brunel University site in Middlesex to be known as Magna Carta Park and has moved into the US, spending $43.5 million on a prime Palm Beach site with plans to develop it into three homes for ultra-wealthy clientele. Royalton is also eyeing further developments in Boston and New York.
