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Why real estate’s image is even turning off the Hugos

By Hugo Llewelyn | 02-02-2021 

Click here for link to original Estates Gazette article

I read with interest Jane Hollingshead’s article about class in the industry (we’ll be back to fishing in a very small pond – and the fish will likely be called Rupert or Hugo), no doubt with a nominal bias at the outset.

My first reaction was that not all Hugos and their associated businesses fulfil her stereotype; or indeed Ruperts, noting the positive changes across the board that Knight Frank are making. I presume she had in mind an observation by the press a year or two back that there were more partners on their board called Rupert than women. 

My second thought was that the issue she describes – favouritism towards privately educated graduates in a shrinking industry jobs market – is really a sub-set of the much wider issue that the industry faces: its perceived and actual business behaviour, image, and the continued pursuit of a capitalist modus operandi that has now failed twice in the last 15 years.

The truth may be that bright, state school-educated graduates decide not to apply to work in the industry because they are turned off by its image, and there are far more appealing prospects elsewhere.

Exciting challenges

The industry is not going to attract the best future talent from any background if it does not adapt swiftly to fulfil its role in rebalancing the UK social divide, providing the foundations of an effective society and protecting the environment. It has the potential to tackle these exciting challenges through the skills of its people – a moral, rather than legal, corporate commitment to paying all taxes (don’t pretend to parade your ESG credentials if your tax lawyer is on speed-dial) – and the generous provision of pro bono time and philanthropy from those fortunate enough to have the ability to give of such.

At Newcore, which is a B Corporation, we are determined to do what we can, by example and publicity, to persuade the property and fund management industries to adopt a more social capitalist model. This is instead of the rather egregious, purely profit-focused approach that sadly exists today, in the face of the glaring social divide and inequality that Jane rightly described.

I have written about social capitalism widely in the past, but it essentially means a new business model, where profit is just one of the measures by which a business succeeds. For businesses within the property and fund management industries, this means changing the focus of and PR surrounding the industry’s business behaviour: from the get-rich, champagne-swilling, wheeler-dealer image that The Sunday Times et al love to parade to one of the careful, intelligent, kind and thoughtful stewardship of capital by decent people with all stakeholders treated well. The B Corporation movement, for example, describes these stakeholders as staff, community, the environment, counterparties and shareholders.

Quick change

Graduates from any educational background regardless of gender, class or race are likely to be turned off from the prospect of a career in this industry, if they read anything about it currently in the national press. The property world’s governing body, the RICS, can’t even get its house or purpose in order at a time where it should be championing the measurement of diversity, carbon capture and social impact, rather than Zone A rents. The industry needs to change – and fast – for its own benefit.

We have already seen significant benefits from legally changing our constitution to enshrine the B Corporation’s objectives in marketing, talent management and deal flow. This also includes a commitment to give at least 10% of our profits, through our foundation, to charities linked to social infrastructure and improving diversity and ethics in the industry. Potentially Pathways to Property and Changing the Face of Property fit that bill, so we may be able to support them.

As a result of being a B Corporation and living up to its ethos, I feel that the brightest talent from state schools will consider coming to work for us. This means that we should end up with a business that succeeds in the decades ahead, regardless of our, or their, first names.

Hugo Llewelyn is chief executive of Newcore Capital Management