Lowy Family Group
The birth of Lowy Family Group.
The predecessor of LFG was created in the 1980s when Frank and the co-founder of Westfield, John Saunders, split, resulting in modest, separate family offices. As the Lowys' wealth grew, David, in addition to his role as an executive of Westfield, took charge of managing the family's assets – real estate, cars, boats, aeroplanes – along with a growing staff.
By 1998, as managing director at Westfield and approaching his mid-forties, David Lowy wanted to change his lifestyle. Passionate about flying, he had just become the Australian Aerobatic Champion. Every weekend, while he was out flipping his plane, his father was silently praying for Sunday night to arrive without incident.
But David wanted to do other things too. Frank, initially unhappy about the idea of losing him as an executive at Westfield, turned it into an opportunity to diversify the family's investments. He sold down 13 per cent of their Westfield shareholding, netting $450 million which went into LFG. David formally became its chief executive and in 1999 began investing the money. With a small investment team, and with dividends flowing in from the family's large shareholdings in Westfield and its spin-offs, LFG's assets have grown to well over $4 billion.
David, 63, who lives between Australia and New York, had only ever worked in a public company before. He says this proved a good basis for conducting the financial affairs of the family because "it provides more rigour and discipline than is typically found in private companies". His strategy has always been to conduct a fundamental bottom-up analysis of listed companies. "If you are going to throw darts at a target, throwing one at a fixed target is much easier than a moving target. If you've got belief in the fundamentals of your strategy, then don't keep moving the target."
He has enjoyed sole control and says if his performance had been substandard, his family would have let him know. "Typically, Dad asks 'have we got more than we started with at the beginning of the year?' If I say yes, he says, 'Ok, that's a good thing.'"
Frank, David to lead the Lowy Family Group.
In their post-Westfield life Frank will continue as chairman of LFG, which will be the sole base for his future business activity. He "mostly" plans to provide high-level strategic advice and be a reservoir of experience for his sons to draw on. But he's a natural risk-taker and there's always a chance something might catch his eye.