David Lloyd is synonymous in Britain as a tennis legend and the creator of the UK’s biggest national sports club chain. But now he has turned his attention to self-invested personal pensions and hopes he can use his successes in creating profitable international property funds.
Lloyd’s career started a million miles away from finance. He left school at 15 and became one of Britain’s top tennis stars of the Sixties and Seventies, eventually captaining the British Davis Cup team. But unlike many of the sportsmen of today, Lloyd was as astute with his bookkeeping as he was with a tennis racket.
“I did all my own finances and invested all my own money,” he says.
In 1981, Lloyd retired from professional sport and began planning to build indoor tennis clubs.
He says: “It was very difficult to build the clubs. But I had worked all over the world in indoor tennis and I knew it had to work in the UK and I knew how to make it work. We went out to institutions to raise money and it helped that I was a famous tennis player, but then they asked what my education was – I did not have one because I left school at 15. But I knew the clubs.”
In the end it was his local NatWest bank manager who was instrumental in helping fund his first clubs and the company Lloyd created has grown to 78 clubs nationwide, with a further 10 in continental Europe. They were sold to Whitbread in 1995 for £182m. Along with his son Scott, Lloyd created Next Generation gyms that eventually merged with David Lloyd Leisure in 2007.
But following his exit from the leisure business, Lloyd’s newest venture is into the world of property investment.
“I have always had a pension fund and have always been very disappointed in what you can and cannot do in it. I think they have been very restrictive.
“I then asked myself, what had I missed in my life as an owner of a pension fund? It was that I missed investing in property. Property is something I love, whenever I have made money I have always put it in property. I have bought in Aspen, Barbados and Scotland and the properties have gone up by seven or eight times because I bought in places that people want to go to. It has been my best investment.”
As a way of combining the two, Lloyd has created the David Lloyd Investment Funds – luxury resort property funds that he says will offer Sipp holders “solid and exciting returns”.
“It took three years because of the rules and the regulation and we wanted to make sure all the pieces worked together. If you liken it to a tennis match and you are playing Roger Federer, to unlock him and beat him is difficult so you have to work at it and eventually you maybe get through it.”
This year has seen the launch of the first two Sippable funds. The two funds include property currently valued at £12.4m and £2.1m and demand a minimum invest of £50,000 and £20,000 respectively, with a guaranteed annual rental yield of 4 per cent and a target return of between 10 per cent and 14 per cent a year, including the annual rent. The bigger fund will run for seven years and the small fund for five years.
The properties within the fund are managed and let by David Lloyd Resorts and are based in Spain, Cyprus, Thailand, Canada, Barbados and Turkey.
Lloyd says: “I chose each of the properties myself. They have to be five stars and have to be run by us as a resort – we are trying to be in charge of everything so people know that it is going to be controlled at a five-star level.”
Lloyd hopes to build on the initial funds and create more property funds for Sipps and SSAS as and when he finds more properties to invest in. He says he is currently looking at property resorts in Vietnam, Japan and Australia.
“There are plans to develop more funds and buy more properties. The size and shape will depend on the feedback we get.”
Lloyd says most Sipp providers have given the funds a green light and he is confident that his funds will pass any quality controls by IFAs who may have doubts about advising clients to add international property to their pension plans.
“It is all about letting people put their money where they want. I agree that there have been some problems with properties in Sipps and there are a couple of big outfits out there who are selling products that are not Sippable. But we are not selling property, we are selling an investment fund. It might not be the sexiest return but all I know is because my name is on it, it is solid.”
Lloyd hopes that his venture will make his name as synonymous with investment funds as it is with tennis and health clubs.
“I would not do it unless I put my own money in it – I have invested almost £1m into this and will be investing more. It is our reputation on the line but we really think we have a great product. I have not been as excited in a long, long time.”
Born: Southend-on-sea, 1948
Education: Southend High School
Career: 2007-present: chairman, David Lloyd Investment Fund; 1997-2005: chairman, Next Generation Clubs; 1981-1995: chief executive, David Lloyd Leisure; 1965-1981: professional British tennis player.
Likes: Good food, golf, US TV shows
Dislikes: Queuing, rude people
Drives: Audi R10
Film: The Shawshank Redemption
Book: The Catcher In The Rye by J D Salinger
Musician: Roy Orbison
Life Ambition: To run British tennis and make it the best in the world
If I wasn’t doing this I’d be…Playing golf