Just a short post on some articles that I have been
reading recently on Caledonia Investments Chief Investment Officer’s purchase
of some incredibly pricey real estate.
It has been widely reported in the media that Will
Vicars, the Chief Investment Officer of Caledonia Investments spent $21 million
(last year) on two adjoining apartments in Sydney (one costing $10.9m and the
other $10.1m). Apparently he was planning to join the two apartments together
to form one residence.
Now, unless Will plans to donate those apartments to
charity, or the media reports are incorrect, the purchase raises some
interesting questions:
1.
What does the Chief Investment Officer of
Caledonia get paid? (Perhaps way too much, judging by this lavish expenditure?).
2.
What sort of person would spend $21m on a
residence? (Certainly not a Buffett disciple, expenditure on that scale is much
more closely associated with those who enjoy ego-driven displays of wealth).
3.
Did he get value for money? (I doubt it).
Whatever the answers to these questions, it’s not a
good look for Caledonia (as a firm that is open to investments from the public).
It informs an opinion in my mind regarding Caledonia’s Chief Investment Officer
that is far more revelatory than any public relations material ever could be.
It’s even worse when you consider that Caledonia has (supposedly)
always worshipped at the altar of Warren Buffett, a man who despite being
vastly wealthier than Mr Vicars, would never dream of living in such
ostentatious surroundings.
If I was a Caledonia investor (which I’m not and never
will be), I would be scratching my head about this one. That “simple” purchase
seems to invalidate a lot of what Caledonia supposedly stands for. But then
again, often what people do in their private lives is far more informative than
what they do in public.
Food for thought.
