If you walk the streets of St. James’s, you feel the footsteps of the great, the influential and those who do business, those who pull the strings in a corner of London that has welcomed the elite since the days of the Restoration. In the centre, St James’s Square , which for at least two centuries was one of the most elegant addresses in London until the arrival of gentlemen’s clubs and commercial establishments caused the aristocracy to flee to nearby Belgravia.
The brass plates next to the sturdy doors of these imposing, high-ceilinged buildings now allude to the trade of their current occupants. They are no longer houses, because the commerce of the XXI century does not need rest. Inside are companies bearing opaque and nondescript titles, specializing in things like merger arbitration and special situation equities. Through these halls flows wealth to an order of decimals by which a simple millionaire is a true beggar in comparison.
The north side of the square houses the grandest buildings, erected on the largest plots. Number 5, the former Wentworth House , built in the 18th century in the classical Palladian style by Matthew Brettingham . Lawrence Stroll set a new rental record in London when he established his offices here in 2017.
A blue plaque on the adjoining building marks number four as the former residence of Nancy Astor , the first woman MP; it is now the headquarters of the Naval and Military Club, aka ” The In and Out “, whose president was the late Prince Philip, and which does not publish its membership fees. Beyond the eastern row, billboards cover the demolished remains of Norfolk House , where General Dwight D Eisenhower laid out the plans for the D-Day invasion. A £72m office building has been commissioned here for a ” undisclosed client. Historical richness, power and ambition reverberate in this area like a high voltage circuit.
GP Racing magazine, part of the Motorsport Network, opens the door to number five and enters a space of discreet abundance: a waiting room with two leather armchairs and a wide stone staircase that leads to the offices of Lawrence Stroll . Casually dressed, he greets us behind a large desk lit by a pair of tall, wide windows that offer a clear view of the square.
Although we’re talking to a man with many business interests, only one of them is reflected in the decor: an action photo of an Aston Martin Racing pit stop on the wall behind the desk, and trophies above the fireplace. Cars are designed and built 70 miles from here, in a considerably less grandiose environment, but that is about to change and it is from here that the strings are pulled.
In mid-September, Stroll , along with JCB chairman Lord Bamford – one of the co-investors Stroll brought to the table to rescue Aston Martin 18 months ago – laid the foundation stone for the JCB team’s new factory. Formula 1 of the brand, which is expected to cost between 150 and 200 million pounds (between 180 and 240 million euros). But remember that we are in St James’s , where the movement of such amounts in the millions is nothing more than small sums of money. The new facility, which the boss prefers to call a campus rather than a factory, will be the center from which Stroll intends to build a billion-dollar business under the Aston Martin Performance Technologies umbrella.
“Unfortunately, it has fallen two years behind the originally planned schedule due to COVID-19,” says Stroll . “I was hoping we’d be there today.”
“The most essential tool for any Formula 1 team is to have the latest and most modern campus, it is a campus, not a factory. We will have three buildings with facilities including a restaurant, a gym and a wind tunnel. I think this will give us difference from our competitors.
“It’s a huge investment. To win in Formula 1 you have to have the right leadership and vision and like in any business you have to have the right finances. And honestly with the new financial regulations it will really level the grid. We will no longer be outclassed by our competitors: we will have the same budgets as the top two teams.”
Therein lies the difference between Lawrence Stroll and others who have acquired struggling teams in Formula 1 and in the world of motorsport in general in recent years. Stroll has access to capital and is not afraid to spend it, as long as the risks are properly understood and mitigated. This is in stark contrast to many would-be team owners who have looked for a way to make a cheap offer, but using funds leveraged against that team’s future earnings: in effect, gambling with other people’s money.
When Stroll ‘s ventures require others to step in and share the risk, he has a history of making significant profits for himself and has co-investors, which is why so many of them happily return to the watering hole. Aston Martin co-investor Silas Chou , for example, made a lavish return on his investment in the Stroll-orchestrated relaunch and IPO of fashion brand Michael Kors .
It helps that in the post- Bernie Ecclestone era, F1’s commercial rights holder is taking a more collegiate and collaborative approach to growing the business. The budget cap – agreed despite disagreement from F1’s biggest spenders – and the €200m “entry ticket” signed in the latest Concord Agreement have put competitors in a better financial position.
While the cap won’t transform the competitive landscape immediately, it does mean that F1 is no longer a bottomless pit into which teams spend money recklessly. Coupled with the new barrier to entry that enshrines each team with a franchise value, it makes all competitors much more financially reliable. When Lawrence Stroll rescued what was then known as Force India from administration in 2018, this was not yet a done deal, but it was certainly part of the plan for the new top-flight owners.
“I had several meetings with Chase ( Carey , CEO of F1) at the time,” says Stroll . “And that was a very, very important part of my decision process to buy the company or not. It had a big influence on the decision. If there hadn’t been spending limits, I wouldn’t have done it.”
“People – human capital – are a very important factor. I would never have bought a team that was between 9th and 10th position. What impressed me, and the reason for the purchase, was that it was a team that worked with a budget of £90m and just 400 employees (Mercedes was spending £332m a year at the time, and had 900 employees at Brackley alone), but two years in a row he was fourth in the championship, and would have been fourth three years without the administration. All this with a third of the budget and less than half of the staff of the competitors who were above”.
“There was already a very passionate core of 400 people here, that famous expression, who hits the jackpot. They were doing more with fewer people than other teams, so it was an incredible opportunity to build on an already strong foundation. zero”.
“When the company ( Force India ) went into bankruptcy, there was no plan at the time. After I got the asset, yes, I had a very clear vision that this is a car company. And I had a dream that, being based at Silverstone for almost three decades, it had to be a British brand. And for me there is only one British brand that justifies being on the pedestal of F1. And that was Aston Martin . It was kind of a dream come true .”
The COVID-19 delay in building the new “campus” has worked in Stroll ‘s favor as plans have evolved and accommodated new developments, chief among them being a change in plans regarding the wind tunnel. Initially, it was not planned, as the team believed that it could be further developed by renting the tunnel from Mercedes .
After a disappointing 2021 campaign (based on the team’s performance last season, as well as their expectations for this one) it is understood to be the main reason for the radical change. Having cloned Mercedes’ aerodynamics concept, Aston Martin was similarly affected by the regulation changes during the break and has struggled to be competitive.
During a press conference via Zoom the previous week with GP Racing, Stroll explained that technical director Andy Green had convinced him of the advantages of owning a wind tunnel, and that the crux of the conversation was that “if you really want to be world champion, it’s a tool you’re going to need.” In doing so, Stroll is going against the ban on wind tunnels, which is currently planned for 2030.
“That change of heart cost a little bit of money,” Stroll said at the time. GP Racing gently pressed him on the matter, as it has become almost a cliché in Formula 1 newsrooms that any story about him will end up having an impact on his portfolio before the first paragraph is finished.
However, this is how he replied: “Not really. We invest to build a business for the future. I think I have never spent too much, nor have I lost.”
The Aston Martin car manufacturer was a totally different compared to the F1 team that has now joined the brand. Although it was doing most things right across its model range – an SUV was on the way, as well as a high-profile car designed in collaboration with Red Bull – its October 2018 IPO greatly overvalued the business. just as it was. When demand inexplicably plummeted throughout 2019, its share price followed a similar trajectory and turned to the market to raise more cash.
Stroll ‘s consortium bailed it out of bankruptcy for the eighth time in January 2020, and as the pandemic pushed finances further into crisis, it was the Canadian who stepped in, through his investment vehicle Yew Tree , to provide what it is described in London Stock Exchange filings as “£55.5m of short-term working capital support”. In effect, keep the lights on and wages paid.
Documents from the London Stock Exchange indicate the consortium’s rescue plan -better matching of supply to demand, greater attention to marketing, reduction of personnel in key areas, delay in the development of certain models-, but GP Racing remains curious as to where the seasoned entrepreneur draws the line between a distressed asset with plenty of potential and a hopeless basket case.
“You sit down with smart people and have a discussion,” he says. “This is more than a brand, it’s a 108 year old iconic British institution. Companies like this don’t come around very often, and they can’t be recreated – it would take another 108 years. To me it’s by far the leading brand in British luxury, and probably the world’s largest luxury brand.
“And then it was a matter of understanding, well, what happened to the business? Why did it get sidetracked? In the case of Aston Martin , after a few days of conversations, it became very clear to me what happened and what needed to be done.” .
“There was a lot of risk when I took over (CEO) in April last year, there were five things that needed to be reviewed. I have done that and now we are on the road to success. The business is now out of risk and the momentum is just phenomenal, as you’ve seen from our numbers. And as I said in my last quarterly report, I’ve delivered on everything I promised. So there was risk? Obviously there was. Are we past that risk? Absolutely.”
These figures are impressive, although with the caveat that the comparison of the first half of 2021 with that of 2020 (revenue increased from £146m to £499m, and operating loss fell from £159m to £38m). ) is complicated by the effects of the pandemic. Aston Martin has benefited from pent-up demand, but the company remains heavily burdened with debt and may be hit by stormy weather forecast for the global economy. City seem to hold this view as share price growth has stalled since the start of the year, following a strong recovery in the second half of 2020.
There are also doubts about the realism of the stated goal of turning Aston Martin into a world champion team within five years. Firstly, as Renault has amply demonstrated by changing its own targets over the last five years, this is easier said than done.
Potential uncertainties include the completion of the campus (the main building should be ready in 18 months, but the wind tunnel will not be operational until 2024), as well as work start dates for newly hired staff, due to periods that they must be out of work after disassociating themselves from their previous teams. Alfa Romeo’s Luca Furbatto will join as engineering director early this year, but the purported technical director, Dan Fallows , is currently the subject of a protracted dispute with Red Bull.
The scope and scale of all this headhunting is yet another indicator of how serious Stroll is about turning his F1 team into a world championship contender as part of a “billion dollar deal”. He speaks of the new campus as being different in form and function from the McLaren Technology Centre : the architecture will strongly reflect the Aston Martin brand and will be seen as a pleasant environment to work in, the best for recruiting and retaining key staff.
“We’re going to have what I think will be the best fitness center in F1 by far,” he says. “You’ll be able to run outside, walk around, and we’ll have outside entertainment, therapists, fitness instructors and physical therapists. It’s about a healthy body, a healthy mind.” In the plans for the three buildings on the campus, the one in the center focuses on that, on well-being and will have the best restaurant in F1. We’re going to have lots of farm-to-table food, with morning and evening fitness classes. The better you feel, the better you’ll think.”
While road car design and build will continue at Aston Martin ‘s base in Gaydon, some design and technology functions are expected to move to the new Silverstone campus, where they will join other businesses ‘to be determined’. F1 and the road car business now operate under the broader umbrella of Aston Martin Performance Technologies , for which Stroll has hired former McLaren man Martin Whitmarsh as managing director.
McLaren recently sold its Applied division, a move CEO Zak Brown said was a strategic decision because McLaren was more of a racing organization than a technology company. Stroll , curiously, does not consider them to be mutually exclusive.
” Formula 1 will be one of the main pillars, by far, of this group,” he says. “We will also have other businesses under Performance Technologies, and in years to come other racing activities perhaps. We will have a group of 700-800 professionals who will have knowledge that can be shared in other fields of business.”
“I don’t see having a performance technology business as a distraction from F1. The goal of this is to be world champions, that’s the purpose of the new campus and the recruitment campaign. It’s all based and focused on Formula One. 1 “, he concluded.
