The third-generation member of the Mansour family, one of Egypt's most successful is helping the family invest for the long-term through direct investments. He tells us about learning business at a young age, and his long-term outlook.
Family matters to Loutfy Mansour. Beneath his sharp suit, the 33-year-old wears a number of bracelets given to him by his wife and son. “I get one every Father’s day and birthday, and things like that. They say things like ‘daddy, I love you’. I’m running out of space,” he laughs, proudly showing how they are crowding out the watch on his wrist. “Part of being an Egyptian is being a close-knit family,” he adds.
Few are as close as the Mansours, whose conglomerate the Mansour Group has 60,000 employees and revenues of $6bn, but is still very much a family-run business. Cairo-born Mansour is chief executive of its investment vehicle, Man Capital, and one of four members of the third generation of the family to work in the group.
The conglomerate originated with the cotton business founded in 1952 by Mansour’s grandfather (also called Loutfy), who was one of the first Egyptians to graduate from Cambridge university.
The business flourished until it was nationalised by the then Egyptian president Gamal Abdel Nasser, forcing the original Loutfy to relocate to Sudan to work for a cotton family. That business was also nationalised, and he became a cotton broker in Switzerland. His sons were in the US at the time, stranded until Egypt moved back to a market economy in the early 1970s.
The Mansours’ big break came when they set up a General Motors dealership. “GM were talking to banks about possible partners, and they said there were these three American-educated brothers in Alexandria,” Mansour told the FT in his first ever interview.
“My father and uncles understood the US mentality, which was always to be transparent, to be clear if you can do something or not, but more importantly to build the partnership for the long term.
“They said, ‘If one day we can sell 40 cars, then that would be amazing’,” he says. The group is now the biggest GM dealer in the world, selling 76,000 vehicles a year. The Mansours also hold the Caterpillar dealership for Egypt and six other African countries; manufacture and distribute Imperial Tobacco products; own Egypt’s McDonald’s franchise; and run several retail chains — among other things.
From a young age Mansour was immersed in the business. “As a kid I would go to the office. I remember the first time I saw someone sell a car; what he said to the lady as she walked through the showroom. Then I’d go into accounting and see them with their calculators,” he says. “I was fascinated.”
It was a question of learning by observing. “It was a natural thing,” Mansour says. “I listened to my father speak on the phone, saw how he conducted a meeting, went to presentations. He’d ask me, ‘What did you learn? What did you find interesting? What did you think of this?’ Slowly, I learnt.” Did that put pressure on him? “I think I put pressure on myself. Eighty per cent of family businesses don’t succeed in the third generation. I didn’t want to be that story.”
After studying at Georgetown University, Mansour worked for Goldman Sachs for two years, until his uncles asked him to join Mantrac Group, the Caterpillar distribution business, when Mansour’s father Mohamed became Egypt’s minister for transport.
“I went into several divisions, like sales and marketing, learning the business,” he says. “The way you create value in a company is through its people, so I had to get to know the people at several levels and to work my way up to get credibility with the family and my colleagues.” He became chief executive in 2006.
In 2009, Mansour says, “we decided that we wanted to diversify our risk and to build new ‘verticals’ for the group”, and in 2010 the investment business Man Capital was created.
According to its website, Man Capital is a “family office and family-owned private equity and alternative investment fund”, but Mansour is not fond of the terms “family office” or “private equity”.
“We try to buy and build companies,” he says, over a long time frame. “We don’t have an exit strategy. When we talk to management we say that we will hold it for the next 30 years,” he says. “There is no J-curve: we can invest today and do nothing for two years. We don’t have to report something every quarter.” There is no financial engineering, and even the 2012 acquisition of OTS Logistics — a company with $700m of sales — was completed without debt.
The outlook is global. “I wanted a cosmopolitan team,” Mansour says. “That was in the blueprint. I have seen the added value when you have someone you can send to do a project or a task in a certain country.” The 10-strong team includes people from Britain, the US, Switzerland, France, China and India.
Since 2010, Man Capital has completed 10 deals, including investments in Millennium Offshore Services, which provides services to the offshore oil and gas industry; Educas, which invests in private schools; and Nigerian telecoms infrastructure provider IHS Towers.
The aim is to make just one or two acquisitions a year. “We don’t want deal-junkies,” Mansour says. The investment business is firmly about “wealth generation, not preservation”, and is integrated with the wider group. “We bring managers into the companies when we need to, for several months and in one case for a year,” he says. “Why not make use of them?”
“We were speaking the same language. He was still a very hard negotiator, though,” he laughs.
It is a far cry from the beginnings of the family business. So how are things different to his grandfather’s day? “It is much more analytical now,” Mansour replies. “Back then, a lot of things were done on gut and hunch and if you have that, that is second to none, but now the world is obsessed with numbers.”
One of the first people in Egypt to use the internet in the 1990s, Mansour is a keen user of technology. “I have WhatsApp groups with all my management teams, we Skype and we have started using Slack to transfer files.”
He is also aware of responsibilities from one generation to the next. Technology is part of that, he says, but it can also overwhelm.
“One of the big differences between our generation and the older one is that you have to make decisions faster so you have to not over-inform yourself, or over-communicate. You need a lens so that you can zoom in on what is important,” he says.
As Mansour learned on all those summer jobs, the human side is important too. “You can’t look at a spreadsheet and say ‘this is how the business is going to grow’, you have to understand the nuts and bolts of how the business works, and the managers.”
Now, the plan is to grow the brand globally. “The US is still an attractive market there for us, and we have a lot of affinities there. The western world is quite close to us,” Mansour says.
The group is looking at the education, healthcare and food and beverage sectors, keen to identify successful businesses that it can introduce to the markets in which it has a strong presence.
Expansion is not the only aim, though. “It is a conscious decision to have the family name on the business, and it is a big deal. The name is essentially the brand and it has to remain squeaky clean,” Mansour says.
“My father always said: ‘I won’t leave you the biggest companies or the most money, but I will leave you the best name.’ You have to take care of that.”
Impact of the Arab spring
Like many successful families, the Mansours have developed political links over the decades. Mansour’s father Mohamed served as transport minister in the regime of former president Hosni Mubarak, although his tenure was brief and he had left office before the Tahrir Square demonstrations in 2011 led to the overthrow of the government.
He adds: “We have a presence in over 100 countries, so when one country is down, another is up — it’s all part of our diversification strategy and long-term approach, which allows us to mitigate short-term noise. It means we’re not thinking of the exit. We’ve been investing in Egypt for decades.”Mansour remains sanguine about events, adding that whatever happens politically, the family is committed to the country. “Of course the situation has been a concern, but we’ve seen many cycles over the years. As a business we try to navigate those. Let’s not forget, Egypt has a population of over 80m, with a huge consumer base. Egyptians will still need cars, services and so on,” he says.
Certain members of the family are now based in London. Is that because they find the situation in their homeland untenable? “Not at all,” Mansour replies. “Man Cap was founded in 2010, before the Egyptian Revolution. The family office is an integral part of the Mansour Group’s strategy for future growth and London is the best place for expanding internationally.
“Coming to London was a strategic move,” he says.
Copyright The Financial Times Limited 2016. All rights reserved. Re-printed with permission.