John Caudwell, billionaire and founder of Phones4U, is intending to leave most of his wealth to charity after setting aside enough for his successors. Luke MacGregor
John Caudwell, billionaire and founder of Phones4U, is intending to leave most of his wealth to charity after setting aside enough for his successors. Luke MacGregor
John Caudwell, billionaire and founder of Phones4U, is intending to leave most of his wealth to charity after setting aside enough for his successors. Luke MacGregor
John Caudwell, billionaire and founder of Phones4U, is intending to leave most of his wealth to charity after setting aside enough for his successors. Luke MacGregor

Pandemic prompts world's wealthy to think about succession planning


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John Caudwell is thinking a lot about life and death these days.

The 67-year-old billionaire philanthropist said he intends to leave most of his wealth to charity, making him aware of the need to plan carefully for how his fortune will be used beyond his own lifetime.

“Succession planning is vital,” said Mr Caudwell, who sold UK mobile phone retailer Phones4u for £1.5 billion ($1.9bn) in 2006. “I just need to leave enough money to my beneficiaries for me to be happy that I’ve looked after them, and the rest all goes to charity.”

Since the pandemic began, the world’s rich have been making the most of more time at home and, in many cases, reduced asset values to outline the future of their wealth. Billionaires will transfer more than $2 trillion within the next two decades, according to research by UBS Group and PwC, and the virus is helping to accelerate that shift.

Succession planning is vital

“We’re having a big focus across the teams in EMEA to support clients around succession and estate planning,” said Jeremy Franks, head of wealth planning and advisory for Europe, Middle East and Africa at HSBC’s private bank. “It’s surprising how many wealthy individuals don’t have an up-to-date will.”

Succession plans are vital to preserving fortunes, but only about a third of family offices - the investment firms of the rich - had written blueprints by last year detailing how that would be done, according to research by Campden Wealth and UBS.

Sharp declines in global equities in March prompted some of the world’s wealthy to pass along publicly traded assets to descendants, with the lower values reducing capital gains and potential inheritance taxes.

While those markets have since rebounded, prices of illiquid assets favoured by the wealthy - such as real estate - are expected to slump in 2020, creating further opportunities to transfer wealth. Meantime, the World Health Organisation warned last month that the worst of the pandemic is still to come, and flare-ups are frequent even in countries where the virus appeared contained.

The lockdown “has prompted many of our clients to reflect on their succession planning in a wider sense”, said Philippe De Salis, a partner at multifamily office Stonehage Fleming. “It has acted as a catalyst.”

Some wealthy entrepreneurs are drafting wills for the first time, and lawmakers in nations such as the US, Australia and Canada have relaxed rules during the pandemic to allow electronic signatures for the documents. About two-thirds of the world’s 500 richest people have self-made fortunes, with most age 40 or older, according to the Bloomberg Billionaires Index.

“We’ve seen more focus on some of the bigger family issues, particularly with first-generation wealth,” said James Penny, head of Barclays’ UK International Private Bank. “Advice around the next generation and passing on wealth is something we’re going to focus on quite a lot more because of the unexpected events of this year.”

A handful of billionaire families aren’t letting the pandemic deter existing succession plans.

Wu Yajun, 56, one of China’s richest women, put her daughter in charge of their family office this year after transferring a stake in the property empire that made their fortune. Mexico’s Juan Francisco Beckmann, 80, recently handed over control of a New York City condominium to his daughter after giving her a stake last year in Becle SAB.

Mr Beckmann’s son is Becle’s chief executive, but other wealthy clans may struggle to entice younger generations to lead the family business amid rapidly shifting attitudes toward such things as climate change and income inequality. Most potential successors to family businesses have ambitions of starting their own firms after finishing their studies, according to research by EY and Switzerland’s University of St. Gallen.

We've seen more focus on some of the bigger family issues, particularly with first-generation wealth

“We’re now seeing families try to transfer businesses to a younger generation that is happier to own rather than operate, leaving them free to pursue different life goals,” said Ajay Wiltshire, a general counsel at accountancy and fiduciary firm Saffery Champness.

Philanthropy is often a major part of succession plans for the wealthy, as well. More than 200 members of the world’s rich have signed the Giving Pledge established by Bill Gates and Warren Buffett with promises to donate most of their money.

Mr Caudwell, a pledge signatory, said he plans to give away about 70 per cent of his fortune to charity, though that amount could increase. He said he doesn’t believe in bestowing huge windfalls to his offspring, but is relying on them to continue his charitable work after he’s gone.

“There’ll be a whole range of requirements in the way that they operate to make sure that money goes the furthest it possibly can,” he said. “That’s the way I operate, and that’s how I want them to operate.”

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
About Karol Nawrocki

• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.

• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.

• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.

• Met Donald Trump at the White House and received his backing.

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Sheer grandeur

The Owo building is 14 storeys high, seven of which are below ground, with the 30,000 square feet of amenities located subterranean, including a 16-seat private cinema, seven lounges, a gym, games room, treatment suites and bicycle storage.

A clear distinction between the residences and the Raffles hotel with the amenities operated separately.

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The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat