Billionaire Berggruen Takes Risks, Roams World: Interview

Nicolas Berggruen, 51, is polite, thoughtful, cultivated and fashionable -- from his un-linked French cuffs and slightly messy collar to his quiet loafers.

He is also a billionaire with an exotic portfolio.

There’s a commodity exchange in Kigali, Rwanda, and Richard Meier-designed housing for teachers in Newark, New Jersey. Berggruen himself lives in hotels and has no fixed address.

Quite the party animal in his younger years, the investor and philanthropist who studied philosophy in Paris, now spends a lot of time pondering the ways societies might best govern themselves.

Over a chocolate souffle -- Berggruen likes dessert -- he sat down with Bloomberg editors to talk about his ideas and the book he wrote with Nathan Gardels, “Intelligent Governance for the 21st Century: A Middle Way Between West and East.”

Hoelterhoff: Why governance?

Berggruen: The biggest determinant in our lives is culture, where we are born, what the environment looks like. But the second biggest determinant is probably governance, good governance or a certain kind of governance makes a huge difference in our lives.

Hoelterhoff: Singapore gets high marks in your book.

Berggruen: Singapore has been incredibly well managed. It was created out of the swamp, with a strong emotional idea: a safe place for mostly Chinese, but accepting other cultures and other races.

Newark Investment

Hoelterhoff: Just for contrast, let’s talk about a truly dysfunctional place, Newark, New Jersey. With most recent mayors jailed or indicted, it does not seem to illustrate good governance. Yet you have invested in a development called Teachers Village right downtown.

Berggruen: Newark used to be a thriving city of around 400,000 people, now down to around 250,000. It’s got infrastructure and is so close to Manhattan. If you look at downtown Newark -- pretty bad, so bad that you almost can’t think, well, we can build something new there. But potentially it should have a future. If we can be one of the early sparks to help it come back, let’s try.

We are constructing eight buildings from the ground up, teacher housing, student housing, three schools, one daycare, some retail. The idea is streets, real streets to create life. We were able to enlist a great architect, Richard Meier, who normally wouldn’t do this kind of thing, but because of relationships and because of the fact that he is actually from Newark, he agreed to do it.

Six Stories

Hoelterhoff: Architecture really is the key to creating community, getting away from Le Corbusier high rises. I read that apartment buildings don’t function if they are higher than six stories because parents can’t look down and call their kids.

Berggruen: Everything is going to be four to six stories.

Hoelterhoff: A member of your think tank is focused on Africa. What are you doing there?

Berggruen: Africa used to be much more productive, with most countries as agricultural producers. So if we can help agriculture, we will help the most, as opposed to investing directly in farms, which is pretty inefficient.

Most countries in Africa have the capacity to be great agricultural producers, but they do only subsistence production. So a family will produce for themselves and nothing more. Why? Because of the systems: The markets are not there to go beyond. So we thought: How can we help? We have decided that we will try to establish commodity exchanges.

Rwanda Exchange

Commodity exchanges have a lot of advantages. One, you are helping transparency. Two, they are not political. It’s institutional building. It can survive any environment in theory.

We are starting our first one in Rwanda.

Hoelterhoff: The place functions? How’s garbage collection compared to say, Lagos, a nightmare?

Berggruen: They have more than garbage collection: They have a monthly cleanup day where everybody goes into the street, including the president and the ministers. The place actually functions, crime is incredibly low. Though, yes, it’s had the most troubled past. So the turnaround from genocide to reasonably peaceful today is remarkable.

Hoelterhoff: What would be traded in Rwanda? Is it grain?

Berggruen: A lot of coffee.

Hoelterhoff: Then there’s India.

Indian Infrastructure

Berggruen: We have started five businesses in India that are all infrastructure-related: education, vocational schools, equipment rental for construction, car rental, and budget hotels. These are infrastructure-related things that will participate in the growth of the economy.

India is an incredibly difficult place to get anything done: big corruption. Our record is mixed. Car rental, we are No. 2 in the country, up from nothing. With educational schools we are struggling.

Hoelterhoff: How do you pay attention to all this? Is that why you travel all the time?

Berggruen: Well, in truth, I think we do too much. But I wake up in the morning and then I go to bed every day, no exceptions. In between I think about things.

To order “Intelligent Governance for the 21st Century,” click here.

(Manuela Hoelterhoff is executive editor of Muse, Bloomberg’s arts and culture section. Any opinions are her own. This interview was adapted from a longer conversation.)

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