/ 30 June 2008

Shy tycoon funds MBA for the poor

Very few people have heard of Christopher Chandler, a reclusive billionaire from New Zealand, and that is the way he likes it. But the secretive tycoon wants to leave his mark on the world by bankrolling a business school for developing nations.

Chandler, a small-town bee­keeper’s son who has built a fortune estimated at $1,7-billion, is a sort of antipodean version of Warren Buffett. Along with his brother, Richard, he has bought and sold chunks of Hong Kong property, Brazilian telecoms, Japanese banks and Russian electricity enterprises.

Throughout his career, the 48year-old Kiwi has maintained the lowest of profiles — in Forbes‘s annual ranking of the richest, he is represented by a silhouette because no public photo of him seems to exist. But in a rare overt gesture, Chandler has committed $50million to the creation of a unique school in the United States aimed at nurturing entrepreneurs with business ideas to help poorer countries step beyond poverty.

The Legatum Centre for Development and Entrepreneurship opens its doors in Boston this year with an initial crop of 12 postgraduate students from nations including Rwanda, Nigeria and Pakistan. The centre, which is attached to the Massachusetts Institute of Technology, is intended to create a generation of business leaders in poverty-stricken parts of the globe.

The centre is headed by Iqbal Quadir, a former Wall Street banker who created Grameenphone, a $4billion company that popularised cellphone use in rural Bangladesh by allowing handset owners to sell airtime to their friends and neighbours.

“We want to take people with half-baked ideas and help them to complete the baking process,” says Quadir, who came up with the idea for the school and was introduced to Chandler through mutual friends.

Among the Legatum centre’s initial crop of scholars are students working on ways to harvest rain­water in eastern Africa and to incubate cellphone technologies in Pakistan. A doctor from Nigeria wants to build a business using mobile technologies for medical diagnosis in his home country. And the Sri Lankan founder of a new media laboratory in London has taken a place at the centre with hopes to commercialise south Asian art.

One of Legatum’s MBA students, Amy Banzaert, is an engineer working on a method of producing low-cost charcoal in Haiti using sugar-cane waste instead of timber. She points out that deforestation rates are approaching 98% in Haiti.

“Charcoal is typically made out of wood and sawdust — people have been doing that since the dawn of time,” she says. “That works very well until you start facing deforestation. It’s led to environmental consequences and poverty consequences. People are choosing between eating and buying fuel.”

The centre is named after Chandler’s Dubai-based Legatum investment empire. “Aid plays an important part in development but it’s a very limited role,” says Alan McCormick, managing director of Legatum Global Development. He points out that the rich countries of the Organisation of Economic Cooperation and Development have given ­$650billion to sub-Saharan Africa since 1960 — but much of the continent remains deeply impoverished.

“We came to the conclusion that business is the key driver of development — in fact, business is development,” he says. “You have to empower individuals to set up businesses and engage in enterprise.”

The Legatum centre is in stark contrast to MBA schools where graduates generally aim for well-paid jobs in consultancy or industry.

“We have a very successful fund here,” says McCormick. “But we’re looking to invest in people, ideas, situations. We want to build the intellectual capital of developing nations.” —