Twelve years ago, Nicolas Berggruen sold his
apartment, which was filled with French antiques, on the 31st floor of
the Pierre Hotel in Manhattan. He said he no longer wanted to be weighed
down by physical possessions. He did the same with his Art Deco house
on a private island near Miami. From that point on he would be homeless.
Now he keeps what little he owns in storage and travels light,
carrying just his iPhone, a few pairs of jeans, a fancy suit or two, and
some white monogrammed shirts he wears until they are threadbare.
At
51, the diminutive Berggruen is weathered, but still youthful, with
unkempt brown hair and stubble. There’s something else he hung on to:
his Gulfstream IV. It takes him to cities where he stays in five-star
hotels. In London, he checks into Claridge’s. In New York, he’s at the
Carlyle Hotel. In Los Angeles, he takes a suite at the Peninsula Beverly
Hills.
His social calendar tends to be full no matter where he is. A dual
citizen of Germany and the U.S. who speaks three languages, Berggruen
makes a point of having lunch and dinner each day with someone
intriguing. It could be an author, a famous artist, or a world leader.
He prefers to meet them at restaurants near his hotel. He makes
reservations for three even when he only plans to dine with one. That
way he doesn’t get stuck at a small table. He leaves room for dessert.
He adores chocolate.
In the evening, Berggruen is frequently photographed at parties with
attractive women such as British actress Gabriella Wright. “You could
easily look at his life and say, ‘Oh, my gosh, he’s always got a pretty
girl on his arm. He’s at every party around the world. Is he just a
giant playboy?’ ” says his friend Vicky Ward, a contributing editor to
Vanity Fair. Maybe. Every year, Berggruen throws a party at the Chateau
Marmont in Hollywood during Oscar week and invites all his friends. They
rub shoulders with Hollywood types such as Paris Hilton, Woody
Harrelson, and Leonardo DiCaprio.
Berggruen can afford to live like this because he’s chairman of
Berggruen Holdings, a New York-based private equity firm that buys
troubled companies and fixes them up. Currently it owns more than 30,
including an Australian farming operation, a British life insurer, a
Portuguese book publisher, a German department store chain, and real
estate development projects in Turkey, Israel, India, and Newark, N.J.
According to its website, the privately held holding company’s annual
revenue is $5 billion. It throws off $250 million in earnings each year.
Berggruen’s personal worth is estimated by Bloomberg Markets to be
$2.5 billion.
But Berggruen isn’t satisfied with mere wealth and glamour. He also
wants to be taken seriously as an intellectual. As the financial crisis
unfolded, he became convinced some political systems were failing in
America and Europe. He thought he could help rescue them by using his
disposable income to advance wonky reforms. By his own admission, he
didn’t know much about such matters, but that didn’t stop him.
In 2009 he started the Nicolas Berggruen Institute, a think tank
whose stated mission is to improve global governance, and promised to
spend more than $100 million to further its goals. In California he’s
pushing to overhaul the fiscally troubled state’s tax code, education
system, and problematic initiative and referendum system. He would like
to see greater political integration in crisis-plagued Europe,
preferably under a single leader. He thinks it would be great if the
Group of 20 nations become more of a permanent global policymaker.
That’s a large agenda for a balance sheet repairman who only recently
began examining such matters. Nevertheless, he got prominent
Californians and former world leaders to lend their names to his
efforts.
Berggruen will need more than money, charm, and the right names for
his think tanks to save the world. His transformation from pleasure
seeker to policy guy is a work in progress. Some of his ideas are not
exactly made for prime time. For instance, he argues there’s much that
Western democracies can learn from autocracies such as Singapore. As he
puts it admiringly, the political leaders there really know how to get
things done.
“Can I do something really rude?” Berggruen asks in an accent that’s
more French than anything else. “I cannot resist. Can I steal a French
fry?”It’s a Saturday afternoon in July. He’s at the Mark Restaurant by
Jean-Georges, a block from the Carlyle. He’s finished his pea soup and a
plate of artichokes. He becomes animated when he discovers there are
French cream puffs on the dessert menu. “This is very unhealthy, but I
love dessert,” he says. “Will you join me? Oh, my God, they have lots of
bad stuff!” He asks for extra chocolate sauce, too.
For many years, Berggruen avoided the media. When a Dutch magazine
profiled him in the 1990s, he bought up every copy of the issue to
protect his privacy. Now, as a would-be policymaker, he frequently dines
with reporters. Berggruen insists he isn’t interested in publicity for
himself. He says he just wants support and attention for his think tank,
which has a 12-person staff. “I will do anything to further the
institute,” he says solemnly.
Some of his appetites and ambitions are surely inherited from his
father, the late Heinz Berggruen, a celebrated art dealer and collector
who left Germany in 1936 to avoid persecution for being Jewish. After
World War II,
Berggruen moved to Paris, where he became one of Pablo
Picasso’s dealers. He amassed an extensive collection of the artist’s
work. Eleven years before his death in 2007, he sold much of it to the
German state for a nominal fee. Today it’s housed in the Berggruen
Museum in Berlin.
Nicolas Berggruen grew up in Paris. At a young age he immersed
himself in French politics, history, and philosophy. Still, he didn’t
care much for school. He attended the Institute Le Rosey in Switzerland,
known as the “School of Kings” because so many alumni are members of
royal families. Berggruen wasn’t destined to join them. He became a
Marxist and refused to learn English, calling it the language of
imperialism. The school asked him to leave. He ended up getting his high
school diploma from the French government.
Unexpectedly, Heinz Berggruen thought his rebellious son had a future
in business. He arranged a summer internship for him with his friend
Max Rayne, a British real estate developer and member of the House of
Lords. His father was right: It turned out that Nicolas liked capitalism
after all. Berggruen learned English and got his undergraduate degree
from New York University in 1981. After graduating, he spent almost two
years working for the Bass brothers in Philadelphia. As soon as he
could, he returned to New York. “He was out every night,” says his
friend Jonathan Bren, another veteran of the Swiss boarding school
circuit. “A lot of people just thought he was a rich European party
guy.”
In 1988, Berggruen created Alpha Investment Management, a fund of
hedge funds, with the late Julio Santo Domingo Jr., the scion of one of
Colombia’s richest families. The firm handled more than $2 billion, but
Berggruen wasn’t content with managing other people’s money. He sat in
his office and chased his own deals with his own cash. After the savings
and loan crisis, he bought discounted commercial real estate debt for
himself from Resolution Trust Corp. and profited as the market
recovered. He acquired a troubled Spanish soft-drink company, turned it
around, and sold it to Schweppes.
Along the way, Berggruen assembled a collection of works by Andy
Warhol and bought his private island hideout in Florida and a bachelor
pad in the Pierre in New York. He never married. “He’s had some very
nice girlfriends in the past,” says his brother Olivier. “We were
somehow hoping that he would create a family.” The family didn’t know
what to make of his decision to sell his homes in 2000, either.
Berggruen says he simply got tired of his fancy digs. “I’m not that
interested in material things,” he says. “As long as I find a good bed
that I can sleep in, that’s enough.”
Berggruen began spending more time in Los Angeles, at the Peninsula
Beverly Hills. There were plenty of deals to do in the mid-Aughts. He
spent a decade assembling Portugal’s largest media company and sold it
to Spain’s Prisa in 2006. He bought Foster Grant, the American
sunglasses company, in 2003. He sold it in 2009 to a French eyewear
manufacturer, making $400 million.
Such triumphs, however, no longer seemed to thrill him. He also
sounds jaded about his Oscar parties, calling them “frivolous” and
“stupid.” It became a chore for him to manage the guest list. “There are
the people who don’t get invited and are mad,” he sighs. Berggruen
found something to fill the void. He returned to the subjects that
fascinated him as a youngster: philosophy and politics. “Frankly, I
think I am a fool,” he says. “I never should have stopped.”
Berggruen concedes he had a lot of catching up to do. He turned his
suite at the Peninsula into an intellectual salon. He drafted two
professors from the University of California at Los Angeles to instruct
him in Eastern and Western philosophy. “Broadly, I think Nicolas is
interested in moral philosophy, having to do with questions of right and
wrong, good and evil, purpose, agency, action, topics like that,” says
Brian Copenhaver, a UCLA specialist in Renaissance philosophy who was
one of the mentors.
On other afternoons, Berggruen sat with four local political science
professors who tutored him in the fine points of Eastern and Western
governments. As he digested Confucius and Plato and reread Sartre, he
came up with his think tank’s mission. He believes developed countries
are in crisis because their leaders are too focused on getting
reelected. The result is political gridlock in such places as
Washington, D.C., and California.
Berggruen believes at least part of the solution to Western political
paralysis is the Asian equivalent of the smoke-filled room. “If you can
do this behind closed doors, you can force or push decisions, which
happens in autocracies like Singapore and China,” he says. “The
disadvantage is that it’s not very transparent. The advantage is that
the people in the room, even if they have ideological views that are not
along the same lines, can come up with compromises and solutions.” With
Nathan Gardels, one of the institute’s senior advisers, he’s co-written
a book in which he explains this unorthodox notion. It’s called
Intelligent Governance for the 21st Century: A Middle Way Between West
and East.
Berggruen would like to test his ideas in California, which is famous
for political paralysis. Governors of both parties come and go, but the
state legislature remains in the hands of the Democratic Party, which
answers to public employees’ unions. Meanwhile, voters approve mandates
that largely dictate the budget process. Since the real estate market
crashed in 2008, California has been plagued by deficits.
Berggruen was hardly a household name in California; he wasn’t even a
resident. (He pays taxes in Florida.) The only thing he was known for
was his yearly soiree at the Chateau Marmont. That didn’t seem to hurt
him. He persuaded 15 prominent Californians to help draft a reform
package. He wooed former Democratic Governor Gray Davis over lunch at
the Peninsula. He won over Bob Hertzberg, a former California Assembly
Speaker, at an airport in faraway Panama. He enlisted former Republican
U.S. Secretaries of State Condoleezza Rice and George Shultz. Berggruen
also recruited business leaders such as former Yahoo! Chief Executive Officer Terry Semel and Google Executive Chairman Eric Schmidt. He assembled them in a group he called the Think Long Committee for California.
In a series of meetings, some of which Berggruen hosted at Google’s
headquarters in Mountain View, Calif., the committee came up with a plan
released in November 2011. The members embraced his idea that the
California legislature be policed by a “citizens council for government
accountability” comprised of ex-politicians, university presidents, and
business leaders. It would have the power to subpoena witnesses and
place its own initiatives directly on the ballot.
Naturally, there are Californians who find the notion of an unelected
advisory board in Sacramento questionable. “Berggruen assembled a
blue-ribbon panel of notable Californians to come up with their vision
for fixing California,” says Thad Kousser, an associate political
science professor at the University of California at San Diego. “Lo and
behold, the first big idea was California needs a big blue-ribbon panel
that bypasses all the existing political processes.”
Others are more charitable. “You know, when you have those kinds of
resources at your disposal, you can buy a football team, you can buy an
island, or you can try to make government and politics work better,”
says Dan Schnur, director of the Jesse M. Unruh Institute of Politics at
the University of Southern California. “I give him a lot of credit for
trying.” Schnur, who was the communications director for John McCain’s
2000 presidential campaign, says Berggruen’s biggest challenge may be
keeping the electorate awake when he pitches them his governance reform
ideas. “It’s not the most scintillating stuff,” Schnur warns. Berggruen
says Schnur has a point. Nevertheless, he hopes to begin putting his
proposals on the state ballot next year, starting with the tax-reform
plan.
He is concerned about Europe, too. Considering the Greek debt crisis
and the euro area, Berggruen believes that more democracy is needed, not
less. “In theory, Europe should be quite democratic,” he says. “It’s
actually run by the heads of two countries, Germany and France. It’s
incredibly dysfunctional.”
In 2010, Berggruen flew to the North Sea island of Boken to visit
former German Chancellor Gerhard Schröder at his vacation home. Schröder
was eager to help him. “We talk quite often,” says Berggruen. “He calls
up with ideas.” Berggruen was also able to persuade ex-British Prime
Minister Tony Blair and economist Nouriel Roubini to join the Berggruen
Institute’s 27-member Future of Europe Committee. The Future of Europe
Committee champions the establishment of a stronger Continental
government. That way, economically powerful countries such as Germany
and France might be more inclined to assist their weaker southern
neighbors than they are now. Berggruen says he’s aware of how difficult
it will be to prevent the dissolution of the European Union, but
believes it’s worth fighting for.
In the meantime, he gets to hang out
with interesting people. Over lunch in Beverly Hills in late July, Berggruen says he’s never
enjoyed himself more. He finishes his grilled fish. He’s in no hurry to
leave. He has nothing planned until dinner. Is he rushing off to a party
after that? He shakes his head. “I don’t go to that many parties
anymore,” he insists. “I’m really spending almost all my time on this.”
He checks his iPhone. “Oh, look,” he says. “It’s an invitation to a
party later tonight.” It’s an awkward moment for a guy who wants to be
taken seriously. “Well, I won’t go,” he says. “I can’t go.”
By Devin Leonard-Bloomberg ©2012 Bloomberg L.P.
