Perpetual Guardian chief Patrick Gamble about his hard lessons in property investing

NZ Herald

5 days ago

Gamble grew up in a working-class family living in Dublin and South Dunedin.
He has headed up the estate planning and wealth management firm since 2020.
In that time, he has overseen the high-profile move by owner Andrew Barnes to introduce a four-day working week.
Talking on the Money Talks podcast, he reflects on wealth and investment and what he has learned about it through his own experience.
Gamble studied law at the University of Otago on the assumption that it was a pathway to wealth and got into property investment as soon as he started earning a decent wage.
'As a graduate lawyer, I used that money to buy a couple of investment properties really early on,' Gamble says.
'You sort of buy one, the market goes up, you leverage the difference, then buy a second one.'
The lending rules were a bit looser in those days (the early 2000s), he recalls.
Growing up, his parents didn't have a lot of money.
He recalls his father working 50 hours a week at the freezing works just to break even with the dole and the financial pressure on the family during a strike.
'But they were very entrepreneurial,' he says.
When his mother started working in the 1990s, they invested in student flats.
'They'd leveraged heavily to buy some flats,' he says. 'I had to work every second weekend with Dad on those flats.
'We hated it. Dad was obsessed with cleaning up after all these students. You'd own one in a block of 12, but you'd end up cleaning up after all 12 sets of students.'
But despite that, Gamble followed in their footsteps as a property investor.
'I had no business doing it,' he says. 'I didn't actually know what I was doing. But I left university relatively wealthy on paper, certainly by the standards I had then.'
At that point, he headed off to Ireland, where he had spent a portion of his childhood, to have his OE and work as a lawyer.
'When I came back to New Zealand at 30, I was at zero because those properties were so far underwater,' he says.
'I had worked incredibly hard through my twenties, and I'd been well paid. All the money I'd earned in Ireland, and in Malta and other places, all of it was wiped out.'
Some people do make a lot of money out of property investment, 'but it is a game that burns a lot of people along the way,' he says.
'And those stories aren't talked about much.'
In part, Gamble was caught by timing, being hit by the Global Financial Crisis.
But there were other issues, he admits.
'One of the places I'd bought, a gang moved in, a close-by school shut down. These are the risks.'
It went from being a desirable area for young families to one where the families all left, he says.
Prices went down.
'If you read a book on property investment, this is the first thing they'll tell you. But when you're young, or just a bit naive, you just think property only goes one way,' he says.
'It's definitely not a one-way bet. You can lose money on property, and ... the bank is not your friend when things are not going well.
'When you're borrowing, they're very keen to lend. And then when you fall below an LVR [loan-to-value ratio] threshold, you're dealing with very different people'.
The thing for potential property investors to be aware of is how involved in the property you need to be, he says.
'The mistake that I made, the thing that really burned me, was when I went to Ireland, I basically just left them with a property manager and thought it would all be fine. Rent came in and bills went out.
'But what I didn't realise was all this other stuff happening around the properties that was driving their value down. I wasn't seeing the New Zealand market.'
Property isn't something that you can just put a substantial chunk of life savings into and then just forget about it in the way that you can KiwiSaver or a managed fund, he says.
'You have to actively be a property manager or a landlord. You've got to treat it like a job. And most people don't have the time for that.
'If you are fully committed to it, sure, there are lots of people who still manage to make money. But there are better investments for people who don't have the time.'
These days, it's Gamble's job – leading Perpetual Guardian – to manage family investments and wealth long term, although he doesn't specifically handle the investing side.
Perpetual Guardian's primary role is to look after people's interests when they're no longer able to look after themselves, he says.
'That's our fundamental job as a fiduciary and as a trustee. So if they've passed away and they left things behind them in any sort of difficulty, we can step in.
'But we also help people grow their money throughout their lives. We invest in people. We run a lot of funds. We run financial investments for people outside of our fund group as well.'
Perpetual Guardian made global headlines in 2019 when owner Andrew Barnes decided to launch the four-day working week policy.
'That's still a thing,' Gamble says.
The idea is that you try to streamline your days; you get rid of time-wasting things like long meetings and mucking about on your phone, he says.
'You try and get all your work done in four days that you would've done in five. And then you take the fifth day off. So it's not an idea that you are doing 80% of the work. It's the idea you're doing 100% of the work, you're just doing it in 80% of the time.'
But since Covid and the rise of remote working, the company also offers people the choice of working five days with three in the office and two at home.
'What Covid showed us is, for a lot of people, particularly in office work, you can work from home,' he says.
'You still can be efficient. You can monitor your staff, you can make sure that it doesn't all fall apart.'
In all the big centres, that is increasingly the preferred option, he says.
'You know, if you're in Auckland and you've gotta drive 45 minutes to work, it's just better to have two days not having to do that.
'The focus that we have is trying to allow people to have the flexibility in their job; to still live their lives and not be stuck having to get a babysitter in because they can't leave work and log in two hours later.'
Outside of his own work hours, Gamble has taken on the important role as honorary consul for Ukraine in New Zealand.
His wife is from the east of Ukraine and has been in New Zealand for 17 years, but his brother-in-law has been drafted and is fighting.
'When the war started, it was very personal for us,' he says.
Gamble says he was on the periphery of work his wife was doing, but when the ambassador, based in Canberra, wanted to appoint an honorary consul, he stepped up.
'They wanted a New Zealander because their main focus is trying to create links between their Government and the New Zealand Government, their businesses and New Zealand businesses.'
The goal is to try to maintain media coverage, political coverage, and keep the war in the public consciousness, he says.
'It's not a hard sell. The New Zealand Government – both sides of the House – have been very, very supportive.
'New Zealand has made economic contributions, it's made humanitarian contributions, it has made some military contributions through training,' he says.
'I would obviously advocate that we could be and should be doing more. I think it's very much in our self-interest. I think Ukraine is an absolute horrendous precedent for a country as isolated as New Zealand.'
In New Zealand, it is easy to forget how much we rely on the international rules-based order for absolutely everything in our lives, he says.
'From fuel that runs our trucks to harvest our food, everything in our world relies on the fact that you can ship goods or fly goods into New Zealand unmolested. If we let that rules-based order fracture, New Zealand is in a very difficult position.'
Three years in, the Ukrainian conflict has become a war of attrition, Gamble says.
'That's very much by design from the Russian perspective, because they're much happier taking casualties than the Ukrainians are. There haven't been the wins that they enjoyed in the first few months. Things become static.
'Then at the same time, you've had other conflicts around the world. There is only so much in the attention span.
'So that is part of the work [as consul] – to make sure that the right people, who can influence change and decision making, are still talking about it.
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Money Talks is a podcast run by the NZ Herald. It isn't about personal finance and isn't about economics – it's just well-known New Zealanders talking about money and sharing some stories about the impact it's had on their lives and how it has shaped them.
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