Xavier Niel: the French establishment’s insider-outsider
The entrepreneur has prevailed at Europe’s biggest shopping mall operator, but don’t call him an activist
French billionaire Xavier Niel built his reputation and fortune on telecoms group Iliad and investments in technology start-ups from Paris to Silicon Valley.
Less visible has been the 53-year-old entrepreneur’s interest in real estate. He has assembled a portfolio of mansions in spectacular locations such as the Place des Vosges, office buildings near the Seine and a five-star hotel on the slopes of Courchevel.
This side hustle helps explain why Mr Niel intervened in September when Europe’s biggest shopping mall operator, Unibail-Rodamco-Westfield, proposed a controversial capital increase after a steep fall in its share price. Mr Niel believed investors proclaiming the death of retail real estate were wrong and the dilutive share sale was unnecessary.
He mounted an audacious activist campaign against the company, teaming up with Unibail’s founder Léon Bressler. Unusually for cosy corporate France, they triumphed.
But according to people who know him, something else may also have motivated the man that Bloomberg ranks as France’s ninth-richest, with a fortune worth $7.2bn. The computer hacker who grew up in a working-class Paris suburb, never finished college and whose first business success was in sex chat sites, still enjoys disruption.
“He loves opposing the establishment and being unorthodox. I’m sure he’s having a blast” with Unibail, said Solveig Godeluck, who co-wrote a biography of Mr Niel called The Pirate’s Way. “This is also his way to position himself as a new godfather of French business.”
The tycoon’s influence and image in France has grown and changed since he founded Iliad in 1990, undercutting incumbents’ prices on broadband and mobile to the joy of consumers. Today, Iliad has a market value of €10.4bn, with 20m subscribers in France, more than 6m in Italy and will soon have 15m in Poland once it closes a takeover there.
Today, while maintaining his rebellious streak, Mr Niel has clearly joined the elite. One sign of shifting perceptions came in 2016 when former president Nicolas Sarkozy, who once derided Mr Niel as the “peep-show man” for having invested in sex shops in the 1990s, flew on the entrepreneur’s private jet to watch a Champions League football match in London.
In an interview after winning the Unibail vote, the billionaire told the Financial Times that he welcomed the outcome but pushed back against being lumped in with aggressive US hedge funds. “We are not activists, but rather rebellious shareholders,” he sniffed.
Colleagues and friends describe Mr Niel as brilliant, awkward and loyal to a small circle of allies. The long-haired, jeans-wearing executive has long been intensely private, apt to suing journalists or rivals who reveal details about his personal life or business. But in other ways he is an atypical billionaire: many people use the informal “tu” to address him and he sometimes travels to meetings on an e-scooter.
Mr Niel has also played an important role in nourishing France’s tech scene, first as a prolific business angel and then as the founder of Station F, the world’s biggest start-up incubator. Closest to his heart as “un self-made man” was the opening of 42, a free programming school with no teachers and no books, but open to all who pass a brutal month-long entry exam regardless of academic record or social class.
“When he talks about 42, he often has tears in his eyes,” recounted Jean de La Rochebrochard, who invests in about 100 start-ups a year for Mr Niel’s Kima Ventures. “He is really proud of it and he’s right to be” since it helps address France’s entrenched inequality.
Both were also big real estate projects: it cost €250m to turn an old rail depot in south-east Paris into the gleaming Station F campus and Ecole 42 cost €70m to build. They have become obligatory visits for French politicians and foreign diplomats eager to endorse what President Emmanuel Macron called the “start-up nation”.
The seeds of Mr Niel’s admission to the French establishment were sown earlier. In 2010, he teamed up with the late fashion businessman Pierre Bergé and investment banker Matthieu Pigasse to rescue the Le Monde newspaper from near-bankruptcy. The “BNP trio” were not initially popular among the left-leaning paper’s journalists, but their investment modernised its digital operation and eventually helped reverse years of revenue declines.
The Le Monde investment “was an important entry point for him to the French establishment, and he’s since built up relationships across the political spectrum and business”, said Olivier Rosenfeld, who was Iliad’s chief financial officer from 2001 to 2007 and now works for Mr Niel’s private vehicle that invests in telecoms.
“Xavier plays a long game: he became part of the French elite on his own terms,” he added.
Soon afterwards, Mr Niel began a relationship with Delphine Arnault, the daughter of the billionaire founder of LVMH. The pair have two children together, and he also has two older children from a previous marriage.
The pairing has meant Mr Niel is no longer always the centre of attention. Outside a Louis Vuitton fashion show last month, he waited patiently as Ms Arnault had her photo taken by paparazzi. Then they took their places in the front row.