Profile: Jeremy Kraft, UK FD of CB Richard Ellis

Dapperly dressed in a stylish dark suit, Jeremy Kraft, finance director of the UK arm of CB Richard Ellis, gives no hint of his love of rock ‘n’ roll music, as he greets you with a firm handshake in one of the recently-merged company’s refurbished offices.

The offices are in keeping with CBRE’s new status as the biggest property services company in the UK. Kraft will shortly be moving to new, no doubt equally luxurious, premises in Paternoster Square, to accommodate its intake of more than 700 new staff members following the merger of CB Hillier Parker and Richard Ellis in July to create CBRE.

But based here for now, in the West End, he is bubbling with enthusiasm, and begins chatting about the ‘exciting industry’ he works in. Kraft, who is just 38, admits having been seduced by the property industry in the same way he was seduced by the ‘bright lights of the West End’ and the entertainment clients he dealt with during his accounting training days at HW Fisher.

Kraft chose to work in the property services business after cutting his teeth in a variety of finance roles, ranging from financial management to IT consulting and systems implementation. This included back-office finance work at advertising agency D’Arcy’s (now part of Publicis) and pharmaceuticals giant SmithKline Beecham.

Where he is now is no accident, but a purposefully orchestrated move.

‘Property services is one of the last industries that has not gone through consolidation,’ Kraft explains. ‘Joining CB Hillier Parker was an opportunity to be part of something really exciting and dynamic.’

The proof of this came just 18 months later, when the global merger with Insignia Richard Ellis was completed, creating the world’s largest property services company. The potential for consolidation was the key factor for Kraft, who had already missed the boat in both the advertising and accounting industries.

‘In our industry, the top five companies account for just 10% of the market, which shows you how fragmented it is. When the job came up at CB Hillier Parker, we spoke about the likelihood of consolidation and it was the stated objective of Richard Ellis that it would be growing not just organically, but through acquisitions.’

Clearly ambitious and up for the challenge, Kraft has jumped in at the very top, and now commands the finances of a business with revenues of £140m, which employs 1,400 people operating in London, Liverpool, Leeds, Manchester, Bristol, Edinburgh and Glasgow.

The newly-merged business provides a prodigious array of services, including advising on brokerage, leasing, investment transactions and the management of funds used in property investment. ‘The key word here is “consultant”,’ says Kraft.

In terms of financial reporting and corporate governance, the company is private and so it is not directly impacted by regulatory changes in the UK brought about by Higgs and other reforms. But it must comply with many of the requirements of Sarbanes-Oxley, as it has public debt in the US.

‘As a result of Sarbanes-Oxley, we have had to self-certify part of the business. This has not been an issue for me, because if I don’t have any confidence in the numbers, then I shouldn’t have the job.’ But Kraft is discomforted by the fact that a US regulatory body ‘will have supposed authority in the UK’ and the uncertainty the laws will create. He is also in favour of international accounting standards, but only if implemented in five or 10 years.

Returning to the business challenge at hand, post merger, Kraft will be focused on creating a strong European platform and expanding the company globally, building on its achievements in accounting and other professional services. But before any of this can happen, the merged company has to begin functioning as a single entity. Despite more than doubling in size from 700 staff to 1,400, Kraft says this process is going very smoothly.

Key to this has been careful planning.

Even before the merger was signed and sealed, Kraft set up a dedicated project accounting team within CB Hillier Parker, while he was FD, that focused its energies on developing an integrated accounting model.

At the same time, he also created a ‘cross-company team’, which started working three or four months in advance. Kraft, who admits that one of his management philosophies is ‘you are never to old to learn’, turned to an unusual and unlikely source of advice on the merger – in this case CB Hillier’s auditor, Andersen, which at the time was embroiled in the Enron scandal. The firm had just completed its UK merger with Deloitte & Touche, now simply Deloitte, and the advice it gave Kraft focused on getting the people on board first and then the systems and other elements would follow.

Andersen’s advice was simple: ‘Get people together, you can never communicate enough. Reassure them and give them confidence. Then, in terms of systems, prioritise. Finish one thing before you go onto the next.’

In terms of systems, Kraft says the team focused on core priorities – getting areas like phones and email systems working so that people from the two companies could communicate with each other.

And the proof, says Kraft, is plain to see. ‘We now have an operations board with representation from both businesses and it is going very well.

Now it is just a process of migrating the remaining systems,’ he explains.

He has adopted an almost identical approach to running the finances as he has to the merger. His role as finance director, as he sees it, is to ‘enable people to manage the business by providing simple, easy-to-understand financial information’.

‘My experience in professional services is that if you can’t relate to non-finance people then you can’t manage a business. My job is to give people information so that they can make informed decisions, not by scaring them into making change,’ he says.

Another key component is having a strong team behind him, and he admits it is always good to have ‘people snapping at your heels’. As part of this holistic approach to management, he believes businesses need to change and evolve and feels it is the role of finance team to create the momentum.

Looking ahead, Kraft is optimistic and is full of confidence that the UK operations of CBRE can achieve annual growth of around 15%, a goal stated by Mike Strong, head of European operations. He admits that the property advisory market has been hit by the slump in the economy like every other industry, particularly in low occupancy rates, but says CBRE will always provide a much-needed service: ‘Property is a major cost for organisations. We can take care of this, as we really know how to manage property, allowing our clients to focus on their core competencies.’

Then there is also the matter of possible involvement in the London’s Olympic bid. CBRE was appointed property advisers to the 2012 bid committee, but Kraft says that this was for ‘an initial, temporary period of time’ and it has not yet become a full-time post.

If Kraft’s predictions about consolidation and major change in the property game prove accurate, by the time 2012 rolls around, the stakes could be far higher.


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