For someone who left school at 15, opting out of a university education, Daniel McGowan has come a long way in the 20-odd years since. His investment company Centaur Group Holdings has $500m worth of assets under management – accrued in less than four years.
One division alone – mining – is expected to see revenues soar to $1.4bn within five to seven years, accounting for an estimated 70-80 percent of the company’s total business. No wonder the Dubai-based firm is one of the fastest growing investment companies worldwide.
It has been an interesting journey for the Liverpudlian, who says that while he was an early school-leaver, he did get a business qualification (Business National Vocational Qualification) which helped him set up his own mobile phone shop in Liverpool. The first foray into business, aged 18, “didn’t go well”, he admits. But it did set him up with a lucrative logistics business in the wholesale side of the telecoms sector, supplying UK giants including Carphone Warehouse and 20-20.
In 2006, McGowan opened his first regulated asset management company in London but soon lost almost everything he put into it when the “property market crashed”.
During the two years it took to build the fund and obtain a regulatory licence, he says he had property projects – a mix of commercial and residential – in Abu Dhabi, Latvia and Grenada in the Caribbean.
“Basically, I’d used my own money to secure those projects with the idea being that we would refinance into different investment products, some wrapped as a fund and some as a fixed income type product,” he says. “I had to pull back in late 2008 because it was almost impossible to raise money in the market at that point. I wound the company down and made sure FCA [the UK’s Financial Conduct Authority] were happy and everything was okay with the licence.”
Arriving in Dubai in late 2009, McGowan says he did some consultancy work for local firms, before he established Centaur Asset Management in August 2012, with an initial focus on litigation funding and legal financing.
The concept is to fund claims where the law has already decided the case, such as payments protection insurance (PPI) cases in the UK, where banks have already set aside $40bn to cover mis-sold products.
“A client submits a PPI claim through a claims management company and at the point it’s acknowledged there is a claim, we would fund the processing of that claim,” McGowan says.
Centaur also funds EU passenger claims against airlines for issues with flights. A market worth an estimated $24bn per annum, EU law stipulates that if a flight is delayed by at least 3 hours, cancelled or overbooked, a passenger could be entitled to a compensation payment of between $280 and $680.
“Companies carry out the processing of the claim on behalf of individuals who upload their boarding pass to a website and [the funders] charge a fee of between 20-25 percent,” McGowan says.
The idea at the time was to build a strategy to $100m-plus, which he says is the kind of level needed for a fund to be able to cover the overheads of management fees.