No retreat for Viking King

Brent King is worried about the finance industry and is predicting tough times ahead.

The flight from Auckland to Europe seemed interminable. It was the late 1980s and, winging his way over Singapore and the Maldives towards Zurich, financier Brent King could not sleep.

He was fretting about his future, worrying about the direction his life was taking and worrying even more about his home country.

"Everyone back home seemed like they were stoned - the deals they were doing seemed crazy ... the floats," King recalled of Auckland's business community at the time.

"It was chaos, like a student party and everyone was super-hyped and doing transactions without any commercial logic."

Those times are a little like today in King's opinion. He is again worried about the finance industry and is predicting tough times ahead.

After 17 years with Dorchester Group, King is starting a new company, Viking Capital, and hoping to prosper from the difficulties. Viking is aiming to raise $15 million and list on the NZX's alternative market in an offer closing next Friday.

Its prospectus promises that it will be an investment company taking advantage of the changing economy, particularly restructuring and rationalisation, "creating wealth by buying prudently and using management and financial skills to create value".

King will invest $5 million, giving him a third, director Grant Baker will invest $1.65 million and former finance minister Sir Bill Birch will become a director and also invest money.

Last March, King bought the 54-villa eight-unit Kuranda Resort & Spa in the tropical rainforest north of Cairns and says he has enjoyed "making it work". The resort, not far from Port Douglas, is near key attractions including the award-winning Tjapukai Aboriginal Cultural Park and the impressive Skyrail Rainforest Cableway.

Back in the late 1980s, King was working on NZI Finance's purchase of Switzerland's Focobank and found the European bankers the antithesis of sharemarket-mad Kiwis. The sober Swiss impressed King with their rational approach to business and their utter seriousness.

"I stayed awake that entire flight," King said. "I was so worried about what would happen to the New Zealand economy, so I decided to become the master of my own destiny."

The son of a Christchurch accountant returned from Europe to resign from NZI Finance where he had worked with the special projects and takeovers team, initially in Christchurch and then Auckland.

In 1988, Dorchester & Smythe was formed, financed by $500,000 contributed by King and three investors: Fred Chinn, a Chinese market gardener who migrated here in 1940, Auckland businessman Chris Alpe, of The Helicopter Line, and Lockwood Homes executive chairman Joe La Grouw of Rotorua.

Dorchester & Smythe's sober sounding name was entirely mythical.

"At the time, it seemed like an appropriate brand, although I'm often asked about that."

He opened for business specialising in picking up some of the corporate chaos left over from the sharemarket crash, helping failing businesses and restructuring those that were viable. King was confident the new business would succeed.

"I started it with no staff and no money and built the business up to today where it has 250 staff and $460 million in assets."

And when he stepped down as head of Dorchester last year, King reflected on that firm's success and the imponderables of his own future.

"Coming from a small office with no staff overlooking Mt Eden Prison to having a business now of just on half a billion dollars and offices from Invercargill to Auckland, I'm sure it will hit me," he said.

Each year over a decade, Dorchester had achieved a 25 per cent annual return for its shareholders, King said.

Establishing a financier in the late 1980s when most companies were labouring under debt burdens seemed like lunacy to some but King believed he could make money out of the disaster.

Part of the specialist financier's key to growth was also establishing an immigration consultancy, helping foreign nationals get residency here.

"It was a way to create income and give us capital," King recalled of the business which promoted itself as being able to "suggest ethical ways to maximise chances of success and minimise the application process".

Dorchester & Smythe helped migrants, then provided investment advice to the many wealthy Singaporean, Malaysian and Korean businesspeople.

"We helped them get permanent residency and put money into various ventures, marrying them up to local people - some deals worked and some didn't."

By 1992, Dorchester had listed on the sharemarket and grew fast, setting up offices around the country, spreading into motor-vehicle financing, property development deals, equipment financing and personal loans.

In the five years up to 2003, it had nearly doubled earnings per share, increased net assets per share by about 75 per cent and achieved what analyst Kathy Jones, of Investor Insight, said at the time was "a remarkably consistent return on shareholders' equity of 18 to 20 per cent". The firm sported insurance and consulting divisions and advised on initial public offerings.

That sent King down a new path, helping with IPOs that included 42 Below, Charlie's Group and Finzsoft.

King's exit from Dorchester will be remembered for the controversy it created and criticism from the Takeovers Panel for his share sale to rival financier Bridgecorp.

Bridgecorp bought a 19.5 per cent stake in 2004 but was forced to sell 5 per cent when the panel decided there was a problem with a "lock-up" agreement made between King and other shareholders.

King insisted that the parties had acted appropriately and still smarts when reminded of the kerfuffle.

Fastforward to today and King has a sense of deja vu.

He is predicting a major finance industry shakeout and says receiverships of National Finance and Provincial Finance are just the start.

So what of King's new company and its name? He says Viking has a confident and triumphant ring and encapsulates his aims.

"The Vikings burnt their boats, after pulling them on to the beaches of countries they were invading. There was no going back. There was no view that they would fail and say 'oh, it's a bit cold here, what about we all go home?' They had to succeed. I like that."

Brent Douglas King

Position: Chairman, Viking Capital.
Founder, former managing director and former principal, Dorchester Group.
Director of 42 Below, Charlie's Group and Finzsoft.
Age: 50.
Family: Divorced, with four children aged 11 to 18.
Education: Burnside High School, Canterbury University.
Lives: Orakei, Auckland.
Interests: Cricket.
Other: Chairman, Auckland Cricket Association.

Kuranda Resort