"Trust your instinct" – In conversation with Sir Frank Lowy AC

How do you turn a humble delicatessen into the world’s largest operator of shopping centres — Westfield Corporation? What sort of personality do you need to become a giant in the Australian and global real estate landscape? Sir Frank Lowy AC started his journey in war-torn Europe, with his father tragically dying at the hands of the Nazis. He fled to Australia and spotted an opportunity to sell good coffee in multicultural, immigrant-rich Western Sydney. From there he made his first commercial real estate investment, and the rest is history...

In this interview, Sir Frank candidly shares his story, including mistakes he made along the way, the key character traits he thinks are necessary to become a business success, and the importance of remaining paranoid yet optimistic.

Transcript

Compere

The information contained in this podcast is for general information purposes and does not constitute investment advice. You should seek investment advice tailored to your circumstances before making any investment decision.

This is In The Know, a monthly investment podcast brought to you by Magellan Asset Management, experts in global investing. We bring you timely, unique and thought-provoking insights to help you make sense of today's investment landscape.

Sir Frank Lowy

Practically my whole business career was always, I have an instinct. And then, I followed and did the research about my instinct and that's where I make decisions. And I'm very fortunate.

But I'm very curious and, as you know, I'm paranoid. But, at the same time, I'm an optimist, because you cannot be a real estate developer without being an optimist. The paranoia, I can't quite describe it to you, but the mixture of those does wonders.

Compere

That's Sir Frank Lowy AC, the former chairman of Westfield Corporation and founder of the Lowy Institute, a leading foreign affairs think tank. A titan of industry, he needs little introduction. Welcome to Magellan — In The Know.

In this episode, Sir Frank talks with his long-term friend and Magellan's chairman and chief investment officer, Hamish Douglass, about how he grew Westfield from a humble delicatessen in western Sydney to a global leader in shopping centres.

We'll hear about Sir Frank's turbulent beginnings in war-torn Europe and the tragic loss of his father at the hands of the Nazis. This doyen of the Australian business landscape and former Reserve Bank director shares with Hamish some of the secrets to his many successes, and why it's important to trust your instincts. We start with some words of welcome from Hamish.

Hamish Douglass

Welcome again to Magellan — In The Know. My name is Hamish Douglass. I'm chairman and chief investment officer at Magellan. I'm probably more excited about the upcoming discussion than any podcast interview I have hosted.

I have with me today a friend, a mentor, and, most importantly, one of the best businessmen of the 21st century. I'm delighted to welcome the founder and former executive chairman of Westfield, the world's leading operator of super regional shopping centres, Sir Frank Lowy.

Frank, it is such a great pleasure to have you with me and to be catching up once again. I'm really looking forward to this conversation. Welcome, and thank you for joining me.

Sir Frank Lowy

Thank you, Hamish.

Douglass

Frank, to start, would you be able to provide our listeners with a brief background on your childhood and education, and ultimately your journey to Australia?

Lowy

Well Hamish, the beginning of my life was very turbulent. I was born in Czechoslovakia in 1930. Eight years later, it became Hungary, so I was a Hungarian. And, the antisemitism in the early 40s, even late 30s, was very difficult to cope with. And I was born in a small town on the border of Hungary and Czechoslovakia, which became Hungary later on.

In the town where I was born, there were about 5000 inhabitants. It was a small town and 150 Jews. Business was difficult. The antisemitic laws prohibited Jews from owning businesses.

So my father, in 1942, decided to move to Budapest, where we were able to mingle with the world without being known that we are Jews. And the life was quite good in spite of the war that was already raging. It all came to a sudden stop on 19 March, 1944. The German army occupied Hungary and life turned terribly worse.

I lost my father the next day because they caught him in the street and I haven't heard from him since. So I was left with my mother. I had a sister and a brother, and I went into hiding and I stayed with my mother, and it's a very long story. It was a very difficult time.

But by the end of 1945, the war was over for us because the Russians had occupied Hungary. And we went back to Czechoslovakia, which then became Slovakia. So you can imagine how many nationalities I had to cope with. And the Jews that came back to the small town where I was, there were 150 Jews and the population was 5000. How many came back? It's about 35. So it was a very sad place and it was mainly males. And I had no company there.

I didn't really want to go back to school there. So I decided to immigrate to Palestine. And there was an organisation of the Jewish agency that assisted us. And I got to Palestine at the end of 1946. I joined the Israeli Army in 1947 and fought in the Arab-Israeli war.

And afterwards I got a reasonably good job. I learnt accountancy at night, so I got a job in a bank, and I enjoyed myself very much. But I was very much longing to be with my mother and sister and brother, who survived the war. They, meanwhile, immigrated to Australia. So being in Israel for about six years, I decided to join them and they sent me the air tickets and I arrived to Australia in early 1952.

Douglass

Frank, I don't think many listeners, unless they are over 70 or 80, can have any appreciation of the background. Many of us complain about issues that are going on in the world, but we have lived through very peaceful times.

You grew up in a horrendous period of antisemitism, but also the loss of your father at a young age. And family's so important, at the end of the day. I know your family and I knew your wonderful wife. And your three sons are remarkable individuals.

What are the lessons you learned from your parents that you're trying to pass on to your three sons and your grandchildren?

Lowy

Well, as I told you before, I lost my father early in my life — I was 12 or 13. Then I stayed with my mother. But both of them together and individually taught me to be charitable; to share. Once we discussed it and my mother said, "If you have little, give little; if you have a lot, give a lot." So that became my ethos in life.

And of course, the difficulties during the war also taught me to be vigilant; to be paranoid. What we know about this world, you and I. And it taught me a lesson. If you want to succeed or survive, as in the case of during the war, you need to be curious to see what's going on.

Where are the opportunities for various activities of your life? And I think it did give me some grounding to my life later on.

Douglass

And maybe that's a good segue from family into business. I think in 1955, you and your business partner, John Saunders, started out as partners in a delicatessen in Sydney. How did the partnership in a small delicatessen lead to the establishment of Westfield Building Corporation? That seems quite a leap.

Lowy

Yes, it is. Sometimes I wonder myself. But looking back is a lot easier than looking forward. Looking back, most of the decisions that we took were strategic business decisions.

The delicatessen decision, we could have opened the delicatessen in Bondi Junction or in the city. But, we had two opportunities: one in Bondi Junction and one in Blacktown.

John lived in North Sydney and I lived in Dover Heights. And we chose Blacktown. Not because it was close and convenient, but because the opportunity in Blacktown seemed to be a lot better than in Bondi Junction.

Immigrants were pouring into Sydney, Australia, and most of them went to the western suburbs and Blacktown, and other areas in the west. So we decided to go there and didn't mind the travel of an hour each way. So we left about 7, 7:30 from Sydney, opened the shop at 9 o'clock and then came home 7, 8 at night.

It turned out to be a very successful move. But, as I said, looking back, it was strategic decision to go to Blacktown and why? Well, the shop that we rented was opposite the railway station.

And then one day it was a quiet afternoon. And I walk in the street next to me to look around and I see about three shops are being built next door to our delicatessen shop. And then I said to John: "Hey John, listen — we could do that, you know?" So we decided to try it.

But beforehand, we also opened a coffee shop next to our delicatessen and it was the first or second espresso machine in Sydney. And there were a lot of Italians living in the area. And on Sundays — of course the coffee shop was open on Sunday. So we working seven days a week.

Lowy

David was already born. We used to get up Sunday morning with Shirley, take David to my mother for her to mind, then went together in the espresso shop to serve the customers. The Italians came in droves, I must tell you.

The coffee that we gave them obviously was good, but these two moves set us up for business later on. So we built those few shops next to us. I think it was four shops next to the shops that I was talking to you about before.

And it was very successful. We rented them and we sold them to some people that we knew that have some capital. So that was our first real estate venture.

On top of that, the landlord of ours in Blacktown had four or five acres behind our shops and next to the post office. So we thought, well, why can't we try and buy it and build some more shops? We already heard about shopping centres in the United States.

So we bought some architectural magazines and we learnt a little bit about how to. And we bought that piece of land, we hired an architect and created a small shopping centre of, say, 12 shops, a small department store and parking for 30 cars.

Well, it was an unbelievable success. But meanwhile, we sold the delicatessen and the coffee shop, which gave us the capital to carry on business. So really we opened that shopping centre on 9 August, 1959.

Douglass

It's incredible that you chose Blacktown because of immigration there. And then when you're in a delicatessen, you expand into real estate and you just saw an opportunity. You seized on an opportunity because you could see things happening with your eyes.

It wasn't like you went to Blacktown to build a shopping centre. The plans developed as you could see things in front of you, as they were happening.

Lowy

Practically my whole business career was always, I have an instinct. And then I followed and did the research about my instinct and that's where I make decisions.

Even now after I retired, having friends, business associates, the think tank business that I am in now is all because of how things happened to me and drove me to the activity that I am now doing. And I'm very fortunate.

But I'm very curious and, as you know, I'm paranoid. But, at the same time, I'm an optimist, because you cannot be a real estate developer without being an optimist.

But the paranoia must follow you. And I think I can attribute my success to those feelings. And then the people I choose to be with. When we sold out of Westfield, there were people who used to work for me, started as young people, and 30 years later they were still there.

Of course, I was very lucky to have three sons like David, Peter, and Steven, who are smart, hard workers. And also I think there is an optimism in the four of us and also the paranoia. I can't quite describe it to you, but the mixture of those does wonders.

Douglass

It's extraordinary Frank, because I remember so clearly — it may have been 15 years ago — when I came to see you to get some advice. I think I was setting Magellan up at the time or something was going on after that. And I said, "What's the one piece of advice you would give me?"

And you said, "Be paranoid. Always look after the downside." But you've also given some other advice. And you are a tough businessman in terms of that. But you once said to me, "Always play the ball and not the man."

How have you been such a tough negotiator? And I would say often uncompromising. But how do you avoid playing the man when you're playing tough to get outcomes in business?

Lowy

Well, I think what I used to do is decide by myself where I want to be in those negotiations. And I just didn't give in. I kept my point. Occasionally in business, you have to be giving in to give the other guys some victory also.

But I decided where I want to be at the end of the negotiation. And once I got there, there was nowhere to go. I had nowhere to go. The opponent must have realised it. Because you need the buyer and the seller all the time.

So somebody has to be definite. I was definite because I believe that's the way to go. I don't like negotiations that drag on for a long time. I lose patience. I know where I want to be. So why play around? Just set your position and stick to it.

Douglass

I think there's a very good lesson in that Frank, where people just keep moving the ball the whole time. It gets impossible to do business with people who are completely inconsistent with how they deal with people.

Lowy

And if then the opponent doesn't know where to go, he either has to leave the position or agree with me.

Douglass

Another lesson that we've talked about is your belief in business to always keep moving. And one of my heroes in business, who I don't actually know personally, is Jeff Bezos, who says he believes that stasis actually kills most great companies.

And when you look at the history of Westfield, you never stopped moving the chess pieces. In the 1980s, you split the company, Westfield Building Corporation, into two companies: the holding company, Westfield Holdings, and then you put a real estate trust into place.

In 2004, just before the onset of the global financial crisis, you merged the three Westfield entities into one entity.

In 2013, you changed directions again and you split Westfield into two distinct companies. And there was actually a lot of shareholder opposition at the time — that was the Australian and international company.

And then in 2018, you then sold Westfield, the international business, to Unibail-Rodamco. And the timing was just impeccable.

On this question of moving and having that sense to move, how important do you think it is for business people or companies to not go stale, to avoid what Jeff Bezos says is stasis in life? And how important do you think it is for businesses to keep moving and adapting?

Lowy

I'm going to give you an example. I just thought about it. I haven't thought about it before. But you know, if you stand still, to get going is quite difficult sometimes.

It takes a few steps before you can move. But if you keep moving all the time your feet, and you need to jump or walk or run, it's much easier to do. This thing came to my mind to this question. Standing still is not my nature anyway.

But opportunities come to you if you look for them. We were very successful with floating Westfield and the company was very successful. But in the late '70s, because of our success, we had become over-leveraged.

So I was thinking about it, talked to my colleagues, and we decided to create a trust. I'd seen an example of Lend-Lease that they did it before us, a few years, but we did it differently.

They sold their properties into GPT, it was called, and then they separated from them. We sold our properties to a trust that we were managing.

And in the process, the shares were two dollars when the scheme was revealed and they jumped, I think it was either $8 or $10 for the same properties, for the same company. Shareholders realised four or five times what they had because we released value.

And you know what the team was? It was a lawyer, an accountant, company secretary and me. The deal was about $80 or $100 million dollars worth.

Can you imagine today? Well, you don't need to imagine, you know what it takes to do a restructure now. Most people that listen to you, they know how many lawyers and accountants appear on the scene.

And they don't do much more. I'm very proud of that. And I used that as an example for later in our activities. Recognised and realised the value that we have in the company, but it had to be released.

We were over-borrowed quite a bit, but I didn't want to sell the properties because they were too good. So we copied a bit Lend-Lease, made our own way and sold the centres to the Westfield Trust.

And, in addition, sold a couple of centres and leased them back. So we had plenty of money, a lot of cash, unleveraged practically, and it enabled us to jump-start so many things after that.

Going to the United States was one of them. And you know what it meant to Westfield, going to the United States. Went to New Zealand also. And a very big step in the standing of the company was when we decided to go to London.

These two centres in London gave us exposure. The success that we had. People used to tell us, "Oh, the English only go shopping to the corner shop." Well, we proved them wrong.

It was very difficult; it took a long time to find the right location and then get it rezoned. And then, of course, we were lucky. This is where luck comes in. You do one thing and you get another.

The Olympics were awarded to London and we own a bit of land around there. And we were able to work together with the English Olympic authority to build a shopping centre in the Olympic village, very close to the Olympic village.

So these two centres in London where an unbelievable success and proved the people wrong who said that the English only shop around the corner.

Douglass

Frank, on that, do you believe in luck in business or do you believe you make your own luck, or do you believe you take advantage of opportunities when they appear? They may appear lucky, but you have to know when to seize them.

Lowy

Well, I think you said it. You take advantage of opportunities, but you have to see the opportunity.

I mean, the two centres that we built in London have changed the company's profile. It became a worldwide company, and in effect, it enabled the sale, because Unibail really wanted to be in Europe more than they were, and also, they wanted to go to the United States.

We gave them a ready exposure. The shareholders of Unibail wouldn't think so today, because values have changed so dramatically, but the vision of the Unibail people was okay, but the timing was wrong.

So the timing is wrong, it's luck or unluck, or you have a feeling that it's the right thing to do. As I told you before, I follow my instinct most of the time, and I really wanted Westfield to be in the centre of Europe, which was London.

And I tried over 20-odd years to establish ourselves there, but I didn't give up. The other thing is you have to be determined. You have to work hard. You have to be determined. You have to have people with you that follow you or share that vision with you. You can't go wrong.

Douglass

And Frank, I remember when you were doing an acquisition and I was in the room, and somebody asked a question about what rate of return do you think you're going to get on this asset?

And I think it comes back to the London example, and you don't often get irritated, but you were very irritated by the person asking you the question about what the spreadsheet looked like.

And you said, "I don't need to see a rate of return. I know we'll make the assets work over time, and stop asking me the question."

Do you think the accounting types can't see the big picture sometimes, and can't see a vision of what can happen over time if you get the right asset? Seeing your irritation at the time of somebody just asking which decimal point to put in on the spreadsheet was illuminating to me.

Lowy

Well, he must have been the accounting type, but decisions are not made on a spreadsheet. The spreadsheet is to prove to you that what you want to do is either right or wrong, and that's why that spreadsheet is necessary.

But as I said to you before, my spreadsheet really was my instinct, and I fought very hard. I worked very hard to achieve it.

But when you say me or you say Frank, it was a team of people. First of all, it was my three sons. The four of us became a very strong business machine. We relied on each other.

Of course, we had serious discussions and sometimes the discussion was quite robust, but when the meeting was over, the meeting was over. A decision was made and we were back to normal.

You've got to be strong, but not stubborn. And I am very fortunate in that luck came in and God came in, that I have three sons, that I am very proud of them, that they followed with me and they became the basis of the executive force of Westfield.

Of course, we had 30, 40, even more executives all over the world, and I'm still friendly with them. Whenever I come to Sydney, which I was a couple of times, we got together, we talked, we had lunch.

And the feeling of togetherness with my executives was unbelievable. I believed in them, and they believed in me and followed my leadership.

Douglass

And Frank, just moving on there about the team and particularly decision-making, it would appear that it isn't just once or twice or three times. It is time and time again, when there are major moves to make, you seem to have had a sixth sense in timing.

You amalgamated your trust in 2004, and who knew that in 2007, the world would have changed, and had you not put those trusts together, that could have been a very different event in the end. When you sold to Unibail-Rodamco, who would have known what would have happened to the world after that?

But you didn't suddenly just wake up one morning. The events and your team and your sons. Talk about the game of business and what can happen over a long period of time. So how important is pre-planning and thinking, and then how do you make the decision that now's the time to act?

Lowy

Leverage. The size of leverage that you are prepared to take is very important. In 1979, we were over-leveraged, and we formed the trust. In 2004, we amalgamated it, because Westfield itself was over-leveraged and the Westfield trust wasn't leveraged, because it was only equity.

So to merge the two things was necessary. Not because things are going to be bad, but that's the way that we were able to keep the properties and avoid to be over-leveraged.

I know what over-leveraging is. In the beginning, we had to be in order to move forward. But then later on, you needed to be secure, not over-leveraged, and not to be at risk where you don't need to be at risk.

So we decided to do that. There was some opposition from shareholders, but in the end we made the day and it was a very good move.

It was a very important move that we did that, and it paid dividends, because we became much more secure than we were before, and we still kept earnings at the same rate, and we were not over-leveraged.

Douglass

Frank, I'm going to move on from Westfield a little bit. And I haven't asked you this question before, so I'm incredibly interested in the answer. You have had a great privilege of meeting so many people around the world in your life. Who is a person who has impressed you the most and why?

Lowy

You'll be embarrassed in my answer. One of the men was you, because I felt when I talked to you like I was talking to myself, and of course it's enjoyable to meet a smart person, and every time we were together, we learned from each other.

Life is about learning, not standing still. And I learned a lot from you, and I'm very pleased to hear from you from time to time how much you enjoy the interaction between you and I.

There are a lot of other people that influenced me. I enjoyed working with my sons. Unbelievable luck. You talk about luck. You are lucky, or you are... How does it come about? It's luck.

I have three sons that are a business force with me. We get on well. It's not a honeymoon that we agree all the time with each other.

We respect each other, so when we debate, then at the end, there is a consensus. And when there is a consensus, there is no better way to make decisions.

Douglass

So I guess what you are really saying is curiosity in people you interact with, and I guess your friends in life, are the people who challenge you and make you think about other things.

And I know your sons. They are remarkable. Each of David, Peter, and Steven, and I know each of them well, and I must admit I enjoy the interaction.

And they challenge me as well on many topics, and being challenged is very important in life. You just don't want people who say yes to you all the time.

Lowy

But you know, Hamish, there was one business activity that I did and I didn't do my homework, and it was driven by ego, when I went into the television business. And it was ego-driven and it turned out to be a disaster in business.

But when I cleared up the mess, I had some very good advice. I had a person that worked in the company and he was doing my PR.

And I sat down with him after we sold it. It was three o'clock in the morning when the negotiation finished, and when I walked to the car, I thought I was walking on air.

The next morning, I met him and I said, "What do we do now?" He says, "Frank, it was a big mistake that you have done. I can introduce you to a senior journalist, but you have to come clean."

And I said, "What do you mean, I have to come clean?"

"Tell the world that you have made a mistake."

So I accepted his advice and I told him I made a mistake, and the banks were paid out. Only the shareholders lost money.

So you also have to be humble to accept a failure and accept a responsibility, and many people don't do that.

They try to hide it. They try to come up with some stories which normally we'd call bull-dust, but I didn't want to do that.

I wanted to be credible and I wanted to admit that I have made a mistake, and it was accepted, and actually, I haven't heard any criticism from afterward.

So what is the lesson from that? When you make a mistake, admit it. None of us are perfect. We are only human and mistakes are made. As long as they're not major, because had I not sold it — sold it? I gave it away — the consequences would have been much worse.

So when I signed an agreement at three o'clock in the morning, I walked home like I was walking on eggshells, like in the air. I was so relieved and so pleased, and yet it cost me a lot of money. But money is a commodity. You make it and you lose sometimes, and that's part of life.

Douglass

Frank, if anyone hasn't taken lessons out of this, I think people will never learn anything. Admitting your mistakes and being how humble about that, there couldn't be any greater lessons in life, and it's just not in business.

And you've often said to me that one of your beliefs in life is that you don't look back. Do you actually have any regrets?

You've just admitted about the television debacle in your life, but you're not looking back with that. Is there anything that you would change if you had the chance again?

Lowy

Look, we all know that I was very successful and am very successful. If I would get the time again, I would like to do it a bit easier, because as good as it was, and as good as it is, it was very, very hard to be chairman of Westfield, managing director, chairman from 1965 till 2018, 2017.

It was not easy to do. It required a full commitment all the time, whether it was day or night. Saturday, Sunday was not a problem for me. And I can't understand. Sometimes people tell me, "Well, I can't see you on Saturday." I say, "Why not?" "Well, it's Saturday, you know." "What's wrong with Saturday? What's the difference between Saturday or Monday?" In a way I did all that.

But if I would do it again, I would like to observe Saturday and Sunday. But people tell me, "Had you observed Saturday and Sunday, you probably wouldn't have gotten where you were." So you can be lucky. You can be smart, but you can't be clever enough.

Douglass

But do you think it's important that people look forward and not backwards in what they do? We all make mistakes, but you need to keep looking forward.

Lowy

Absolutely. Look, the world has forgotten my debacle on television but I haven't. I remember it. And I'm still cranky with myself that I did what I did because of ego. There is no room for ego in life, at least not in business, but in life also.

You have to recognise the other side of the world, the other person, the other people, the other country, the other language, all this, you've got to mould into them rather than get over them.

So many of the things that I'm telling you now, I haven't thought about because I didn't prepare myself for this debate because I know you and I wanted it to be a discussion between you and me, and hopefully other people who listen to it will learn from it.

And maybe won't like it or will like it, I don't know, that's up to them, but you and I always have an interesting discussion, whether it's on air or whether it's in person.

Douglass

We have fascinating conversations, Frank, and I'm always amazed, you've just turned 91. How do you retain so much energy and such a positive outlook?

At age 91, you're still moving with a lot of energy. You still move around the world. COVID's probably slowed you down a little bit, but how do you retain a positive outlook and also energy in life?

Lowy

Well, I think I am very interested in what I do, but basically I probably inherited it from my mother and father. But I'm very curious.

I don't want to stop because I'm 91. I'll stop when I have to. At the moment and for the last four or five years that I'm not in business, not in charge, not responsible for shareholders, just on my own and my three sons, I enjoy what I do.

I enjoy talking to you now. I enjoy my activities within the Lowy Institute and think tank that I chair here in Israel for the Middle East. It's very interesting.

Life is very interesting if you are interested, and I don't spare myself. Energy — luckily I have it. But if you say luck, how important is luck — it's very important.

I mean, what I inherited and the energy I have is a combination of luck, interest, curiosity. I didn't use these words before. I didn't think about it that way, but you bring, I hope, the best out of me.

Douglass

Well, Frank, I think you're telling everyone a very important lesson in life and that's stay engaged and stay curious.

And you often see people who retire from business after fabulous careers and two years later, they drop dead. They stop doing anything.

They go and start, I don't know, reading a book or looking at a building or something. And they lose all interest in life. And I guess your lesson is: don't lose interest.

Lowy

No, but I mean, I get up in the morning around 6:00, 6:30 — I go to the gym. I spend there a couple of hours before I start life. It's a lesson that you get energy in the gym. I do some swimming and come up for breakfast.

Douglass

And Frank, I'm all of 53, where you look back and you kind of laugh when you see me at 53, and you say, "How young you are." My kids say how old I am, but you say how young I am.

What's the piece of advice you would give me? You can't give all our listeners a piece of advice, you don't know them, but what's the advice you would give me at age 53 at the moment when you think about where you were at 53?

Lowy

Simply, carry on. Carry on what you do. You're doing it very well. But as I explained to you, the TV was a disaster for me, but I compare it to rough seas. You have to swim in the sea. You have to come up for fresh air and stay with fresh air.

And that kept me well to be determined, not to lose head and purpose. And there were some tough times, which I think we are spending overtime now.

Particularly in the early days, the risks were, of course you had to borrow, you had to over borrow. And you had to be sure that you sold in time so that you were able to pay the bank back.

And those were very tough times. And sometimes of course, in the '60s and '70s, the credit squeezes just came onto you like a storm from nowhere and you had to survive.

You had to survive. And if you had to sell cheaper, you sold cheaper. As long as the cash was coming in to pay your debt.

When you borrow money, you've got to pay it back. And that was my motto. And fortunately, timing played for me because the credit squeezes didn't last forever. They lasted for a year or two, and then things came back to normal.

So you have to be strong. And the people that you work with, or the banks that you borrow from, need to have faith in you, that you will get over your difficulty and will be able to repay your debt.

Douglass

And Frank, one very last question to end here. Every time we get together, I must admit I come back more optimistic and more energised than I was before we get together.

What are you most optimistic about? A lot of people are very pessimistic about the world at the moment. What are you most optimistic about?

Lowy

Wow.

Douglass

Tough question at age 91.

Lowy

What am I optimistic about? I think that life rolls. It doesn't stop; life rolls.

Once I had a failure, another one, the World Cup, to bring the World Cup to Australia. I was miserable, of course, I was cheated out of the position, but I came back from Zurich and I had to face the music.

The journalists were waiting for me and I accepted again the responsibility. And I said, "You know what fellows, the sun will rise tomorrow." And I finished my interview that way, the sun rose tomorrow.

So what am I optimistic about? The same thing. It's a bit of a cliche, but of course the sun will rise tomorrow. And if you can adopt that attitude and I mean, I'm trying to adopt that attitude. I don't always succeed, but most of the time I say to myself, the sun will rise tomorrow.

Douglass

Well, Frank, I couldn't think of a better note to end on. When we last saw each other, which was less than a few months ago, I think we made two commitments to each other.

One, I promised I'm going to come and see you in Tel Aviv when I'm next going to Europe, which hopefully will be early next year. So hopefully our paths can cross. And you also undertook that when things open up a bit, you may ultimately come back and spend a little bit of time in Australia.

So we hope to see you back at home in Australia. I know Tel Aviv and also New York is also home, but Australia is a very important part of your life.

You've got a lot of friends here, but you're also an incredible businessman, but most importantly, a friend and a mentor, and somebody who I admire and I'm very lucky to call a friend of mine. So thank you very much, Frank.

Lowy

Okay. Thank you very much, Hamish. And I hope to see you soon.

Douglass

Likewise.

Compere

That was Hamish Douglass, chairman and chief investment officer of Magellan talking to Sir Frank Lowy AC, an Australian business legend and former chairman of Westfield Corporation.

We trust you've enjoyed this episode of Magellan — In The Know. Join us in a month's time for the next episode.

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