Life / Careers from the Financial Times, 12 July 1999 (information submitted by John Frere Scott)

FRÈRE: The reclusive capitalist. The Belgian billionaire, Albert Frère, considers himself a pioneer of Europe's cross-border deals, write David Owen and Neil Buckley. It is perhaps appropriate that Baron Albert Frère should decorate his office with two originals by another of the most prominent but enigmatic Belgians of the 20th century - René Magritte. Like Magritte, Albert Frère came from Charleroi, a town of steelworks and slagheaps in Belgium's industrial south. Just as observers pore over Magritte's works, searching for the meanings within, so analysts and rivals puzzle over Mr Frère's motives and plans each time he unveils another billion-dollar deal.

And, like Magritte, Albert Frère feels little need to explain himself. "I am media-shy," he says in a rare interview. "I don't like everyone talking about me. And, though I avoid journalists, I still find people talk about me far too much."

They are talking again. Just months after Mr Frère merged PetroFina, the Belgian oil company he controlled, with France's Total, the new group TotalFina - of which he is the biggest shareholder - is bidding $43bn (£27bn) for Elf Aquitaine.

If the bid succeeds, the man who began using his family nail-making business 50 years ago to trade steel from Charleroi's factories will end up with 5 per cent of the world's fourth-biggest oil group.

Mr Frère is already the biggest shareholder in another large French corporation, the utilities group Suez Lyonnaise des Eaux, and his sprawling empire owns half of CLT-Ufa, Europe's biggest commercial broadcaster.

He has owned half the Belgian steel industry and a stake in Drexel Burnham Lambert, the ill-fated Wall Street investment bank. He has held, and sold, large chunks of half a dozen Belgian flagships - PetroFina, Banque Bruxelles Lambert, the number three bank, Royale Belge, the number two insurer, Tractebel, the energy group. And he is the only Belgian in Forbes magazine's list of billionaires - estimated wealth: $1.6bn.

Inside his glass and white-walled corporate headquarters in fields outside Charleroi, the man behind the image of the reclusive billionaire is charming, witty and a raconteur - though with flashes of temper.

He seems most at ease talking about himself, his passion for wine, art and tennis, batting away any nitty-gritty questions about business to an entourage of managers.

But beyond rising before dawn and impeccable time management, he gives little insight into the real secrets of his success. Two facts are, however, evident.

First, Mr Frère is gifted at buying and selling, and turning a profit - as he has ever since realising the Korean War would create demand for steel. He is also exceptionally good at finding loyal, like-minded partners and backers. He ploughed the proceeds of his 1950s steel trading into a string of steelmakers - backed by French bank Paribas, still a partner. When the Belgian state nationalised them, Mr Frère used his handsome profit, in 1982, to take control of Groupe Bruxelles Lambert, the holding company second only to the mighty Société Générale de Belgique. With that came the corporate stakes he has traded in recent years for his Suez and Total interests.

In his assault on Groupe Bruxelles Lambert, his partner was Paul Desmarais, the francophone Canadian head of Power Corporation, whom Mr Frère had befriended on the board of Paribas. Mr Desmarais remains his bosom ally and jointly controls much of his empire.

Apart from their similar age, background and interests, associates suggest French-speakers, but not French, never fully accepted by the Paris establishment.

Even at home, though awarded the title Baron by King Albert in 1994, Mr Frère is not universally loved. As he has sold his Belgian corporate stakes, critics and the media have asked whether he has "sold Belgium". "I find that question inappropriate, though I admit many people ask it," says Mr Frère. "I'm a Belgian first of all, but I'm also a European. If we want to build Europe, these kinds of national barriers have to come down."

The new world of business "mammoths and mastodons" left even companies the size of PetroFina exposed, hence the merger with Total.

"What is better, to have a company in danger [of being left behind] or one that is developing in the framework of an international, global company - third-biggest in Europe, fifth-biggest in the world?" he asks.

Every time he has sold a company, Mr Frère adds, he has found a buyer which guaranteed jobs, investment and a decision-making centre in Belgium.

TotalFina's bid for Elf, which Thierry Desmarest, Total's chairman, is understood to have first discussed with Mr Frère some months ago, follows the same logic. Jobs will be safeguarded in Belgium and the new group will be one of three dominating the European oil market.

Mr Frère sees himself as a pioneer of the cross-border deals sweeping Europe, with his sale of Banque Bruxelles Lambert to ING of the Netherlands for $5.5bn in 1997. "We were the precursors," he says. "Sometimes you're not wrong, you're just right too early."

But Mr Frère concedes his biggest regret is not managing to marry BBL with its bigger rival Générale de Banque, to create a "grande banque Belge", a Belgian mega-bank capable of competing globally. Générale's directors, he says, wanted to go it alone.

Some critics level deeper charges at Mr Frère. They see him as the embodiment of a distinctly Belgian system of capitalism which, they say, hindered corporate growth and prevented Belgium from developing its own worldbeaters in the manner of other small countries, such as the Netherlands or Switzerland.

It is a system where businesses have traditionally been controlled not by institutional and small investors through the stock market, but by diversified holding companies. Such parents, say critics, could not always provide the funds their offspring needed to expand - or were too ready to sell them for profit.

The backbone of Mr Frère's empire is indeed a "cascade" of holding companies, each owning about 50 per cent of the next one down - the rest often held by partners. With the biggest corporate stakes owned by companies well down the cascade, Mr Frère exerts de facto control although the real stake of his family business, at the top of the cascade, is many times diluted.

Might Belgium's corporate gems have fared better floating on the market, rather than tied into this structure?

"Je m'insurge," answers Mr Frère, scurrying for a dictionary to make sure he is translated correctly. "I rebel against that question. We have always put at the disposal of our companies all the funds they needed, when they needed them. It is a minority who claim otherwise."

Groups like his, he adds, sprang up in response to successive Belgian governments' failure to create the thriving stock market capitalism of some neighbouring countries.

But Mr Frère's group is undergoing important changes. While swapping his big stakes in Belgian companies for smaller stakes in bigger French ones, he has also removed layers from his "cascade", merging adjacent holding companies.

Is this a 73-year-old tidying up his investments, ready to hand them on to his children and retire? "That's a question that makes me angry. You can see me - I'm in good shape. What would I do if I didn't work?" he asks. "If God grants me a few more years, I'll be around for a while yet. And if you ask my son, when will your father retire, he'll say, 'I think that will be long after me'."

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.....Family business: born 1926 in Fontaine-I'Eveque, near Charleroi, into a family with a small nail-making business, Frère-Bourgeois - still at the top of his business empire. Father died when Albert was four. Elder son Gerald, 48, by his first wife, runs one of his companies. His daughter, Segole'ne, 22, by second wife Christine Henning, is also a director. Younger son Charles-Albert died in April in a car crash, aged 19. Early riser: at 73, he still gets up at 5.30am, Sundays included. The once-habitual game of tennis has been replaced by an exercise routine, but he is ready for work by 8am, having briefed himself by listening to the BBC World Service and his own RTL radio. "I'm good at arranging my life," he says. "And I'm very fulfilled. I do what I want. I amuse myself by working and for the rest - I find time, because I'm very well organised." Wine lover: perhaps his biggest love is wine -about which he has found time to write a book. With his friend Bernard Arnault, head of France's LVMH, Mr Frère last autumn bought Chateau Cheval Blanc, a top Bordeaux vineyard, for Dollars 145m. Modest habits: there is the villa in St Tropez, the apartment off the Avenue Foch in Paris, the Magrittes, but friends say he has never really adopted the lifestyle and spending habits of the super-rich. "I'm not one of the richest men in Europe -that's not true - so I can't spend without limit. I manage my fortune and investments according to my means," he says. "I have a quiet lifestyle. I'm not very worldly. I avoid society receptions, though I'm sometimes obliged to go." .......

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