Niall Carroll is not a household name in the world of business. And yet, he has played a major role in the success stories of some of the largest institutions in South Africa, before moving to the United Kingdom where he built a portfolio of companies within the CG Tech Group that are uniquely positioned to disrupt the new normal.
We recently sat down with the South African businessman to reflect on a career spanning nearly four decades in a diverse number of fields – from investment banking to platinum mining and virtual reality. Niall Carroll has been hailed for his investment acumen and incredible work ethic.
He is keenly intelligent, eloquently spoken, and widely-read across a diverse range of subjects. The interview reveals insights on investment strategy, entrepreneurship, and future technologies.
Niall Carroll earned degrees in accounting and economics from the University of Cape Town. After serving articles with Deloitte, he started work as a junior equity analyst at the leading stockbroker Ivor Jones Roy & Co where he focused on researching industrial and mining companies. At Ivor Jones, he rose to the rank of partner in just three years, and following the deregulation of the Johannesburg Stock Exchange, was involved in the sale of the business to Deutsche Bank.
While at Deutsche Bank, Niall Carroll was asked by the Kgosi, or king, of the Royal Bafokeng Nation Leruo Tshekedi Molotlegi, to become the founder CEO of the community’s investment company, Royal Bafokeng Holdings. At Royal Bafokeng Holdings, Niall and his colleagues orchestrated a groundbreaking platinum rights deal between the Royal Bafokeng Nation and Impala Platinum, played a key role in executing sports projects during the South Africa FIFA 2010 World Cup, and and secured a major stake in leading financial services group RMB Holdings that diversified the Royal Bafokeng Nation’s portfolio away from platinum. Under his leadership, the portfolio grew to over USD $4B, with a higher rate of return than Warren Buffet’s Berkshire Hathaway.
In 2012, Niall moved to the United Kingdom and subsequently formed the CG Tech Group with partners Jason English, Andrew Jackson, Dany De Barros, Joseph Zinyana and David Cummins. CG Tech has grown to become an investment holding company that provides strategic management oversight and deploys disruptive technologies within its underlying investments in the industrial services and event sectors, with successful ventures in Europe, the Middle East, and South Africa. As chairman of CG Tech, Niall Carroll and his partners have managed to exponentially scale their services businesses in the oil and gas sector and create incubators for digital innovation.
As the interview with Niall was conducted over Zoom, it seemed most timely to start with the topic front of mind for everyone: the new way of working in the pandemic.
Niall, the pandemic has imposed unprecedented limitations on travel, physical interactions, and changes in customer behaviour. How has it affected you, your team, and the customers you serve with CG Tech?
Fundamentally, the pandemic has forced every one of the CG Tech Group companies to change the way we operate and engage with customers. Personally, I’ve enjoyed becoming more engaged, virtually meeting most days with my partners who run our various businesses to plan the way forward, monitor financial positions, and execute our short-term and long-term strategies. From a customer point of view, we have seen an increasing appetite for our technology solutions with traditional industries not just willing, but desperate to adopt new solutions that will keep them sustainable and profitable into the future.
When you talk about technology solutions, I suppose you are talking about CG Tech’s virtual reality startup The Virtulab. What is The Virtulab and how did it get started?
The answer to the first part of your question is simple. The Virtulab is a technology solutions and software company that leverages the latest digital innovations in virtual reality, augmented reality, holographic technology, machine learning, and drone technology to create value for analogue industries in South Africa, the United Kingdom, the UAE and around the world. The products and platforms that emerge from The Virtulab enable customers to engage with their physical world virtually and digitally, enabling virtual and remote work. The Virtulab is led by David Cummins and supported by fellow CG Tech partner and South African entrepreneur, Jason English.
The question of when it got started is a bit more complicated. While The Virtulab officially launched at the height of the COVID-19 pandemic, it started out as an in-house drone services and technology incubator for CG Tech called CG Labs. The CG Labs team operated out of the United Kingdom and South Africa, and was tasked with increasing performance and creating synergies across the CG Tech businesses and in client projects. The successes included repurposing advanced drone technology to survey oil and gas infrastructure more efficiently, as well as creating virtual reality online training programs that enabled engineers to plan remotely well before executing their work in the field.
The COVID-19 pandemic created an immediate and accelerated need in the market for the technologies we had developed. The CG Tech board decided to move quickly and spin out CG Labs into The Virtulab. In a few short months, The Virtulab has delivered digital solutions that have allowed companies outside the CG Tech group to maintain operations and discover new profit centres during COVID. One of the most popular digital solutions is Virtuworx, an avatar-based hybrid of virtual reality and mixed reality environments that are fully customisable for virtual training, virtual offices, virtual events, virtual education, virtual trade shows and virtual conferences. Virtuworx allows companies to be more productive and more engaged in remote working and working from home contexts. Another product is Virtuscan, a visualisation portal that allows you to visualise data and physical assets in a new and value adding way through a combination of drone based and ground based IoT sensor inputs.
CG Tech has an interesting backstory, as after a successful career in investment banking and as CEO of Royal Bafokeng Holdings, you had a lot of choices in terms of what to do next. Why CG Tech?
When I first moved to the United Kingdom, I wasn’t certain what my next move would be. I considered projects similar in scope but larger in scale than the work I had done at Royal Bafokeng Holdings. However, none of them felt quite right.
What made CG Tech an interesting proposition is that it allowed me to apply my expertise and experience at scale and on my own terms. At CG Tech I am able to work with incredible people who I like and trust. My role as Chairman of CG Tech is to support my partners who are running the underlying businesses in the United Kingdom, South Africa, and the UAE. The work we do together is built on a strong sense of purpose, a shared set of values, and teamwork at every level.
Over the last five years, CG Tech has invested in a diverse portfolio of companies in South Africa, the United Kingdom, and the United Arab Emirates. What makes CG Tech different?
First, unlike many other investment holding companies, the CG Tech leadership is less concerned about the industry in which we invest or the size of the ownership stake we can acquire, but is much more interested in the nature of the people who lead the companies. We particularly like partnering with owner-managers, who are investing their own time and money in building their business. And each of these owner-managers actively participates in discussions and decisions regarding the entire group, not just their own company.
Second, we are always on the lookout for aligning the capabilities of a company with a new potential value context. Internally, this manifests as exploring – but not forcing – synergies between the different companies within CG Tech to increase competitiveness and profitability. Externally, this manifests as moving quickly and deliberately to pivot and position our services and solutions to meet the needs of the market – as was the case with The Virtulab.
Finally, we firmly believe in having a sense of purpose and sound values. We have worked hard over the last year to articulate for CG Tech Group a strong sense of purpose and a common set of values that will guide decision making during times of disruption. The purpose of CG Tech is to serve people, solve problems, and uplift the ecosystem within which we operate. The ecosystem includes the people who work for us, the communities we impact, the supply chains that we rely on, and the clients whom we serve. The values we live by at CG Tech encompass taking personal responsibility, agility of thought and action, safety, and putting people first.
You famously worked to close the deal between Royal Bafokeng Holdings and Impala Platinum. A deal that has been hailed as “40 years in the making,” it set the stage for great success for both the Royal Bafokeng Nation and Impala Platinum. Can you tell us how the deal finally came together?
Although Impala Platinum started mining platinum in South Africa in the late 1960s, their shareholders had reaped most of the benefits, with only a small trickle to the people who actually lived on the land – the Bafokeng. It was only after an extended legal battle in the late 1990’s that the Royal Bafokeng Nation started to receive a fairer royalty from the mine. But the situation had not normalised and the relationship between Impala Platinum (Implats) and the Royal Bafokeng Nation had become very acrimonious.
When I was asked to start Royal Bafokeng Holdings, the commercial entity managing the assets of the Royal Bafokeng Nation, one of my priorities was to reach economic equity participation between both parties. The first step was to reframe the relationship between Royal Bafokeng Holdings and Impala Platinum. Coincidentally, I had been at school with the Impala Platinum CEO, David Brown, which helped rebuild the trust necessary between the parties to get a mutually beneficial deal done. We engaged in tough negotiations and ended up with a complicated deal in 2006, which we reworked into a more streamlined and favourable deal the year after.
The transaction was financially enormously valuable for us, making Royal Bafokeng Holdings the largest shareholder in the world’s second largest platinum producer. For Impala Platinum, it was also a good deal because it eliminated the risk premium associated with the ongoing conflict with the landowner. The new deal allowed us to bury the conflict of the past and move forward as partners and create value together. I remember when we were about to announce the deal, the Bafokeng king , Kgosi Leruo Tshekedi Molotlegi, told me he never thought he’d see this day.
With a career that has spanned nearly 4 decades, you must have learned some fundamental lessons that can help navigate challenging times like the ones we are in. What essential advice would you give to a group of South African business leaders, United Kingdom investors, and United Arab Emirates entrepreneurs facing an uncertain future?
While I consider it presumptuous to offer blanket advice to business leaders, investors, and entrepreneurs, there are probably two foundational principles that I think are important for any business leader.
First, get the fundamentals right. Regardless of the size of your business or fund, you have to spend time on understanding and articulating your purpose and values, ensuring your governance systems are robust and stand up to scrutiny, and executing effectively. Also, always remember the difference between accounting profits and cash flow! The skills I developed as an accountant and auditor right at the start of my career, together with the help of some extremely patient mentors, helped me to contribute to the shared successes at Ivor Jones, Deutsche Bank, Royal Bafokeng Holdings, CG Tech, and now, The Virtulab. If the fundamentals aren’t there, no amount of venture capital or smart talk about innovation will lead to long term, sustainable, and meaningful success.
Second, don’t worry about what you don’t know. At CG Tech we accept that we don’t know most things and understand that we are perpetually learning. The rate at which the world is changing is increasing. From new technologies to new business models, you have to make the effort to develop new expertise. And you have to find ways to do it fast, like we did with The Virtulab. Pay attention to the market, partner with the right people and entities that have the necessary vision and expertise, and pivot when needed. This is exactly what we have done at CG Tech. Just because our South African oil and gas sector businesses Prommac and New Age, or our UAE construction services company Al Laith had been successful in traditional industries, it didn’t mean that we could rest on our laurels.