Larry Kestelman: from Ukraine to a league of his own

Larry Kestelman’s is a classic rags-to-riches immigrant’s tale.

Larry Kestelman went from owning NBL’s Melbourne Tigers to buying the whole league. Picture: Stuart McEvoy.

Larry Kestelman leads LK Group, whose latest apartment development grabbed headlines when the group got Oscar-winner Charlize Theron to advertise its building. He co-founded Dodo Mobile and owns the National Basketball League.

How did you become an entrepreneur?

I spent seven or eight years working for other people. I sat in the corner as an auditor, given the darkest corner of the office. And I promised myself I’d get a big office with a lot of light and a view …. And now I do (laughs).
What was your first big investment?
My first property. I bought a block of land in South Caulfield in my mid-20s. Subdivided it into two townhouses; lived in one, sold the other. It was only $30,000 but it was everything I had at the time.

I made a lot of mistakes starting out. But you get better at it.
So how did a young property developer end up founding Dodo?
I wanted to move into something more dynamic than property, so I went to this little internet providers’ conference in Sydney. There were about 900 providers there.

They spent the best part of an hour talking about Telstra: how bad they were, how bad the industry was. I wanted to be a leader of the opposition. I never thought I’d beat Telstra but I knew I could better than everyone else. The only other telco which has really had the same sort of organic growth is TPG.
What do you make of TPG’s recent moves into the mobile broadband market?

I have a lot of respect for David Teoh. He’s very different to a lot of chief executives out there.

But one thing I do know about David is that when he puts his mind to something, he’ll see it through to the end. If I was in the mobile market still, I’d be a little worried. He’ll shake the mobile market to its core.
So why did you leave?
We started with a group of six and that turned into 250 staff members here, 1500 in The Philippines. I literally worked myself out of a job. It was like selling a pet to a good home. But with Vaughn Bowen and M2 Communications (who bought the business for $203 million in 2013), I knew it was in good hands. They have preserved the Dodo DNA and it’s doing really well. A lot of the same people are still there.
What led to your current Melbourne luxury apartment projects, LK Tower and Capitol Grand?
I’m aiming to provide for people who have sold their $10m-$20m house who want less space but the same luxury. And our space on the corner of Toorak and Chapel Street in South Yarra symbolises that, it’s where glamour and money meet.
What segments of the market have been affected by the issue of oversupply?
We’ve sold everything we have; we’ve settled everything we have.

The people I feel sorry for are actually renters. We’re heading towards auctions for rentals if we don’t act soon. A friend of mine from the US recently moved here and he was horrified, there were 20 to 30 to 50 people turning up at apartments which are being rented out. And with a population boom, there’s going to be more demand for apartment living.

We need to grow up as a city and start building things one level up than we are now.
How do you think recent moves to cool investment in apartments will affect the market?
I don’t buy into the way it’s been done. It’s a blanket approach to a problem in a very particular part of the market. I don’t feel apartment living and prices are in the same field as suburban living.

Restrictions on lending and slowing down supply are counterintuitive. We need more supply.
How did you get Charlize Theron to advertise your apartment development?
We didn’t think we’d get her but I got on to the phone to her people and sold my vision. She’d never done anything like this endorsement except Dior.

But she’d been in Australia through Mad Max and she fell in love with our product.

We had to jump through a lot of hoops to make it happen.
What are your own investments?
For me, it’s property, without a doubt. I’m a control freak, property is what I know and I can control.

I do have stocks, but I’ve always thought if you want something done, do it yourself.

As well as property, I still have other businesses. I’m very proud of our call centre business, Acquire Asia Pacific, which we retained after selling Dodo. We have 7000 people in the Philippines and the Dominican Republic who look after a lot of Australian brands.

I’ve created my own real estate company, my own construction company. I don’t do things the easy way.
Why did you invest in the National Basketball League?
I bought the Melbourne Tigers basketball team, now Melbourne United, in order to give something back to the community. The sport had given a lot to my son and my family and I was so sad to see the attendance and the quality of the games drop.

The wider league was more of a business decision. It’s very unusual to own an entire league but I knew the popularity of basketball all across Asia, and Australia is the best at it.
Does being an immigrant give you a different perspective on investment?
I came out of what was then the Soviet Union, now Ukraine. I spoke Russian, and I moved here when I was 12. It’s not about investment, it’s about to survival. I’ll work harder, fight harder to not fail, to get what you deserve.

My dad went to 52 job interviews before he got a job with General Motors Holden.

You fight to survive.