Assael is to be the 18th AJ100 practice to become employee-owned after co-founders John Assael and Russell Pedley turned down a big money offer from the US
The south London-based company will hold a vote on 1 February to vote for two members of staff to join Pedley and Assael as trustees.
An independent chairman will be appointed at the end of next month to complete the trust, which will pay for the ownership of the company according to profits over the next decade.
The employee-ownership structure is becoming increasingly popular with practices in the UK. Last year Orms and MSMR became the 16th and 17th top-100 firms to make the switch from the traditional set up. The so-called ‘John Lewis model’ was pioneered in the architecture sector by Make when it launched in 2004.
‘Our main motivation is to have succession in place so what we’ve built up over all these years carries on,’ said Assael. ‘It’s all about legacy and making sure the staff who helped us build the company play a role in owning and running it.
‘We looked at private equity; we were approached by people who wanted to buy it from the US; we looked at a management buyout but that is so expensive and complicated.’
Assael conceded that he could have made more money more quickly by selling to a US investor, described as a large architectural practice specialising in multi-family housing.
We could’ve made a quick buck but we were worried about how they would treat our staff
‘We could have made a quick buck – and with the Americans it would have been significant money – but when we checked them out we realised it would have been a four-year earn-out process and we were worried about how they would treat our staff. In theory we might have made more money, but we felt uncomfortable.’
As part of succession planning, alongside the creation of the new ownership structure, Assael has appointed a new managing director. Pete Ladhams, who joined the practice as a student in 2001, takes the reigns at the age of 42.
Assael MD Pete Ladhams
‘I’m extremely excited, this is a massive opportunity,’ he told the AJ. ‘We have a strong culture and I want to retain quality staff. All this will be helped by the employee-ownership model.’
Taking the practice down its new path will not require huge effort, Ladhams insisted.
‘The company already felt quite employee-owned and it seems a natural route to go,’ he said. ‘Very little change needs to be made.’
The practice will continue to focus on growth with Ladhams taking on the day-to-day decision-making but working to an existing strategy.
‘We are one year into a five-year business plan,’ he said. ‘We want to continue to grow slowly and steadily.’
The practice opened its first overseas office this month, in Bahrain, and is considering putting down roots elsewhere in the EU as Brexit looms.
‘We are looking at setting up a studio in Dublin, potentially, on the back of our build-to-rent experience,’ Ladhams explained. ‘There is huge demand over there, we’re seeing clients move over there. We are embracing that. There is a benefit to being in Ireland.
‘Some of our directors are Irish, my wife is Irish, there are strong links and we have one eye on keeping an EU presence. That is important. But we have an opportunity in Milan as well that could become an EU presence if needed.’
While Ladhams looks to take on more and more of the running of the company, the co-founders have no plans to leave. Assael will retain a 19 per cent share in the firm, Pedley 6 per cent.
‘I will carry on but in a different role,’ said Assael. ‘I’m already less involved in projects and doing things to contribute to the profession. My involvement in projects will increasingly diminish.
‘But I don’t want to spend my days watching daytime TV. Being involved with the business is very important to me.
‘Russell is younger than me and his focus is running the overseas offices. That will be his main role for the next 10 years.’
Mayor of London Sadiq Khan in December approved an amended 272-home Assael scheme five months after it was rejected by Greenwich Council.