Embracing the opportunity to reset

Earlier this year, Stellar Asset Management, an inheritance tax and estate planning specialist, bought its fourth golf club, to ensure it avoided insolvency. Here, Nicole Wheatley speaks to Ben Blackburn, who’s tasked with overseeing this portfolio, to find out why this company is investing in golf clubs and what changes these venues are experiencing.

“Every week details land on my desk of at least one golf property that is looking for our help,” explains Ben Blackburn, the man who oversees Stellar Asset Management’s growing golf portfolio.

“The ones that really interest us are those where we can see the potential to diversify the business. Yes, we will invest in our facilities and improve the golf product available at our venues, but ultimately our aim is to develop new revenue streams for those businesses. We want to become less reliant on golf.”

Ben started out in the industry in an entirely different capacity. After playing from a relatively early age, he was keen to pursue a career in the sport and went down the coaching route, becoming a PGA professional. This undersells Ben’s involvement with the PGA, as he sat on the PGA executive board for over a decade and also held the chairman’s position at regional level for many years.
This tenacious businessperson, who’s clearly passionate about golf and its heritage, tends to buck convention for the greater good. When he could not see a route forward as a coach in 2017, he took the rather dramatic step of taking a sabbatical to decide what was next. Five days later, he was working for Stellar! Ben had been coaching the founder of Stellar Asset Management, an inheritance tax investment business, for over 20 years and it had just purchased Murrayshall Country Estate and Golf Club in Scotland. The first golf property in its portfolio. Ben was asked to conduct an audit of the venue’s golf operations and the rest is history.

Since then, Stellar Asset Management and Ben have acquired and invested in three additional golf properties that at first glance are extremely different. Paulton’s Golf Centre in Romsey, near Southampton was a municipal pay and play venue that the team purchased in 2019. This was followed in 2021 by nearby proprietary members’ club, Bramshaw Golf Club, the acquisition of which included the adjacent Bell Inn. And, most recently, it stepped in to rescue Newark Golf Club from the administrators, the acquisition of which represents the first time the business has taken on a private members’ club.

So why are golf courses such an important investment target for Stellar Asset Management? Firstly, it regards golf as a leisure property and is of the opinion that golf is an area of the leisure sector that has rarely benefitted from the investment it both merits, and needs. This makes it a perfect fit for the portfolio, as it allows Stellar to invest, uplift and deliver a favourable return for its investors from assets with strong, yet still largely untapped potential.

In 2021, for example, at Paulton’s, which Ben describes as his ‘first born’, it was able to bring the venue back, post-Covid, as an entirely new proposition, complete with the first Toptracer range in the area. The investment continued with a new clubhouse, upgraded greens, and the acquisition of a property to enhance the stay-and-play proposition. When it acquired Bramshaw Golf Club with the Bell Inn, it was able to immediately create a ‘play with us, stay with us’ experience tapping into the London and south-east golf market, as well as attracting visitors from abroad via Heathrow and Southampton airports.

“All of our venues had similar challenges when we became involved,” examples Ben “They had fallen into the trap of trying to make one revenue stream work really hard. That has an enormous impact across all areas of the business. Staff are often neglected, promising ideas are overlooked, investment in the facilities stops, and turnover remains stagnant. That is frustrating for all concerned.”

When asked what the biggest challenge of a new acquisition is, Ben’s answer is simple: implementing cultural change. At a proprietary club, members often have no idea of the financial issues a club is facing, so when a new owner comes in it can be quite a shock and people are fearful of change. Staff similarly are used to doing things a certain way, and the suggestion that there may very well be a better way to do things is not always welcome.

There are always exceptions, and those employees are held in the greatest regard and equipped with the training and confidence to progress. Molly Pavey, the current general manager at Bramshaw is a perfect example. She was awarded one of only three ‘Young Manager Bursaries’ by the Club Management Association of Europe (CMAE) this year and Ben matched the funding as a means to invest in the future of the business and her career. Molly is set to assume a management role across the entire group by the end of this year.

Another example is Kirsty MacDonald who has been the teaching professional at Newark for several years. She is a highly regarded PGA member, having served on the PGA executive board with Ben, but ceased the opportunity to change her career path when Stellar acquired Newark and will be training to become the golf club’s manager.

“I find it fascinating how people react,” continues Ben. “The greenkeeper at Newark has surprised me more than anyone. When we took over, the course was not in great shape and a lot of blame was being placed at his door. But he is incredible! He has embraced the opportunity to reset. He is receptive to change and feels empowered to do a great job.”

The acquisition of Newark Golf Club made headlines earlier this year because it is the first private members’ club to go through such a process. David Stein, investment manager at Stellar Asset Management, whose job it is to oversee the strategy, operations and performance of the golf portfolio, has been closely involved in the acquisition of Newark Golf Club. He is excited about the plans for improvement and the short to long term impact their investment will have.

He explains: “A golf club of this size, history and potential does not often become available and we look forward to delivering a positive return for investors from this exciting opportunity. As a private sale, we were able to secure the asset at a favourable price, while safeguarding the future of the club, the jobs of its staff and the financial interests of its members.”

The acquisition process at Newark was relatively quick compared to the normal 18 months it would take to complete due diligence. And Ben describes it as the smoothest to date, mainly down to the fact that – unlike proprietary clubs – the members knew that Newark was in trouble. Despite initial concerns about how members would feel during the transition to becoming a ‘customer’, the biggest challenge to date has been bringing all the outsourced elements under one umbrella.

Newark Golf Club has operated as a private members’ club since 1901. The business’ core revenue stream has been its membership fees. Whilst Stellar is pleased to inherit a committed membership base, there are commercial opportunities that have not been a focus historically, such as attracting visitor green fees and enhancing food and beverage and retail revenue, both of which were previously operated by franchisees. Ben and the team at Stellar will bring all of these services in-house to gain greater control over how they are developed as they look to broaden the club’s appeal and open up new revenue streams.

These short-term plans are already having an impact on the business and will quickly bring the golf course and club back to a standard that is reflective of its heritage. Mid-term investments will be made in the facilities themselves, enhancing what this 125-year-old picturesque, rural heathland golf club has to offer and – of course – in the long-term they will employ a diversification strategy to offer customers more than just golf.

As for the future for Ben and Stellar Asset Management, Ben concludes: “Golf deserves and needs investment. The ambition for us is to find venues that have significant golfing heritage and help them evolve. Amazing private members’ golf clubs are dying, and we have a proven process that can not only rescue them but secure their future. Great golf clubs owe it to their members to look forwards and not stick to methods that are no longer fit for purpose.”