Data fuels every aspect of investment, and one company pioneered this change more than any other: IPD.
This week’s PropCast charts the incredible story of how Rupert Nabarro and the late Ian Cullen laid the groundwork for decades of institutional investment growth when they founded IPD in 1985.
Decades before “big data” or “machine learning” became buzzwords, Rupert Nabarro and the late Ian Cullen responded to government mandates that pension funds buy up property by creating the first-ever system to report actual performance. Andrew Teacher, co-founder at Lauder Teacher – himself a former IPD alumnus, joins Nabarro in marking the 40th anniversary of IPD by reflecting on the universal influence it has had on the property market.
Nabarro’s humble yet compelling narrative on how IPD came to be starts with a social purpose borne out of academic curiosity, which then evolved into battles with incumbents, those against change, and high points driven by the support of key market players. With Cullen’s support and immense brain, the pair established what would become a new standard for transparency and benchmarking in real estate that would be acquired by MSCI just over a decade ago.
How IPD came to be
IPD did not begin as a commercial venture in the conventional sense. It emerged as a response to disorder and market inefficiency: in the wake of the property crash of the mid-1970s, the government feared contagion, with many of the speculative property investments, whose loans were at risk of default, potentially bringing down some of the big banks.
As such, the Bank of England effectively forced a “lifeboat” scheme onto the big pension funds and insurance giants. In practice this meant forced acquisitions of otherwise dubiously valued property portfolios at “incredibly low prices”. As this shift in ownership took place extremely quickly and the property was functionally “dumped onto the funds”, to use Nabarro’s words, by extension the big players needed to understand their inventory.
Establishing a foundation
Initial support for real market research and understanding was broad but thin.
The government declined to fund the project despite surface-level support, with then Secretary of State for the Environment, Tom King, reticent to financially support what he deemed to be a private endeavour. The large institutions offered no better reception, preferring the comfort of their existing agents.
Likewise, the agents themselves laughed Nabarro out of the room, saying: “You think we’re going to hand our data about our clients to somebody we’ve never met?”
It was only through the intervention of surveyors like Rafe Clutton and Christopher Jonas – directors of the eponymous agencies – that IPD secured the funding it needed to begin. Both were candid with Nabarro about their struggles and the urgency of a response: “The big four agencies are killing us; we need to find a way to fight back.”
A “generous and magnanimous” show of faith is how Nabarro describes their initial investment. Though, ultimately, IPD’s success came about because the underlying proposition was valuable; it was just that only Clutton and Jonas saw it.
The early years were defined by manual grunt work. Teams of graduates slogged through filing cabinets, recording details and minutiae of vast property holdings onto the huge computers of the 1980s. In many ways the nature of the initial work was better described by the team’s actions rather than words. Nabarro, laughing, recalls that on day one of the teams finished a 1,200 property portfolio, and every single graduate quit on the spot.
Challenge and consolidation
The arrival of competition in 1989 from a consortium of major agents working with the little-known outfit WM Company tested IPD’s resilience.
Despite early successes, the dominance of the major agents led Nabarro to one conclusion: “I thought I didn’t have a chance of winning this battle.” However, Robert Dean, a friend and partner at Savills, reassured him: “Look, these boys will never get their act together. Just keep going, and it’ll be all right.”
And continue he did…
The rival initiative failed to attract market support. WM’s managing director, recognising the robustness of IPD’s service (and the potential reputational damage associated with losing a very public face-off), transferred 27 of his 30 clients to Nabarro’s team. No victory could have been more total.
Nabarro describes it as a “completely extraordinary commercial decision”. After all, it’s not all too common that your biggest competitor gives you all their business.
IPD then went from strength to strength. The early 90s brought a substantial property crash that continued the avalanche of clients IPD received. As institutions faced mounting losses, IPD’s benchmarking tools became essential. By the mid-90s, most large pension funds, insurers and major landlords were contributors – this signalled a departure from being a periodic survey company to a dynamic service provider no real estate investor could live without.
Having consolidated their dominance in the British market, Nabarro and Cullen viewed Europe as the natural next step. Ireland came first, followed by Northern and Southern Europe, which quickly became key operational hubs. By the time of IPD’s sale to MSCI in 2012, the business was active in 33 markets – from the Caribbean to Italy – cementing its role as the pre-eminent provider of property market intelligence across the western hemisphere.
The leadership
A permanent fixture alongside Nabarro was Cullen, whose background in statistical geography provided the technical nous behind IPD’s analytics. Cullen joined full-time in 1987, leaving a tenured position at the University of London. A big leap of faith for someone Nabarro jovially describes as a “marvellously conservative character”.
Both Nabarro and Dr Cullen were aligned not just technically but philosophically. Pricing remained modest: cost plus 20% was the rule, an arrangement most partners would have found difficult to maintain. The business was known for its culture of fairness, accessibility and measured growth.
Staff retention was high – not least because, as Teacher points out jokingly, company trips to the pub were commonplace. However, unlike many firms, the culture was one of access and learning that extended inside and outside the office. The pub trips routinely involved boards and bosses of major investors – and the culture of sharing insight underpinned everything, helping forge a diaspora of skilled individuals that extends to every part of the property sector, something that has sadly been killed off since MSCI’s acquisition of the company.
A distinct background
Nabarro’s path to founding IPD was shaped less by heady corporate ambition and more by a deeply ingrained belief in self-reliance.
His father, Gerald Nabarro, was a well-known Conservative MP of the post-war period, whose reputation preceded him as one of the first state school-educated Conservative MPs and as one of the most eccentric and active voices in parliament.
Rupert, however, credits neither Westminster politics nor establishment privilege with guiding his career. Instead, it was the entrepreneurial pragmatism of his Jewish background and a family culture that prized independent endeavour that propelled him. Where large parts of the middle class would be naturally attracted to the university-professional pipeline, his father directed him (albeit unsuccessfully) to an industrial apprenticeship, hoping to imbue an ability to stand on one’s own – a mindset that informed many of his later decisions and that in some ways was his greatest “family inheritance”, to use his own words.
“My father never told us to be politicians,” he recalled quite vividly. “But he was absolutely insistent that the only way to live a reasonable life was to stand on your own two feet and run your own affairs.”
“It’s not that business is risky,” he said, “it’s just that most people are trained to think it is. We weren’t.”
It was this attitude to risk, not wanton recklessness but a confidence in standing apart, that allowed IPD to emerge and ultimately thrive.
The future
Asked whether the market is more opaque today, Nabarro is cautious. He is keen to point out the decline of long leases and the increase in volatility as factors that mean the calm of the 20th century is long gone.
His advice for those entering the market is distinctly pragmatic: focus on sectors with growth. Accept that the path is more international, more competitive, and more complex. But when the right opportunity presents itself – act decisively and seize the moment.
Whether IPD would get created today, in a world where data supremacy is key and where data itself is big business, is unclear. But with more investors focusing on granular, operationalised assets and with a great degree of uncertainty ahead, one thing is clear: there has never been a greater need for what IPD established.
