By Ali Hussain

The entrepreneur James Caan, 49, is the founder and chief executive of Hamilton Bradshaw, the British private equity firm through which he has invested millions in sectors ranging from retail and leisure to financial services and technology.

Caan was born in Pakistan and came to Britain at the age of two. He was brought up in east London and went to school in Forest Gate.

In 1985 he set up Alexander Mann Group, now one of Britain's leading human resources outsourcing firms. It achieved revenues of £130-million before Caan sold it to a private equity firm in 2002. In the same year, he graduated from Harvard Business School's advanced management programme.

Last year was a busy time for Caan. He started raising money for a commercial property fund and is also working to launch a version of The Big Issue in Pakistan, having been made chairman of the magazine last month.

He lives with his wife Aisha and daughters, Jemma-Lia, 22, and Hanah, 21, in St John's Wood, London.

How much money do you have in your wallet?

About £280. I've just come back from a holiday in Thailand and didn't have any sterling, so took out a few hundred from the bank.

What credit cards do you use?

I have an American Express Titanium card, an invitation-only card, which costs about £2000 a year. It offers a personal concierge service, which I use on a day-to-day basis, booking taxis, restaurants and so on. My daughters also use it to book cinema tickets and other things, so I would say it's value for money. I pay my bills in full each month.

Are you a saver or a spender?

I love spending. I recently bought a Damien Hirst. It's a beautiful hand-painted human skeleton, quite psychedelic. It cost a few hundred thousand. My wife is an artist, so we love to acquire pieces like that.

The entrepreneur James Caan, 49, is the founder and chief executive of Hamilton Bradshaw, the British private equity firm through which he has invested millions in sectors ranging from retail and leisure to financial services and technology.

Most of my income is derived from the sale of assets. Last year I was predominantly investing. However, I do have a trust fund that gives me a six-figure allowance each year. It was set up after I sold part of my stake in Alexander Mann in 1999, when it had revenues of about £60-million.

How has the credit crunch affected you?

Last year was a record time for my business. Normally, we would make two or three acquisitions, but in 2009 we made nine. As banks weren't lending, a lot of businesses found it extremely difficult but that gave us plenty of opportunities.

Recently we acquired a 90% stake in DRC in a medical recruitment company. It has been growing by nearly 50% a year for a few years, turning over about £40-million in 2009. We project turnover to grow to £100-million within two years.

From March to December, the value of Hamilton Bradshaw's assets increased by 82%, or several million pounds.

What is the outlook for 2010?

I think the first half will be quite positive but things will change after the election. I expect higher taxes and lower public spending.

There's also the prospect of rising interest rates that will end the artificial boost consumers have had from low mortgage payments.

Have you ever been really hard up?

During the 1991 recession, when I was running Alexander Mann, there was a point when I didn't have enough money to pay wages. My bank refused to give me an overdraft so I had to withdraw money using my credit card.

I think the company made £1500 profit that year. I was devastated. In previous years, we had easily gone over the £1-million mark.

Do you own a property?

I have a four-bedroom art déco house with a garden in north London. I bought it in 1995 for about £2-million and it's probably worth about £10-million now. I also have a two-bedroom apartment in Cannes, right by the beach. It cost about £1-million in 1999. No idea what it's worth now.

How is the commercial property fund doing?

We're still raising money and hope to achieve about £150-million by the end of February when we will start buying properties. It's primarily for institutional investors. I will be looking to invest my own capital but I'll make a decision as to how much in February.

Property last year was quite challenging but there were good opportunities if you knew where to look.

Separate from the property fund, I bought an office block in Mayfair through my business, which has gone up 50% over the past 18 months.

What was your first job?

I did a paper round when I was 12 and earned about £2 a week.

What is the most lucrative work you have done and did you use the money for anything special?

Setting up Alexander Mann. I started it from scratch with £20000. When I sold my stake in 2002, it had revenues of £130-million. It's given me the opportunity to do what I do today.

Are you better off than your parents?

Yes. My father came to Britain in the '60s and worked in the textile business.

Do you invest in shares?

I went into equities in March last year, having steered clear previously. I thought the market was overheated in 2007, so managed to avoid some of the worst of the downturn. Last year, however, stocks looked very cheap.

I bought firms such as Barclays, M&S and BT. Not all did so well. We bought some commercial property firms that performed quite badly. The sector overall hasn't recovered. What we have seen is a bounce in very specific parts of London.

We were able to make a profit by picking individual properties, such as the Mayfair offices, rather than property investment firms that invest in a broad range.

What's better - property or pension?

Property, though I have a self-invested personal pension in which I have commercial property as well as other investments, so I combine the two. The pension outperformed the market last year.

What's been your best investment?

Again, it's the time and money I spent setting up Alexander Mann.

What about worst?

I invested in a sandwich chain called Benjys in 2007. It had about 100 outlets and a factory in east London with about 300 staff. It was my first foray into the food sector and I soon realised I had got into something I didn't really understand. It had huge debts and I thought I could tackle that but I ended up losing several million, and sold within six months.

Do you manage your own financial affairs?

I do, but I have a team of accountants and financial advisers working with me.

What's the most extravagant thing you have ever bought?

I bought a yacht last year. It's berthed in the south of France and I take it out about once a month. It's worth a few million and costs a lot to run, too. It has a permanent salaried crew.

What is your money weakness?

I love spending on my wife and children.

What aspect of the British tax system would you change?

The 50% rate is a mistake. In a downturn, the government should be encouraging growth through lower taxes. I won't be driven out of Britain because of it but I know many people who are leaving - mostly for places such as Zurich, Monaco and Dubai.

The 50% rate has less of an impact on me as I am a non-domiciled resident. It means I pay tax on any income I make here but a significant portion of my money is made abroad through things such as commercial property and other investments. I pay local tax in whatever jurisdiction I make money.

Do you play the lottery?

No. As an entrepreneur, it goes against all my principles.

What is your financial priority?

My family. I want to ensure my daughters are set up in life.

What is the most important lesson you have learnt about money?

It's hard to earn and easy to spend.

Source: The Times