CFO Spotlight: Alex Gersh, Paddy Power Betfair
We speak to Alex Gersh, CFO of PaddyPower Betfair as he talks about his incredible international career, managing a merger and shaking hands with Putin.
HedgerWay: After graduating from the City of New York-Bernard M Baruch College with a bachelor’s degree in accounting in 1986, you trained with EY in New York as a Senior Accountant. Talk us through your career from your first finance role through to your current position as CFO at Paddy Power Betfair.
ALEX: After finishing in public accounting I decided to move into private industry. My first role was at Metro Mobile Communications which was a publicly listed company owned by a famous investor in the US. I was there for a few years before I moved on to a tech company as a Systems Controller based in New York.
I then moved to Motorola who were developing joint ventures with 3rd world countries to build and operate cellular systems. Motorola had obtained a license with the city of St Petersburg to start working in Russia and at 29, I became their CFO and COO. As the city owned 50% of the business, the board consisted of several Government officials and I regularly met with the Mayor and Putin, who at the time was the number 2 in St Petersburg. After three years Motorola sold their part of the business and I moved to London to become the CFO EMEA for their group who had owned the Russian joint venture.
After Motorola, I moved to British Telecom as CFO for the European side of the business before being promoted to CFO of BT Worldwide. After a few years I moved to the UK with BT Cell Net before moving relocating back to the US with a private equity held business which required a massive restructuring. I was very happy in the US but I soon received a call from my old boss at BT who asked for my help in fixing a business based in Europe he had recently joined. The company had just been through chapter 11 bankruptcy and operationally run very badly. I relocated back to Europe and within 18 months we had fixed the business and made it very profitable. When I joined, they were trading at $33 a share, 18 months later the price had gone up to $220 a share.
I then moved to a publicly listed business with a 3.5 billion market cap and was NASDAQ listed. In 2012, after spending 7.5 years with the business, we sold the company for $5 billion dollars which was one of the biggest PR deals in Europe that year.
I then joined Betfair where I have now been for 6 years. When I started, our market cap was £900 million, and it is now £7 billion. The company has gone through a huge transformation and period of growth as we recently merged with Paddy Power. We are now a FTSE listed company in the UK with over 6000 people operating in over 100 countries.
HedgerWay: Such an incredible journey!
ALEX: Without a doubt and a lot of fun. Working within the international markets and in fast growing businesses on the edge of technology has been amazing. I am very privileged to have worked with great people who have built teams of high performing people, I have learned a lot from them. It has been a wonderful experience.
HedgerWay: You’ve managed big, diverse teams in your career. What are the key ingredients for leading such teams?
ALEX: You need to have a good sense of strategy. You need to identify what the company wants to achieve and the direction you want to take it in. It’s important to hire people who are smarter than you and let them challenge you. At Paddy Power Betfair, I have a very intelligent team and it’s my job to enable them to apply the knowledge they have and to challenge them to do better. If you encourage the people who with you and let them know that it’s ok to make mistakes, you then get a cohesive team that works well together. It’s important to create a culture of team work to make people understand that it’s all of us or none of us.
Personal interaction is very important. I interact with and talk to everyone in the business to find out what’s going on and what people are working on. You must recognise the people within your organisation, it means a lot to the individual. All these things create a high performing team.
Personally, I don’t suffer fools greatly so if I hear that you are unable or unwilling to support the business and work well as a team, I will be honest and discuss with you, your future with the company.
HedgerWay: You were at the forefront of the merger between Betfair and Paddy Power, what are the challenges of navigating through a deal of that size and what have been the major impacts?
ALEX: There were several challenges throughout the process, however we have been successful in bringing the two companies together and have achieved £65 million of synergies, a year earlier than we anticipated.
The biggest challenge was the cultural change for both companies. When we first merged, there was a period of adjustment for the staff. I underestimated how difficult it was going to be for everyone and how much we needed to constantly bring people together to demonstrate that we were all going to benefit from such a big change.
For the finance team, the merger meant that there suddenly became two people for one job. Choosing who to keep in the business was a tough decision but the team became stronger and we now have a high performing international group of people. There are still challenges within the business to ensure things are working correctly and creating and driving new product innovation however, so far so good.
HedgerWay: You have been part of a NASDAQ, FTSE250 and now FTSE 100 company. How do these different markets influence the role of the CFO?
ALEX: In my experience, the compliance, rules and requirements are very similar. In business, as you go up in size you become more visible, therefore you have to be more organised with specific procedures. At Paddy Power Betfair, we strive to be the best we know we can be. When we benchmark ourselves, we don’t benchmark against companies in the same bracket as us, we focused on finding the best practices in the UK. We then then try to make sure that we apply and adhere to those practices.
HedgerWay: Given the demands of your role at Paddy Power Betfair and your NED responsibilities, what advice would you give to other CFO’s looking to better manage their time?
ALEX: Taking on a non-exec role is a great experience and opportunity to develop your business skills, but you need to pursue the idea for the right reasons, which exclude prestige or fee. The challenge of operating a retail business in a crowded environment with the pound weakening and online retail eroding the high street, presented an interesting concept to me with Moss Bros. I strongly believe that retailers who have an online and retail capability have an advantage to those to who are purely based online. I was very impressed with the management team and board members, but it was an intellectual challenge to step away from my day to day role and look at something from a broader perspective.
HedgerWay: And finally, what do you do to unwind?
ALEX: I am a devoted Dad to two sons who are 17 and 12, and spend my free time enjoying their company. My oldest son is about to begin University in the US and my youngest is into sport, especially football and tennis, which we play together.
I have had an amazing career and enjoyed some incredible experiences but there is nothing that compares to the pride I feel when my children achieve a certain success. They both make me very proud and I like to spend as much time with them as possible. If I never worked another day in my life I would spend me time helping my kids, guiding them through life. They are my passion and I am incredibly lucky to have them.