Mention of bonds and Aston Martins usually calls to mind the fictitious adventures of 007, but for Lawrence Stroll, the words relate to his very real ambitions to shake and stir Formula 1. Less The World Is Not Enough; more Only The World Championship Will Do.
Canadian billionaire Stroll this month launched a retail bond in his Aston Martin F1 team to raise money for a new £200m factory at Silverstone. The five-year bonds will yield seven per cent interest annually and have a minimum initial subscription of £1,000.
Stroll has hired F1 royalty in Sebastian Vettel and Martin Whitmarsh in a bid to turn the team he rebranded this year after becoming chairman of the British luxury car maker into title challengers. He believes the new plant can help them topple Mercedes, Red Bull and Ferrari.
“We’re issuing the bond to support our financing of this tremendously important new campus,” he told City A.M. “It’s a full campus all about making the cars go faster and it’s part of the investment that’s required to have a world championship Formula 1 team.”
Aston Martin face an uphill task to overtake Mercedes, Red Bull and Ferrari, who have won the constructors’ championship in all but three seasons this century. But F1’s new $145m-per-team budget cap means his outfit can “absolutely, without doubt” knock them off the podium, he says.
“A lot of these teams have won historically by outspending the competition. Without the budget cap I would be dreaming,” Stroll added.
“I would not mislead you, it’d be very difficult for me as an individual to compete with big OEMs [original equipment manufacturers] or big marketing budgets of fizzy drink companies.
“But this budget cap levels the playing field and also gives a road to profitability. Like any business, you have to invest. I’m at the investing stage. This factory is part of that investment.
“We have some top level recruitment in [new chief executive and former McLaren principal] Martin Whitmarsh but also in senior management. Top aerodynamicists, top engineers; incredible recruitments at all levels of the business.
“I always say you need five things to win: passion, leadership and vision, which I bring; the best people surrounded by passion and vision; then it’s providing those people with the tools and the process in order to be world champions.
“Part of the tools here is this new facility. We’re investing towards a hugely successful future.”
Why budget cap rules could help Aston Martin
Stroll, who made his fortune in fashion, entered F1 when he bought a Force India outfit that punched above its weight out of administration in 2018. He believes that legacy makes Aston Martin well placed to thrive under budget restrictions which came into force this year.
“When I took over the team that was once Force India, they did more with less, finishing fourth on a third of the budget and head count of other teams in front of them and below them in fifth and sixth,” he said. “This nucleus of people that we already have in the factory has been able to do more with less. This budget cap plays right into our strengths.”
Aston Martin are so far struggling to match the fourth-place finish in the constructors’ championship they mustered last year under their previous guise as Racing Point. Ahead of this weekend’s US Grand Prix they lie seventh on 61 points, of which 35 have been won by four-time drivers’ champion Vettel and 26 by Lance Stroll, Lawrence’s son.
“Performance on the track has been disappointing, and that has been primarily down to some aerodynamic changes in the rules,” said Stroll Sr. “It’s all about the future; it’s not about this season, or next for that matter. Rome wasn’t built in a day.
“We’ve owned this team a couple of years now. We’re a couple of years behind. This factory should have been finished today and would have been if not for Covid. Sadly that made us pause. It’s far from project finished. I’d say we’re somewhere in the middle.”
Retail bond offering ‘for the fans’, says Stroll
Stroll says part of his reasoning for using a retail bond to part-fund the new factory, which will include a wind tunnel, is to cater to what he believes is burgeoning demand for a meaningful stake in the fortunes of the British brand in motorsport’s leading series.
“Since I converted the team into Aston Martin on 1 January, it’s been truly overwhelming. It’s as though the Britons feel they own part of this iconic 108-year-old institution, and that’s what gave me the motivation to say ‘somehow I have to include them in this process’,” he said.
“We’re certainly not at the stage yet of considering an IPO – I don’t know that we ever will be, by the way – so I wanted to be able to include the fans. A retail bond of course also has institutional investors, but it does give that fan a way to feel a real sense of ownership.
“Fans, staff – we’re going to have close to 1,000 people on this facility, so to give everyone a sense of proprietary ownership was really the driving force behind this decision.”
The increase in interest in the rebranded team has been most noticeable in sponsorship enquiries and job applications, Stroll says.
“Prior to being Aston Martin we’d get significantly – I mean 10, 20 times – less enquiries. The amount of letters we’ve got from various engineers, technicians, people throughout F1 who say ‘we’d really like to come to Aston Martin and put on our CV that we helped make this the next British F1 world champion’, it’s truly been overwhelming.”