Jo recently spoke to Adam Branson of Architects Journal about setting up an investment company alongside running the architectural practice.
24 October, 2018 By Adam Branson
The designer and facilitator talks to Adam Branson about how she set up an investment company alongside running her practice.
‘I am the opposite of Zaha Hadid,’ says Jo Cowen with some certainty, a little into her interview with the AJ. It’s a neat summary of her view of the role of the architect today – one part of a team, both designer and facilitator; someone who makes a building both beautiful and deliverable.
This attitude was core to her thinking when she set up her eponymous practice. ‘I could see the changing face of architecture,’ she says. ‘Being an architect in the 1970s, 80s and 90s was a very different proposition to being an architect today. Now, architects are seen as just a component – albeit a critical component – of a bigger development machine.’
Set up in 2013, Jo Cowen Architecture (JCA) has grown significantly over the past five years, not least due to Cowen’s prodigious networking skills – the day after the interview she was to be sailing off St Tropez with Regus founder Mark Dixon. The business has diversified its practice and developed a markedly commercial attitude, most notably with the establishment of sister company Jo Cowen Capital.
South African by birth, Cowen moved to the UK to study architecture, emerging with her Part 2 qualification with distinction from Westminster School of Architecture in 2007 before going on to gain her Part 3 at UCL. After a spell at restoration specialists Peregrine Bryant Architects, she moved to Foster + Partners before embarking on a near eight-year stint at Rogers Stirk Harbour, where she worked on projects such as the extension to the British Museum and the Leadenhall Building.
It’s an interesting CV for someone for whom the concept of the starchitect is anathema, even if she wears her dogma with good humour and respect for her former employers. ‘Rogers was fantastic and I could never say anything bad about it,’ she says. ‘But I had a view of how I wanted to do things and how I wanted to run a practice. That starchitect role – that “remember I’m the architect and this is what you get” approach – made me uncomfortable. I could see that the industry was changing, with architects becoming service providers.’
To make the leap from RSHP, Cowen spent 18 months moonlighting in the evenings, working on domestic planning applications for basements, side returns and loft extensions in her local area. ‘I did that for a year and a half so that I had the confidence that I would have enough money coming in,’ she says. ‘It was a really busy time, but I was 29 or 30 years old. I also had a baby at the time, which meant that I wasn’t having nights out and could be at home more to do [the applications].’
JCA still does a significant volume of domestic work. Indeed, Cowen believes that working on such projects provides her staff with invaluable end-to-end experience of the development process. But it has also managed to make the transition to major multi-unit and commercial developments. It was a move Cowen found far more challenging than setting up her practice in the first place.
‘In order to get into multi-unit work we realised we were going to have to do something different,’ she says. ‘What I did was to go into a joint venture with a developer and invest all the fees on a very high-risk planning scheme. That effectively aligned us and gave us that risk-reward at the end of planning. It wasn’t a traditional risk-reward fee – we actually owned part of that development; we were a shareholder.’
The development in question was The View, Battersea (below), and Cowen was indeed successful in gaining planning permission (construction started this month). However, the decision to invest JCA’s fees was fraught with risk. ‘If we hadn’t got planning we would have been in trouble,’ she says. ‘In order to do that I had to take an extension on my mortgage and we had to do more and more domestic jobs. We were working all night on domestics to keep enough money coming in to support the larger project.’ The risk paid off and allowed JCA to step up to take on projects of greater scale. But it also gave her a taste for engaging with developers in a more entrepreneurial fashion. While now in a position to work with established players, originally Cowen’s intention was to work with up-and-coming developers – which tend to be rich in ambition and ideas but cash-poor. The ‘Argents and Stanhopes of tomorrow’, as she puts it.
‘These developers would come to us with amazing sites and ask if we could draw up a spec scheme, do some free work, so they could then run around trying to find the money,’ she says. ‘I said “fine, we can look at that, but we’re going to take an interest pretty early on and we’re going to bring in some syndicated equity”.’
Here, the domestic work also played a part, with several wealthy clients coming together and creating an equity pool – the syndicated equity – that formed the basis for Jo Cowen Capital (JCC). JCC charges a percentage of the capital introduced, paid by both the investor and developer. There is also a return on the equity the company invests of its own in any particular scheme. However, Cowen is at pains to point out that JCC is not a developer – she jokes that otherwise she would be competing with JCA’s own clients. ‘It’s an origination platform for investment opportunities,’ she says. ‘Developers don’t talk to other developers and funds don’t speak to other funds. Architects have this unbelievable audience with both. So JCC will say this fund has got this cycle length and this risk profile, and it wants core returns or opportunistic returns. We then start to pair funds and developers. It’s an opportunistic company that works alongside Jo Cowen Architects and only requires three or four people to be involved.’
Running JCC requires an intimate knowledge of investment management and how funds are structured, something that Cowen says ‘took me a lot of nights and a lot of audiobooks to learn’. It also requires a deep understanding of what the company can and cannot do if it is to avoid the need to be regulated by the Financial Conduct Authority.
‘We know somebody who has equity and we introduce them to somebody else,’ says Cowen. ‘It’s their choice whether they invest or not. We are not advisory in any capacity. We don’t do appraisals; we don’t do viability assessments; we don’t do valuations. We have our own equity – we now have a war chest – and that is the only equity we invest. We don’t need to be regulated.’
The JCC model is innovative, but it is clear Cowen still spends the majority of her time on her architectural practice. She reveals that JCA has just won a competition to design a ‘fantastic project’ for the Canary Wharf Group, although she declines to elaborate, and describes how the practice is heavily involved in both the build-to-rent and co-living markets, as well as a nascent concept for a subsidised graduate living product aimed at helping cities retain talent.
So, there is a lot going on at JCA and its sister venture JCC – not bad going for someone who just five years ago was working on domestic planning applications in her free time while tending to the needs of a baby. JCA is currently expanding in multiple directions, but you get the sense that under Cowen’s steerage the practice won’t lose its focus.
The founder, after all, is clearly someone who knows what she wants to achieve and, so far at least, how to achieve it.