The man who turned R100,000 into a R40 billion insurance giant

At a time dominated by Harry Oppenheimer and Anton Rupert, a South African businessman quietly built the country’s fifth-largest company that revolutionised life insurance and retirement savings. 

Sir Donald Gordon’s fingerprints are all over modern-day South Africa, from Liberty to GIBS business school and the financial hub of Sandton City. 

Born in Johannesburg in 1930 to immigrant parents, Gordon was educated at the prestigious King Edward VII School (KES) in Houghton. 

Gordon excelled academically and, after matriculating in 1947, attended the University of the Witwatersrand, where he obtained a BCom in Accounting. 

Following the standard path, he completed his articles to be a chartered accountant at Kessel Feinstein, now Grant Thorton, and was set for a career in accounting. 

However, Gordon was anything but ordinary. While on the audit of the Standard General Insurance Company, he became deeply interested in insurance and long-term investing. 

Frustrated by watching his father work hard all his life and reap little financial reward upon retirement, Gordon was determined to revolutionise retirement savings in South Africa. 

At only 26, Gordon went around to the offices of South Africa’s established financiers for nine months to raise R100,000 to form a life insurance company called Liberty Life. 

In 1957, the company sold the first-ever retirement annuity in South Africa, kickstarting a decade of rapid innovation. 

Aside from selling the first retirement annuity in South Africa, Liberty introduced the first unit trust and was the first insurance company to link life insurance benefits to unit trusts. 

Liberty was also the first life assurance company to list on the JSE in 1962 at R2.70 per share. It achieved a record subscription for a public offer at the time. 

The company’s growth was almost as rapid as its innovation. Taking on the established player in Sanlam, Liberty snapped up Guardian Assurance in 1968 to form Liberty Holdings.

After a flurry of acquisitions, Standard Bank Investment Corporation took up a significant stake in the company in 1978. 

This was the beginning of a long-term relationship between the bank and insurer, which pioneered the bancassurance model increasingly popular in South Africa 45 years later. 

In the 1970s, Liberty acquired the emerging Sandton City north of Johannesburg, funding its expansion into the richest square mile in Africa. 

In the 1980s, Liberty expanded globally, listing on the London Stock Exchange and founding TransAtlantic Holdings, which became Liberty International. 

The company became a major United Kingdom property market player through its large stake in Capital and Counties. 

Back home, Liberty mimicked other sprawling conglomerates that were limited to investing in South Africa by the Apartheid government. 

Acquiring significant stakes in the Premier Group, South African Breweries, GoldFields, and Prudential, Liberty would straddle the South African economy similarly to Anglo American. 

Towards the end of the 1980s, Liberty’s relationship with Standard Bank would deepen considerably, with the insurer becoming the largest shareholder in the bank after Standard Chartered exited South Africa. 

At the time, it seemed like Liberty was absorbing the bank. Unknown to the protagonists of the deal, thirty years later, the bank swallowed the insurer whole. 

The deal would also give Gordon the peace of mind to begin to step back from running what was then South Africa’s fifth-largest company, valued at R40 billion. 

Gordon’s retirement in 1999 would bring significant changes to Liberty, with the Standard Bank of South Africa taking control of Liberty Life. 

In the year Gordon retired, the company paid out R291 million to shareholders, provided policyholders with R1.13 billion in bonus distributions, and held assets of R21 billion. 

Liberty’s relationship with Standard Bank has been extremely close at times and distant at others. 

In recent years, the bank’s leadership looked to bring this to an end by buying out the minority shareholders in Liberty and making the insurer a wholly-owned subsidiary of Standard Bank.

This was completed in 2022, with the institutions solidifying their strategic relationship and creating a fully integrated financial services provider. 

Gordon’s retirement enabled him to focus more heavily on his philanthropic and investment interests, having launched the Donald Gordon Foundation in 1971 and the Liberty Life Foundation in 1990. 

While still alive, a team of eight people would look after Gordon’s investments, with the group largely operating from Liberty’s office in Braamfrontein in the Johannesburg CBD. 

Strangely for a businessman, Gordon is better known for his charity work than his creation of Liberty Life. The foundation bearing his name remains the largest private charity in Southern Africa. 

One of the significant initiatives Gordon financed and played a leading role in was the establishment of the Gordon Institute of Business Science (GIBS) alongside the University of Pretoria. 

Gordon also had a soft spot for KES and Wits, donating heavily to both institutions throughout his life. 

As part of these efforts, he financed the construction of the Donald Gordon House at KES and the Donald Gordon Medical Centre at Wits. 

In his later life, Gordon would use his dual citizenship to shuttle between the UK and South Africa to oversee his investments and donations in both countries. 

Gordon has made significant donations to British opera, including a £20 million (R248 million at the time) sponsorship of the Royal Opera House at Covent Garden and the renamed Donald Gordon Opera Theatre in Cardiff.

This is believed to be the largest single private donation ever made to the arts in the UK and resulted in Gordon being awarded a knighthood by Queen Elizabeth II in 2005 for his services to the arts and business. 

Gordon passed away in 2019 at the age of 89, leaving much of his wealth to his children. Today, his daughter Wendy Appelbaum – a successful businesswoman in her own right – is the richest woman in South Africa. 

The Donald Gordon Foundation and the Liberty Life Foundation continue to disburse funds in South Africa and the UK.