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Robert Tchenguiz intends to use a large chunk of the proceeds from his new Liz Truss-fronted club to pay off a mortgage owed to property moguls the Reuben brothers.
Companies connected to the financier owe the Reubens around £200mn, which includes a mortgage of around £130mn on Leconfield House, the large Mayfair office building he is planning to turn into a private club, according to people familiar with the situation.
Truss and Tchenguiz are searching for 700 founder members to put in £500,000 each, raising a total of £350mn.
The Leconfield, which shortlived UK prime minister Truss described in a promotional video as “a nexus of a global network of leaders, of entrepreneurs, of technologists”, will be based in the building on Curzon Street. Leconfield House is the former headquarters of the MI5 security service.
A person familiar with Tchenguiz’s position said he had “no personal loans with the Reuben brothers” but confirmed that the £130mn mortgage on Leconfield House had a “market-standard” interest rate.
Promotional material for the club reviewed by the Financial Times shows that Tchenguiz will use £200mn of the target £350mn to pay off the building’s mortgage and complete the purchase of Royal Pavilion, a property in Hampshire which he intends to turn into a “luxurious wellness retreat”.
Of the remaining money, £100mn will be for the Leconfield’s fit-out and the rest for working capital and contingency.
In return for their fee, the founding members will each own part of a loan that is due for repayment in seven years, is secured on assets worth £450mn and pays an interest rate of 5 per cent, according to the promotional material.
They will also receive a £500,000 perpetual debenture that “could be passed on to heirs”.
Tchenguiz has long overseen his property and business empire from Leconfield House, which was once searched by the Serious Fraud Office as part of a botched criminal probe, for which he was ultimately awarded £1.5mn in damages, £15mn in legal fees, and received an apology from the director of the SFO.
Land Registry filings show that, as of 2023, Leconfield House’s mortgage has been owed to Motcomb Estates Limited, a company that manages the Reuben brothers’ property investments.
David and Simon Reuben’s portfolio spans hotels, residences and retail across the UK, Europe and the US. They own a minority stake in Premier League football club Newcastle United, the Burlington Arcade in Mayfair and the Baglioni Hotel Luna in Venice.
The brothers, who originally made their fortune in Russia’s metals markets in the 1990s, have supplied Tchenguiz with debt in recent years secured on a number of his assets, according to the people familiar with the matter.
Recently this included refinancing Tchenguiz’s Leconfield House mortgage, replacing a previous mortgage in 2023.
The Reuben brothers declined to comment.
The Leconfield, which is aiming to have more than 14,000 members, will feature AI to facilitate deals between members by deducing who should work with whom.
According to the promotional video, the club will have restaurants, a wellness suite run by the Mayo Clinic hospital chain and acoustically sealed pods for business meetings.
Prospective members have been sent a hefty black box which opens to reveal a screen playing a video featuring Truss on how to make a pitch. One person targeted for membership told the FT: “They have called me so many times.”