Real estate developer funds MBA fellowships and prize
David S. Ng, BS/BA 70 (Business, Math.), MBA 72, PhD 75, credits his four Cal degrees with training him to think independently, act with conviction, and learn new fields of business—skills he used to change career paths and thrive in new industries. After five years as an assistant professor teaching accounting at Stanford, Ng left academia to do real estate development and investing. The equity investing he does with hedge fund techniques typically achieves a 20 percent minimum annual return. He’s the owner and/or general partner of residential developments including apartments, condos, subdivisions, high-end homes (including his own, pictured), and commercial properties in California and Hong Kong. He oversees every aspect of a development—he’s had his general contractor’s license since 1986 and owns a construction company.
Recently, Ng gave nearly $1.5 million to fund two annual $110,000 David S. Ng Fellowships—one each for a U.S. and an international full-time MBA student—as well as a Dean’s Special Prize aimed at keeping Haas more competitive with peer institutions.
I can control the quality and costs better if I am vertically integrated, from land acquisition to development to construction to sales. I have a better handle when I bid on projects and when I acquire property because I’m able to figure out the costs with more precision. It also helps to know the construction trade and procedures. Often you can interact with architects and engineers and together perform value engineering in construction details.
I love it when the real estate market is down. The valuation is much more reasonable. At a downturn, a lot of banks will turn off the faucet. If you have sufficient resources and you don’t have to rely on the bank, you can get the best properties other people cannot get. The real estate market goes in cycles, and it’s important to know where we are in a particular cycle. I have avoided chasing development projects prior to downturns. As a result, I wasn’t burdened by a lot of inventory when the crisis hit.
I believe the best investment is an investment in human capital. Hopefully, the fellowships will, in a small way, nurture a crop of future governmental, economic, and business leaders. I like what billionaire philanthropist Li Ka-shing said about his everyday aim: “Build up self in pursuit of selflessness.” This resembles our Berkeley Haas Defining Principle of Beyond Yourself. One remembers one’s social responsibilities in giving to worthwhile causes.
We are living in a world that is globally interconnected. We need to be aware of political, economic, and technological developments in our own country as well as in others. We also have to ask ourselves how these developments would affect our trade, our business, and our business outlook. Often, I see people who focus only on day-to-day work. As a CEO, you need to have a much broader vision.