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The Virgin Group

in 2012*

At the beginning of 2012, Richard Branson was 61 years old and his Virgin group of

companies had been in business for 43 years. Yet neither Branson nor his business

activities showed much sign of flagging entrepreneurial vigor. In financial services,

Virgin Money was in the process of a major expansion of its UK retail presence through

acquiring bank branches being sold off by Northern Rock and Lloyds Group. In health

clubs, Virgin Active—boosted by its acquisition of rival Esporta—was expanding into

new markets in Asia and Latin America. In healthcare, Virgin was using its acquisition of

Assura to establish itself in primary healthcare services in the UK. In communication and

computing services, Virgin’s initiatives included wireless services in Latin America and

cloud computing services for corporate customers in the UK. In the travel business, Virgin

continued to be a pioneer: Virgin Galactic spaceship service was undergoing test flights

and selling seats at $200,000 each.

Yet despite Branson’s prominence as Britain’s best-known entrepreneur and one

of its richest individuals1—his Virgin group of companies remained a mystery to most

observers (and to many insiders as well). At the beginning of 2012, there were 228 Virgin

companies registered at Britain’s Companies House (68 of which were identified as

“removed” or “recently dissolved”). In addition, there were Virgin companies registered

in some 25 other countries. These companies were linked through a complex network

of parent-subsidiary relations involving a number of companies identified as “holding

companies”. For most of the Virgin companies the ultimate parent was identified as Virgin

Group Holdings Ltd. which was registered in the British Virgin Islands.

The complexity of Virgin’s legal and ownership structure meant that its financial

condition was opaque. Doubts had frequently been expressed about the overall financial

health of the group.2 Branson was...