Exclusive: firm may float
IPO an option for bus builder Alexander Dennis
Commenting on speculation about the firm’s future, the entrepreneur told Daily Business that there were a number of options, but he said there was no substance to recent reports that it was being targeted by the Chinese.
“I don’t know whether it is going to be sold. It’s a good business. I’m not sure what they will do with it.
“Long term there are possibilities. It could be an IPO [initial public offering].
“There is no substance to the Chinese interest. Sometimes you get approached but there is no activity. They are focused on growing exports.”
His comments came ahead of new figures for Souter Investments, the family investment office.
Sir Brian revealed that the vehicle now accounts for two thirds of his personal net worth via its investment in a range of businesses, including transport operations in Poland, Finland and Turkey.
It has generated a net return of 14% per annum since March 2007 compared to a 6% annual return on UK quoted equities over the same period.
Sir Brian said: “An annual return of 14% compared to 6% may not sound like much of a difference but the compounding effect over time means that our portfolio is 180% higher than it would have been had we invested in the UK stock market.”
Souter Investments’ strategy has been to:
Retain a core holding in Stagecoach Group plc where Sir Brian is co-founder and Chairman.
Build a diversified portfolio, targeting direct private equity investments.
Maintain an opportunistic approach to investment opportunities.
Unquoted investments have increased from 5% to 45% of the total portfolio over the nine year period to 31 March 2016.
Sir Brian said: “I am proud of what we have achieved at Souter Investments over the last decade, especially in light of the macro-economic backdrop and difficult investment climate.
“We are now one of the most active private equity houses based in Scotland, and certainly one of the most active overseas.
“The portfolio is in a healthy state and I am confident we will continue to see many interesting investment opportunities in the future and generate superior returns.”
Andy Macfie, managing director, said: “When we launched Souter Investments in December 2006, our vision was to create a professional but entrepreneurial family investment office with the objective of creating an investment portfolio that would be resilient to economic downturns.
“We are pleased to have achieved this objective which is particularly encouraging given how difficult the economic and investment environment has been.”
Over the three year period to 31 March 2016, Souter Investments made 15 substantial private equity investments in a number of sectors including health care, consumer goods, oil & gas, financial services and industrials.
In addition, four investments were completed in the transport sector. Its recent investments include Baywater Healthcare, Clive Christian, Mobius Life, Daisy Telecom and Ashtead Technology.
Its portfolio of unquoted companies have a combined turnover of £2 billion and employ around 19,000 people.
The Souter Charitable Trust has been a major beneficiary of Souter Investments’ performance. During the ten-year period to June 2016, the Souter Charitable Trust awarded more than 10,000 grants totalling £73m, to projects aimed at relieving human suffering both in the UK and overseas.