Stagecoach boss hails performance of Souter Investments private equity fund

The private equity business run by Scottish transport tycoon Sir Brian Souter has generated an annual return of 14 per cent since he established it a decade ago.

The return compares with the 6 per cent achieved annually from shares held in UK stock market listed companies since 2006, an out-performance for the business which Sir Brian claims makes it one of the most active such enterprises in Scotland.

Established by using the wealth he amassed after founding Stagecoach with his sister Ann Gloag, Sir Brian’s Souter Investments has retained a core holding in the Perth-based transport business, controlling around 14 per cent of its shares worth around £173 million.

Souter Investments made its first investments shortly before the credit crunch and Sir Brian said: “An annual return of 14 per cent compared to six per cent may not sound like much of a difference but the compounding effect over time means that our portfolio is 180 per cent higher than it would have been had we invested in the UK stock market.”

He added: “We are now one of the most active private equity houses based in Scotland, and certainly one of the most active overseas.”

The Scottish firms in the portfolio include Falkirk bus builder Alexander Dennis which was bought out of administration in 2004 for £90m by Sir Brian and Ms Gloag, former Rangers owner Sir David Murray and merchant banker Sir Angus Grossart.

Successful exits have included the sale of a stake in esure when the insurance firm floated in 2013.

The business has has invested around £250 million in its portfolio of 30 unquoted firms, which include transport operations in Poland and New Zealand.

Commenting on the impact of Brexit on the firm’s activities, managing director Andy Macfie said: “It’s difficult to predict the impact on individual companies but it could look to increase our appetite to invest in the UK.”

The firm said that the Souter Charitable Trust has been a major beneficiary of Souter Investments’ performance. During the ten-year period to June 2016, the Trust was awarded more than 10,000 grants totalling £73 million, to projects aimed at relieving human suffering both in the UK and overseas.