Market-beating returns for Sir Brian Souter's family investment vehicle
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Releasing its latest investment review, Edinburgh-based Souter Investments pointed to a strong performance from its core private equity portfolio, which generated a 26 per cent annualised return across nearly 30 realised deals. The current portfolio is centred on companies spanning sectors including industrials, financial services, business services, telecoms media and technology (TMT), consumer, healthcare, energy and education. Two thirds of the firms sell business to business.
Sir Brian said: “Our total portfolio increased in value by 8 per cent per annum over the 15 years ended March 31,2022. This is stated after tax, all running costs and adjusting for charitable donations, and compares against a 5 per cent annual return on UK quoted equities including dividends over the same period. Although this may not sound like much of a difference, the compounding effect of our performance means that our portfolio is now 270 per cent higher in value than it would have been if we had invested solely in the UK stock market.”
Sir Brian founded Stagecoach in 1980 along with his sister, Ann Gloag, building it from a single bus route to a global transport operator. Since its formation in 2006, Souter Investments has invested more than £500 million in about 70 unquoted companies, either as the lead investor or as a partner for other financial sponsors.
Souter Investments’ co-managing director, Calum Cusiter, said: “Sir Brian’s vision for Souter Investments was to create an entrepreneurial family investment office, which would be resilient to economic downturns, generate healthy returns over the long-term and fund charitable donations. Since 2006 we have pursued those objectives by building a diversified portfolio and retaining an opportunistic and flexible investment approach. Our overall strategy of focusing on private equity investments remains the same today as it did over 15 years ago.”
The office has been particularly active over the last three years, adding nearly 20 new private companies to its portfolio. It has also successfully sold several companies, including Stone Technologies Group.