Perth transport tycoon Sir Brian Souter has hailed his family investment vehicle’s “exceptional returns” following an 84% increase in the value of its portfolio over the three years to March.
The Stagecoach founder said annual returns of more than 20% came as Souter Investments “held its nerve” through the recession, and used its ready access to capital to back some “brave decisions”.
But he said the economic recovery meant good value deals at low multiples were harder to come by, and warned that replicating recent performance was bound to prove challenging.
Souter Investments will now seek opportunities of between £2 million and £30m for its “sizeable” war chest.
Over the last 12 months, the firm has successfully exited from insurer eSure though it retained a much-reduced stake on the group’s float on the stock market and luxury yachtmaker Sunseeker, following its sale to China’s Dalian Wanda Group for £320m in June.
Other disposals included the cashing-in of interests at Motherwell biofuel firm Argent Energy and communications specialist Wireless Infrastructure Group, with receipts across the piece thought to have topped £100m.
A core holding in Stagecoach returned an average of 11% per annum over the last six years, Souter Investments said, while the group has also diversified its portfolio alongside a focus on transport.
The Souter Charitable Trust has been a major beneficiary of the investment success, with Sir Brian and his wife funding the donation of £23m to good causes in the UK and overseas during the last three years.
In all, grants from the trust have now reached a total of £45m.
“We held our nerve throughout the recession, took some brave decisions, invested through the cycle and benefited from having access to capital when many investors were avoiding risk,” Sir Brian said of Souter Investments’ performance. “As the financial situation improves it will be more difficult for us to find deals priced at the low multiples we paid during the depths of the recession.
“To counter this, we are now seeking and finding a substantial increase in deal flow and we have a sizeable war chest to invest in the right opportunities.
“Looking forward we are confident that Souter Investments will continue to invest in successful companies, however replicating the returns achieved in the last three and six years will be a significant challenge.”
Souter Investments has active interests in companies with a combined turnover of £1.8bn, employing some 10,000 worldwide.
They include firms in Poland, Australia, Turkey, New Zealand and Latin America, as well as UK names like Falkirk bus-builder Alexander Dennis and Fife-based legal and property search firm First Scottish.
Foreign firms supported include Istanbul ferry operator IDO and Polish intercity transport group PolskiBus.com, while investments since March include Irish textbook publisher CJ Fallon and road accident claim manager Winn Solicitors.
Regulatory approval for a new stake in pension fund administration platform Investment Solutions is anticipated shortly.
Souter Investments managing director Andy Macfie said the group had outperformed the UK and US stock markets and most private equity funds.
“We have acquired some attractive assets which are well placed to continue to grow strongly in the years to come,” he added.