Interview: Mike Rutterford - Braving sharks and economic tsunamis

Published on Wednesday 11 November 2009 10:38

MIKE Rutterford has ridden choppy seas before – although he admits he has seen nothing like the squall facing the economy now in all his years of doing business.

Recently, the multi-millionaire Rutterford, 62, a well known face in Edinburgh due to his various business ventures through out the years, was sailing his yacht in the balmy South Pacific. The yacht was a treat to himself after he sold a company, Solcom Systems, in the 1990s – one of several he has flogged for a tidy profit over the course of his career.

The first time he heard of the approaching tsunami following the Samoa earthquake was a text message from Scotland. He had an hour and 20 minutes notice before the big waves hit.

"A tsunami moves faster than a jumbo jet," notes Rutterford. Yet he reckons it was better being on a boat on a seismic ocean than in Edinburgh this year.

"It has been an impeccably good year to go sailing," he adds dryly.

Yet before he sets sail again, Rutterford is in Edinburgh to celebrate a small success. After completing a refurbishment of an office building he picked up as a bargain in 2001, against all odds the office is now fully let and well ahead of schedule.

He is gracious about the team in place that got the project off the ground, and he has been wining and dining both his property agents and the new tenants.

He is also gracious about the fact that a stone's throw from his little success is one of the biggest white elephants in the Edinburgh property market, Waverley Gate, whose owners went into receivership earlier this year after only one tenant moved in to an office on the top floor.

He insists the difference between the two was ensuring there was local touch.

"Because we were local we could make a decision on the spot," says Rutterford (pictured), who took calls on individual tenant requirements as he sailed through the Panama Canal.

"It meant we have so much more flexibility than Waverley Gate had. I am not going to criticise the competition, but I am quite thankful they were less flexible."

Rutterford, who co-founded one of Scotland's first angel investor syndicates, Archangel Informal Investments, made his first fortune in property. In 1977 he started an estate agency, Stewart Wyse Ogilvie, with a 6,000 investment and sold it ten years later for 16m. Since then he has had his hand in a number of deals.

Perhaps the most interesting of these was in 1996 when he acquired a 3.2 acre bus depot in the Waverley Valley. In a choice location right next to the train station, he set up a car park that made money hand over fist. This funded an initial masterplan for a 100m redevelopment of the site.

When those plans failed to pass muster with Edinburgh City Council in 2000, he sold it on to a Dutch property specialist fund – who in turn sold it to a company called Mountgrange, whose plans for the site came to nought when it went into administration this year too.

Does Rutterford fancy buying the site back?

"Only if the price is right," he says gruffly.

But the property industry stalwart has been avoiding the market for a number of years when prices seemed too high.

"I am a bottom feeder. I like the old fashioned approach to property investment where the rent you are charging will service the whole plus give you a margin.

"I couldn't get my head around the high prices being paid."

And he is expecting the market to move his way again – soon: "There will be opportunities coming out of the woodwork that will be of interest to us."

When he founded the Archangels along with his business partner Barry Sealey, it was more about offering his experience – and money – to new companies, many in exciting new fields like life sciences, optoelectronics and medical devices.

Several of these, such as Optos and bionic limb company Touch Bionics, are "going great guns".

"These are challenging times for small businesses," admits Rutterford. "Prudent, normal projections are difficult to call now because finance directors are embargoing spend. Therefore the world doesn't turn – people aren't buying product, you can't sell and you need to refund. The works are gummed up in commerce generally."

But while he maintains optimism that the companies he invests in will lead Scotland out of its industrial gloom, he knows it won't come easy.

Just a few weeks ago, Rutterford was swimming with about 30 to 40 black tip and white tip sharks in French Polynesia.

"As long as you are not bleeding, it is not dangerous. I am quite used to that at home," he quipped.

But for small companies bleeding might be inevitable.

"These days the companies that will survive longest are the ones that cut the deepest and quickest and get their runway long enough so they can get out. The ones that cut too slow, they won't move on. You have got to be pretty tough these days."