It has paid off handsomely for him, and his political antennae are not too shabby, either. A donor to the Scottish Conservative party and a big fan of its leader Ruth Davidson, his prediction of the scale of the losses of the governing SNP party at Holyrood when we meet the day before the recent general election was right on the money.
“Yes, I think it will be substantial, there will be quite a big rollback,” Locke says. “Who would have thought it would come down to a binary choice for voters between the SNP and the Tories?
“The SNP have 56 seats at the moment. I think that could come down to the low 40s. It would be a good day [for the Conservatives] if it was under 40.” The rest is history: the SNP came out of the election with 35 seats.
His political instincts also proved sound on US President Donald Trump. After talking to an acquaintance, a former adviser to President Bush, who told him why the Donald would win the election because of his appeal to the alienated classes, Locke bet both on the maverick politician winning the Republican ticket and the presidency at odds varying from 12/1 to 25/1.
The Scot’s gains were “into five figures”, loose change for him but “a fun bet” – and a man whose background suggests a strong contrarian streak probably likes to keep his hand in.
Last March, Locke was in the headlines for an altogether greater amount. The largest shareholder in Argenta, the Lloyds Managing Agent, he sold the business to Hanover Re for £142.5 million, making a tidy sum for both himself and the agent’s employees. The sale was at a multiple of 2.7 times net assets, the previous record being 2.4 times for Amlin.
It was far from a one-off. Back in 2008 Locke sold the Aberdeen-based oil and gas services business Abbott Group that he had built up from 1990 for $1.4 billion (£906m) to First Reserve. As he did with Abbott, Locke invested in Argenta with a long-term perspective. He took a small stake in 2003 as part of a small capital-raising exercise when the business had structural problems. But a much bigger full-blown rescue was required, with him taking a majority stake and full charge, after a disastrous underwriting performance in 2005 when Hurricane Rita struck.
The senior management team, who he said had not followed underwriting instructions and were taking on too much risk in a bid to boost returns, were ejected and bank debt was renegotiated.
“Argenta owed a lot of money to Royal Bank of Scotland who were about to pull the plug. I had close relations with RBS through Abbott and said to them if they pulled the plug they would get nothing back, but if they gave me a chance I would turn it round. They got their money back, about £7m to £10m,” Locke recalls.
The staff have also done well out of the sale, the boss having set up a trust for them and put 25 per cent of the shares of the company into it.
“The business had bust itself twice in five years, you have to retain good people and motivate them. Also, it is not exactly an underpaid industry, the insurance world,” he adds, wryly.
A key philosophy of his is that it is not all about the pursuit of vertiginous returns but steady, reliable income. “Don’t get excitable. Insurance is a cyclical business. I don’t mind if the financial return is just 1 per cent. At least that’s not negative. Look for an average return over the cycle,” Locke says. His management style, he adds, is to be hands-on in terms of the strategic direction of his investments but non-interfering in the day-to-day operational running of the businesses.
He started his career in banking in the 1970s with Citibank, Oceanic Finance Corporation and Henry Ansbacher, and said he learnt that “American investment banks will train you but you work long hours”. Through those connections, particularly Oceanic, he got involved in ship financing and developed an increasing interest in the energy industry in general and the North Sea in particular.
But he is clear about his area of expertise. “I’m not an exploration and production man. I don’t know about stuff under the ground. My expertise is oil and gas services.”
Locke formed his first business at the age of 28 in 1981, a Singapore-based shipping services operation, moving on in the late 1980s to become deputy chairman and chief executive of Kelt Energy.
He subsequently formed Abbott Group to invest in the shipping and offshore industries, putting together financing packages for ships and oil rigs and taking equity stakes “to build my empire, if you like”. As part of this, he acquired the struggling Norwegian company KCA Drilling Limited in 1992, which was then a quoted company, and took it private. He told the banks they would not get their money back if they foreclosed. And he kept the Scottish base of the company, but closed offices in London and Reading “that were really for the convenience of the directors”.
Locke refloated the enlarged Abbot Group by way of a reverse into a cash shell three years later. From the early 1990s recession, the oil majors had been outsourcing platform drilling work, and Locke wanted to ride the wave of the “crisis”.
He said oil and gas services was “a fragmented market that was ripe for consolidation, and my strategy was to be the consolidator. We were also the only British-owned contractors and tried to play the patriotic card, not with particular success.”
Among his main current interests are his Motor Fuel Group (MFG) business, which operates hundreds of petrol station forecourts across the UK under the brand names of the big oil players. He is also chairman of India-focused Hardy Oil & Gas, and has an 8 per cent stake in a shipping business that specialises in carrying cars.
But it looks like Locke has other fish to fry. Against the backcloth of an oil price now of about $50 a barrel compared with more than $100 in 2014, he thinks there may be opportunities in oil facility decommissioning. “I’m looking at something. I hope it will be in decommissioning of oil facilities. It’s an interesting sector, it’s every bit as big as nuclear decommissioning.” Asked when his plans might come to fruition, he says a few months.
In the wider sense, he does not see any early recovery in the depressed oil price. Locke says: “It’s almost impossible to predict the price of oil. I hesitate to be too dogmatic because I will be wrong. The oil industry never goes in a gentle line. It was relatively obvious that the price of over $100 was too high and was going to come down. I see no reason at present that it will go up [markedly]. In the absence of geo-political shocks it looks as if the price will be range-bound for a time. We would have to see a big increase in demand which I don’t think we are going to get.”
Keenly political, he is a big fan of Ruth Davidson – “she’s very real. Her instincts about where she wants to lead the Tory party chime with mine”. Locke says he is a Remainer on the EU membership question, but unlike many business people not necessarily first and foremost for the economic arguments. “People probably think I’m a right-wing Tory, but I’m actually a woolly liberal centrist. Despite all its faults the EU has been a force for good,” he says. “It’s stopped people in the Balkans being at each other’s throats. Economically speaking, you can make a case both whether it’s better to be in or out.”
He is also not diplomatic about the bloody nose Nicola Sturgeon’s SNP got in the General Election, even if it has been overshadowed by the evisceration of Theresa May.
“The SNP are appalling administrators. They have proved that. In my youth Scottish education was better than its English equivalent. It has not been for quite some time.”