Souter Investments, which owns stakes in Fife bus-builder Alexander Dennis and Edinburgh-based luxury homes firm AMA, revealed it has generated a net return of 14 per cent a year since March 2007, compared to a 6 per cent return on UK quoted equities over the same period.
Souter said the effect of compounding over the years means the portfolio is worth 180 per cent more than if the money had been invested in the UK stock market. The fund now includes 120 investments worth a total of £334 million.
Souter said that the fund’s strategy of retaining a core holding in Stagecoach as well as private company investments and an “opportunistic approach” had been behind the outperformance.
The Stagecoach co-founder said: “I am proud of what we have achieved at Souter Investments over the last decade, especially in light of the macro-economic backdrop and difficult investment climate.
“We are now one of the most active private equity houses based in Scotland, and certainly one of the most active overseas. The portfolio is in a healthy state and I am confident we will continue to see many interesting investment opportunities in the future and generate superior returns.”
Andy Macfie, managing director of Souter Investments, which has offices in Perth and Edinburgh, said: “When we launched Souter Investments, our vision was to create a professional but entrepreneurial family investment office with the objective of creating an investment portfolio that would be resilient to economic downturns.
“We are pleased to have achieved this objective which is particularly encouraging given how difficult the economic and investment environment has been.”
Over the three-year period to 31 March 2016, Souter Investments made 15 significant private equity investments in a number of sectors including health care, consumer goods, oil and gas, financial services and industrials. In addition, four investments were completed in the transport sector. Its recent investments include Baywater Healthcare, Clive Christian, Mobius Life, Daisy Telecom and Ashtead Technology.
Its portfolio of unquoted companies, based in the UK, Finland, Latin America, Poland, New Zealand and Turkey, has a combined turnover of £2 billion and employs around 19,000 people. Its unquoted investments have increased from 5 per cent to 45 per cent of the total portfolio over the past nine years. The Souter Charitable Trust is a major beneficiary of Souter Investments.
In the past ten years it has awarded more than 10,000 grants totalling some £73m.