SIR BRIAN Souter is eyeing a range of new investments of up to £30 million each after building a “sizeable” war chest during the economic downturn.
The Stagecoach co-founder said he had benefited from having access to capital “when many investors were avoiding risk”.
A newly published review for his Souter Investments vehicle reveals a record performance over the three years to the end of March, with an annual return averaging 21 per cent per annum.
Over the six years since its inception, the investment portfolio – understood to total some £700m – has increased in value by 159 per cent with returns of 18 per cent per annum.
Souter Investments typically targets transport-related businesses, including operators in Poland and New Zealand, but also holds stakes in financial services, telecoms and recycling companies. Its investee businesses boast a combined turnover of £1.8 billion and employ about 10,000 staff.
During 2013, Souter is estimated to have netted more than £100m from three major deals alone – the sale of a stake in yacht maker Sunseeker International to Beijing-based Dalian Wanda Group, the flotation of insurance group Esure and the sale of Motherwell-based Argent Energy.
The precise scope of the war chest was not disclosed in the latest investment review.
Souter, who founded Stagecoach with his sister, Ann Gloag, in the early 1980s, said: “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.
“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.”
He added: “We are confident that Souter Investments will continue to invest in successful companies, however replicating the returns achieved in the last three to six years will be a significant challenge.”
Souter’s family investment vehicle also retains a core holding in Stagecoach Group, where its co-founder is the chairman. Returns from the Perth-based transport giant were described as “very strong” at 11 per cent per annum over six years.
During the same period, Souter Investments made eight private equity investments in the transport sector and acquired nine stakes in firms operating in other areas. Recent investments include Irish book publisher CJ Fallon and Winn Solicitors, which specialises in road accident claims management.
It has also supported the growth plans of portfolio companies Alexander Dennis, the Falkirk-based bus builder, and Virgin Mobile Latin America.
Earlier this year, Souter Investments pumped £10m into new coaches for Polish bus company, PolskiBus.com. Launched two years ago with 18 vehicles, the operation is set to be running 92 coaches by the end of the year linking cities across Poland.
Andy Macfie, managing director of Souter Investments, said: “Over the last six years we have generated an exceptional performance, outperforming both 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.”
The Souter Charitable Trust has also benefited from the solid investment returns. During the six-year period reported, the trust – funded solely by Sir Brian and Lady Souter – has donated more than £45m to good causes.