Above-market returns for Sir Brian Souter’s family investment vehicle

The family investment office of Stagecoach Group co-founder Sir Brian Souter has highlighted the diversified nature of his portfolio after reporting annual returns above the market.

Publishing its latest investment review, based in Edinburgh Underground Investments highlighted a strong performance from its core private equity portfolio, which generated a 26% annualized return on nearly 30 completed transactions. The current portfolio is centered on companies covering sectors such as industrials, financial services, business services, media and telecommunications technology (TMT), consumer, healthcare, energy and education . Two-thirds of companies sell between companies.

Sir Brian said: “The total value of our portfolio has grown by 8% per annum over the 15 years ending March 31, 2022. This is shown after tax, all running costs and adjustment for charitable donations, and compares to a 5% annual return on UK-listed shares, including dividends, over the same period. Although this may not seem like a big difference, the cumulative effect of our performance means that our portfolio is now 270% higher in value than it would have been had we invested in the UK stock market alone.

Sir Brian founded Diligence in 1980 with his sister, Ann Gloag, transforming it from a single bus line into a global transportation operator. Since its inception in 2006, Souter Investments has invested over £500 million in approximately 70 unlisted companies, either as a lead investor or as a partner to other financial sponsors.

Co-Chief Executive of Souter Investments, Calum Cusiter, said: “Sir Brian’s vision for Souter Investments was to create an entrepreneurial, family-owned investment office that would be resilient to economic downturns, generate healthy long-term returns and fund charitable donations. Since 2006, we have pursued these objectives by building a diversified portfolio and maintaining an opportunistic and flexible investment approach. Our overall strategy of focusing on private equity investments remains the same today as it did over 15 years ago.

The office has been particularly active over the past three years, adding nearly 20 new private companies to its portfolio. She also successfully sold several companies, including Stone Technologies Group.

Businessman and entrepreneur Sir Brian Souter is the co-founder of transport operator Stagecoach.
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