Brian Sutter has built one of the world’s largest transport fortunes over the past four decades through Stagecoach, a UK bus operator, which he and his family started with a pair of used vehicles.
Now, buoyed by proceeds from last year’s takeover battle, Souter’s personal investment firm has embarked on a major deal spree, shifting his wealth away from the industry that defined his career.
The Sutter family office of the same name announced seven This year’s investments are in British and Irish companies, including the energy, construction and engineering sectors.
This month, it agreed to acquire British metals solutions company Premier Hytemp in its latest bet, with terms of the deal not disclosed. Even with the global slowdown in dealmaking, the company plans to continue allocating part of the £595 million ($743 million) that Deutsche Bank AG’s DWS Infrastructure paid last year to acquire Stagecoach in an all-cash deal.
“Getting out has given us more firepower,” Calum Cositer, managing director of Souter Investments, said in an interview. “We are definitely not in the risk-averse camp.”
Sutter’s company has net assets of about £400 million, according to filings published last week, accounting for the bulk of his wealth, as well as making it one of the largest family offices of a British businessman in the UK.
The Edinburgh-based firm has closed more than 50 deals since its inception in 2006, often focusing on existing companies under the radar of larger private equity firms. Souter Investments typically makes between 5 and 10 investments a year between £2m and £30m, putting 2023 on track to be one of its busiest 12-month periods.
Sutter, 69, and his sister Anne Gallage, 80, a fellow Stagecoach founder, earned a total of about £120 million through the takeover of DWS, which thwarted a merger with rival National Express, according to data compiled by Bloomberg. Filings show that about £25 million of the deal went separately to Sutter’s foundation of the same name, which oversees more than £100 million of investments.
“We could probably write bigger checks,” said Kositer, who declined to comment on Sutter’s wealth. “But we recognize the need to diversify.”
Sutter, a former accountant for Arthur Andersen, founded Stagecoach with his sister in 1980 when Margaret Thatcher’s Conservative government began deregulating the UK’s coach industry. These changes helped Souter expand by acquiring competitors while maintaining a focus on affordability.
The British businessman, whose father was a bus driver, helped lead the Perth, Scotland-based company’s operations until 2019, when he resigned as chairman after previously serving as CEO.
By then, the company’s revenues had risen more than 650%, with Sutter pocketing at least £200 million in dividends and stock buybacks, according to data compiled by Bloomberg. DWS’s bid to buy Stagecoach for 105 pence a share valued the company at about 350% above its initial public offering price in London about three decades ago.
Sutter previously shared a family office with his sister, but the couple separated due to different priorities in managing their money. Since then, his family office has focused on buying stakes in companies directly on its own or alongside mid-sized private equity firms rather than buying large stakes.
Of the nearly three dozen prior investments listed on the Souter Investments website, the firm has had a representative on about half of the companies’ boards. He has held many of them for more than a decade, beyond the typical time frame of a private equity fund.
“We tend to ask questions and participate,” Kositer said. “Giving money to a fund is absolutely valid as a strategy. It’s just not how we do it.”
The family office’s successful bets include investing alongside Buckthorn Partners for a stake in industrial equipment company Ashtead Technology. The company listed in London in 2021 and saw its shares more than double before the exit of the Sutter family office in May.
It also invested in the management buyout of Esure in 2010 and exited three years later when the British insurer listed at a valuation of about 350% higher. The family office also doubled its money by helping take bus manufacturer Alexander Dennis out of administration in 2004 before exiting during 2019 when it was acquired by rival manufacturer NFI Group Inc. For 320 million pounds sterling.
However, not all family office investments are huge successes. Fullers360, one of New Zealand’s largest ferry operators which was bought by Souter Investments in 2009, has reported losses over its past three financial years. The Turkish transport company also sold IDO in 2020 after it ran into debt problems.
“We don’t pretend that everything we touch turns to gold,” Kositer said.
Cusiter, 43, joined Souter Investments shortly after its founding with fellow managing director John Berthinussen, making them two of the longest-serving employees among the family office’s staff of about a dozen.
Koster said the company is monitoring the situation in Israel and Gaza for any broader macroeconomic impacts, but has no plans to stop making deals.
“We are still looking to spread,” he added.