Putting the case for the long game
As Martin Gilbert approached the 18th green at Kingsbarns without a club in his hand he wore an expression that suggested he would not be in the mood for talking.
A keen golfer, the man who’d recently helped pull together the biggest ever merger of two Scottish companies looked a little unhappy as his second round didn’t produce the score he had been hoping for.
As he emerged from the recorder’s office, arranging to meet his caddie the following morning and checking his mobile phone, I was left wondering if he’d do a ‘Monty’ and slip away, ignoring any interview requests and a chance to catch up on the progress of his new venture.
Nothing could have been further from the truth, however, and despite this being the first time we had met, he was only too happy to delay his return to the warmth of the clubhouse to stop and chat.
So how was it playing with some of the top stars on the Tour?
“The first time I played was with Paul Lawrie when he won (in 2001) and I was really nervous but now you realise you just get on with it and try not to get in their way,” he said.
“The professionals are so steady that the amateur very rarely comes in for the team score.
“You’re just walking round and basically trying to keep out of the way!”
The former head of Aberdeen Asset Management, now co-CEO of the newly-formed Standard Life Aberdeen, has been a key supporter of Scottish golf. This year’s Dunhill appearance maintained his record of having played in the tournament every year since the inaugural 2001 event won by fellow-Aberdonian Lawrie.
“What you learn from these guys is the ability to cope with pressure,” he said.
“Watching them get in and out of the zone is quite interesting. They are really good at relaxing between shots and not letting bad shots get to them.”
The unique format of the Dunhill Links Championship sees it played over the Old Course, Kingsbarns and Carnoustie.
While the Gilbert/Marc Warren combination didn’t make the cut for the last round, Sunday’s finale at St Andrews saw Warren finish joint fourth in the individual competition behind Tyrrell Hatton, who completed an historic defence of his title.
In a year which has been dominated by the £11 billion tie-up between Aberdeen Asset Management and Standard Life, the golf course offers a welcome escape from the pressures of business for the man who helped set up Aberdeen in 1983.
“They are great guys to play with and playing with someone of the calibre of Marc Warren was a huge privilege,” he says.
It is also a world away from the dark days of the split capital trust meltdown at the turn of the century, a mis-selling scandal which could have cost him his job and seen his company go out of business. Its value plummeted to about £50m and the scandal left tens of thousands of investors out of pocket to the tune of £650 million. The investigation that followed was the biggest carried out by the Financial Services Authority.
‘Charm is his weapon of choice’
Another low point was appearing before the Treasury Select Committee, chaired by John McFall. “I thought I’d get an easy time from him because he was Scottish,” said Gilbert at the time. “The first clue I had that I was wrong was when I asked if I could take my jacket off and he said he’d rather I kept it on.” McFall went on to brand him a “sophisticated snake oil salesman”.
He said the company learned a few lessons from the split cap experience. One was not to create highly geared products. “No matter how much you say you’ve stress-tested them, they will fail when the downturn comes,” he said.
Gilbert, described by one commentator as a businessman for whom “charm is his weapon of choice”, survived and rebuilt the company into one of Europe’s biggest independent fund managers.
It has been a journey paved with opportunities and obstacles. In 2005 he audaciously bought Deutsche Bank’s investment management division, adding £30bn in assets to Aberdeen and elevating the company to the top of the British fund management league.
Credit Suisse and Scottish Widows Investment Partnership were his next targets, taking assets to a whopping £325bn.
But Gilbert also suffered the embarrassment of a significant shareholder rebellion over his pay and bonus for 2010, with almost a third of investors refusing to back his rewards. The company suffered a further backlash when investor pessimism turned against emerging Asia markets. When Gilbert and his board saw fee income falling they knew it was time for a change of direction, which is when Standard Life came calling.
Reflecting on the partnership, which was rubber-stamped in August, he says he is delighted with the pace of the transition.
“Everyone is settling down and it is probably going better than I expected,” he says.
Around 800 jobs from a combined workforce of 9,000 are thought to be at risk over the next three years following the merger and Mr Gilbert stressed the company is trying hard to provide as much clarity as quickly as possible.
‘The competition is pretty fierce in our business’
“What most people want in a merger such as this is certainty and they want to know what their role is going forward,” he says. “Our aim is to give them certainty as soon as possible
“The three-year time horizon is very much about what I would call the systems work, making the two companies’ systems talk to each other. There is a lot of what I would call the plumbing and wiring and it takes a long time before that’s done.”
As part of the merger, around 500 staff have been relocated to newly-built offices in St Andrew Square in the capital and Gilbert says: “It is going better than any of us expected. I think things will settle down quickly.
“The great thing about the merger is that it has created a real Scottish world-class investment company.”
Assessing the shared chief executive duties with the former boss of Standard Life, Keith Skeoch, Gilbert says the set-up is working well.
“Keith and I have very complementary skills. He is a lot better than me at things such as asset allocation and global economics. He’s a great guy to work with and we get on very well.”
He added: “There is a lot of talk in the world of asset management that you either want to be big or small.
“We will be $800 billion assets under administration, so we’re getting up there. We’re maybe the largest independent outside the US, but there are still a lot of US companies who are far bigger than us.
“The competition is pretty fierce in our business. What we want to do is do a good job for our clients. The merger of two complementary businesses will give us the opportunity, I think, to do that.
Standard Life Investments has traditionally been viewed on the performance of its flagship GARS fund, which has slipped recently, and Aberdeen on emerging markets. Gilbert says this perception needs to change.
“We have an opportunity to strike into other areas and be more balanced,” he says, although the markets expect Asia-Pacific to remain a key target, with India and Singapore likely to be priorities. There will also be strong representation in Hong Kong and China, and in Australia.
He says Aberdeen survived largely by having the same five people at the top for 25 years. He once said he’d only retire after Sir Alex Ferguson retired, but with the former Aberdeen FC hero long gone from Old Trafford Gilbert has shown no sign of following him.
Additional reporting by Terry Murden
Residence: Aberdeen and London
Educated at school and university in Aberdeen, He was in the same year of law school at the University of Aberdeen as former Labour chancellor Alistair Darling.
Other honours: received an honorary doctorate from Heriot-Watt University in 2014 and was elected a fellow of the Royal Society of Edinburgh in 2017
Career highlights: Co-founder of Aberdeen Asset Management in 1983; sat on the boards of FirstGroup (chairman) and Sky (deputy chairman).
Fishing, sailing and, of course, golf