Mountaineer Hamish Mair disregarded the army and academia en route to becoming head of private equity funds at F&C Asset Management. What drives him?
Words By Lauren Mills
You can imagine Hamish Mair hoofing it across the Scottish Highlands with barely a care in the world, stopping here and there to admire geographical features such as the towering ice cliffs of the northern corries or the region’s spectacular granite tors.
For Mair, one of the newest investors in August Equity’s latest fund, loves geography almost as much as he loves Scotland.
Mair left Aberdeen University with a first class honours degree in geography in the late 1980s. Although he toyed with the idea of becoming an academic, the lure of a lucrative career in the City was very strong in those heady days. Within weeks of graduating, the young Mair had signed up as a management trainee at Flemings investment bank in London.
“I’d considered going into a multinational or management consultancy, or joining the army,” he says. “But I decided the opening at Flemings was best suited to my aptitudes.” Two years later he was offered the opportunity to return to his native Edinburgh as an investment assistant at Martin Currie, a boutique investment management firm.
It was at Martin Currie that Mair developed an interest in private equity. “I enjoyed the fact you can see right into the inner workings of companies – more so than in the public markets,” he says. “And you get exposed to a wide range of companies in different sectors and different geographies. In the private equity market you also tend to build relationships with people over a long period of time, so you get to know them better.”
In June 2005, F&C Investments acquired Martin Currie’s private equity division and installed Mair, 39, as head of private equity funds at the renamed F&C Asset Management, based in Edinburgh. F&C Private Equity Trust became an investor in Kleinwort Capital Partners IV (KCP IV) when it bought part of Dresdner’s holding in the fund this January.
Mair’s relationship with the August Equity team had begun five years earlier. “I met them when I was working at Martin Currie and continued to track them and keep in touch – and they kept in touch with us,” he says. “When we moved to F&C Asset Management, there was a considerable increase in assets available. We were independently in touch with Dresdner – so we were in the reasonably strong position of knowing both the vendor and the manager of assets.”
When it purchased Dresdner’s holding, F&C Private Equity Trust took on a £15m commitment in KCP IV. The money invested to date represents 2-3% of the total assets managed by Mair. This will increase as August Equity draws down more funds.
So why then invest with August Equity? “August Equity has been investing in this market for a long time. It has a strong record, a strong team and a clear focus in terms of the sectors it is interested in,” says Mair.
It is clear, however, that he has established strong personal relationships with the team. “We have known Richard [Green] and Andrew [Hartley] a long time and, at the end of the day, you have to be able to trust the people you are backing and have a regard for their skills,” he says.
Whilst Mair acknowledges that there is a risk of over-paying for companies as competition increases, he plays down talk of a private equity bubble. “In the mid-market, pricing of deals is generally reasonable.”
Mair is also confident that August Equity is well placed to find exits for its investments. “Historically, the biggest form of exit was the trade sale,” he explains. “In 2005, the secondary buy-out was the most prevalent exit across most segments of private equity. With August Equity operating in the mid-market, there is a strong tier of larger companies they can sell to.
“It is not unusual for companies to go through two or three private equity houses before being sold to an industrial buyer or being floated on the stock market. So there is a healthy dynamic at the moment – and this illustrates the depth of the financial system in the UK.”
Mair’s arrival at F&C Asset Management has been followed by a series of senior management changes.
Chief financial officer Ian Paterson Brown is set to retire in May, the third senior departure in the past six months, while chief executive Howard Carter, who led Isis Asset Management into its 2004 merger with F&C Asset Management, has also left, replaced by Alain Grisay. Finally, Fernando Ribeiro was appointed head of investments after Tony Broccardo quit in November.
But Mair says the changes have “not really impacted adversely in any way”. He seems happier operating as part of a larger organisation. “We run a relatively autonomous unit in a very large organisation which has a strong client base and a well-recognised brand name. F&C Asset Management is one of the largest fund management groups in Europe and this can only be to the benefit of our business,” he says.
Mair has £130m worth of assets in private equity out of a total of £120bn assets under management at F&C Management. “We plan for private equity to play a more significant part of the overall business.”
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