To be called a “snake oil salesman” by a politician would probably make a person ponder their life choices, and the definition of irony.
Such was the fate of Martin Gilbert, the founder and then chief executive of Aberdeen Asset Management, when he was brought before the Treasury Committee in 2002 in the aftermath of the split caps investment crisis that left thousands of retail investors nursing losses, and the business Gilbert built on the edge of collapse.
He is now a million miles from that saga, with a new business, AssetCo, that has just made its first major acquisition: the purchase of River & Mercantile for £99m. But the memories of the split cap investment trust saga remain.
Split capital trusts were investment trusts that frequently used derivatives and high levels of debt to amplify returns, and some bought shares in each other.
A general decline in the FTSE in 2003 precipitated a crisis in these types of investments, with some investors reporting to the Treasury Committee that they lost thousands of pounds.
Aberdeen Asset Management were not the only major business to manage split cap trusts, nor was an Aberdeen product the first one to run into trouble, but that slice of invective towards Gilbert from the MP John McFall, and the former’s awkward performance at the committee, means the issue is now and forever associated with him.
Speaking to FTAdviser about it now, he shows contrition by saying he “understands” why retail investors abandoned his business over the issue (Aberdeen later sold the retail operation in its entirety), and acknowledges his luck that staff and most other clients stuck with him. But he also shows a flash of pride: “It was an horrendous time, but it is during the bad times that a CEO proves their worth. Being a CEO is easy in the good times, it’s what you do during the tough times that matter. We tried to be open with everyone, the temptation is to adopt a bunker mentality, but we chose not to do that.”
Gilbert achieved something that is surely the dream of very many but reality for very few; joining a tiny business in his hometown, becoming chief executive and leading it into the top leagues of the FTSE 100.
A certain kind of character
Individuals who do that typically fall within one of two character types: either tightly wound alphas whose intensity lacks charm but provides a presence that blasts through life’s problems, or super emollient types, whose charm bestows upon the recipient a feeling of gratitude that they are able to do the other person a favour.
Gilbert does not fit into either of these boxes; his greatest interpersonal skill may be that his extremely easy going manner puts the other person at their ease, but the flashes of the drive that took him from provincial Scotland to regular attendee at the World Economic Summits in Davos is evidenced by some of his language, as he refers to a continued desire to achieve and learn, and says he wants to continue working forever.