£650BILLION MAN
My friend Donald and me...
IF YOU can judge a man by his friends, then Martin Gilbert is a power player. The co-chief executive of investment firm Standard Life Aberdeen is chummy with everyone from the legendary former Manchester United manager Sir Alex Ferguson to recently deposed advertising titan Sir Martin Sorrell.
As well as his day job, he’s on the board of Sky and rubs shoulders with the Murdoch family; he knows Fred Goodwin, the former RBS boss; and he’s even a mate of Donald Trump. The two met golfing in Scotland, and Gilbert was invited to the inauguration ceremony.
‘It was very long. There was a lot of hanging around. I’m not sure I would go to one again but I’m so pleased I went once,’ says Gilbert.
What’s Trump really like? ‘He is a property guy, and that sums him up.’ A question as to whether he means the sort of property guy who would go to the infamous Presidents Club where waitresses were allegedly groped, floats into the ether, unanswered.
‘I like him, but I’m still astonished he became President,’ Gilbert says. ‘It doesn’t worry me, there are enough checks and balances in place. Trump, it’s the same as Macron, who came from nowhere, same as Brexit. It is a vote against the elite.’
‘I go to Davos,’ he says, referring to the annual World Economic Forum in the Swiss ski resort – a magnet for the rich and powerful that is denounced as a smugfest by its detractors. ‘You are told there that globalisation is good. But 90 per cent of people in the UK would say, “Well it hasn’t helped me.” We need to ask ourselves, how did Trump get elected.’
Gilbert, 62, is an expansive man who doesn’t hold back with his forthright opinions. He loves entertaining clients, often at the splendid Ardoe House hotel in Aberdeen, or holding court in his tartan trews at the Braemar Games in the Highlands. With a reputation for shrewdness, he is one of the City’s great survivors.
He co-founded Aberdeen Asset Management in 1983, and built that business from scratch into one of the world’s leading independent investment firms – though not without some white-knuckle episodes along the way.
The most recent chapter is Aberdeen’s merger last summer with Standard Life to create a giant with more than £650billion of investments under its stewardship.
Gilbert is now joint chief executive of the new company, Standard Life Aberdeen. His fellow boss is Keith Skeoch, a quieter figure who came up through the ranks of Standard Life. Many in the City see this as the pairing of a buccaneer with a bureaucrat that is quite likely to end in tears.
Gilbert tells a different tale. It was, he says, ‘the only way we could do the deal. Because it is a genuine merger even though Standard Life was twice the size of Aberdeen.
SHREWD: Martin Gilbert is one of the City’s great survivors This co-chief executive thing plays to our strengths. I know what my weaknesses are. I have a lack of attention to detail and less interest in the internal operations of the business. I enjoy clients, meeting shareholders. Keith is great on areas that I am not. He doesn’t really have weaknesses like me, I only talk about my own.’
Would he go on a night out with Keith? ‘Yeah, he likes a glass of wine as I do. I tempt him out occasionally,’ he says.
Gilbert even goes so far as to suggest that the duo will step down simultaneously. ‘I suspect we will go at the same time,’ he says, adding: ‘I’m not putting a time on it, because I am amazed I’m still in the job.’ More seriously, he says: ‘It’s up to the board, as we saw with my friend Sir Martin Sorrell,’ talking about the exit of the legendary adman earlier this month after a row over the use of company expenses.
Sorrell’s departure leaves Gilbert as one of a rare breed of very longserving chief executives with more than three decades under their belt. There is too much churn at the top, in his view. ‘People hire and fire because they think someone has a weakness. They get rid of them and bring in someone else, who doesn’t have the same weakness but a different one,’ he says. ‘I used to say I’m not retiring until Sir Alex Ferguson does and then I changed it to Sir Martin Sorrell. I’m going to have to find someone else. I found a 93-year-old CEO in the US,’ he laughs.
If Sorrell wanted advice on how to make a Lazarus-like comeback, he could do worse than get on the phone to Gilbert, who was embroiled in a huge savings scandal 14 years ago.
The ‘split capital’ affair is now nearly forgotten, but at the time was huge. Thousands of small investors saw their savings wiped out. Gilbert and his fund managers were denounced by MPs as ‘sophisticated snake oil salesmen’.
Aberdeen, he says, had a ‘near death experience’, where it narrowly escaped going bust. ‘Nowadays I wouldn’t have been given a second chance. It was remarkable I survived it. But the board said: “You got us in this mess, now get us out.”’
How far, though, should forgiveness extend? What about Fred Goodwin, for instance? ‘I know Fred and in a funny way he is probably quite happy not having gone back into banking, he is a guy who likes his hobbies.’
He argues shareholders such as Aberdeen should bear some of the blame for the downfall of RBS, because they voted in favour of its disastrous takeover of Dutch bank ABN Amro.
Gilbert seems an unlikely feminist but he pens articles for the local Aberdeen press on the gender pay gap. ‘I have two daughters and that definitely makes a difference. I want them to have great careers if they want and not to face discrimination,’ he says.
He also has a very high-powered wife, Fiona, who is a professor of radiology at Cambridge University. At Aberdeen, men are on average paid 34 per cent more than women and 42 per cent more at Standard Life. ‘I am assured males and females are paid equally for the same job. The problem is that there are not enough women in senior roles,’ he says.
Back to the merger, and it has already hit a major bump in the road in a clash with Lloyds over the sale of Standard Life’s insurance business.
Gilbert was in talks to do a deal with Antonio Horta Osorio of Lloyds, who wanted to buy it and merge it with his Scottish Widows life assurance and pensions arm. But the talks fell apart after ‘lengthy discussions’ and Gilbert did a £3.2billion deal with Phoenix instead.
Lloyds then said it plans to take away £109 billion of assets currently managed by Standard Life Aberdeen, claiming it has competition concerns.
Talk in the City is that Horta Osorio wanted to get the Standard Life insurance business on the cheap then pulled the asset management contract in pique, but Gilbert is diplomatic. ‘I don’t know if both sides got deal fatigue. We have never accepted that Standard Life was in material competition with Lloyds Banking Group, so there are still differences to be resolved.’
As for the merger itself, critics see it as two weakened giants trying to shore one another up – but Gilbert insists the pair are complementary.
‘The merger was partly offensive, partly defensive. You need to be big now in asset management, there is an arms race going on. We are now in the top ten global independent asset managers and certainly the biggest outside the US. Size matters now.’