by John Dysart
“Can you help me on something? Do you know anything about Ailsa Investment Management?
“Do you mean AIM, the outfit run by a guy called Alan Purdy?”
“Yes.” “Why do you want to know? Thinking of investing?” “Oh, no. It’s for a friend of mine who asked me about them. I had never heard of them but I told him I would try to find out.”
“I don’t know much but I’ll ask around for you. Is it urgent? I do know they are giving a conference the day after tomorrow at the Caledonia Conference Centre. I’m going along.”
“Good, so am I. It’s at eleven isn’t it? Why don’t I meet you beforehand and we’ll have a coffee. It would be good to catch up.”
He was up for that so we fixed a time and a place and I hung up.
Chapter 6
I set off early on Wednesday morning to drive through to Edinburgh for my coffee date with Steven. I had decided that he could be a useful ally if it turned out that there was anything fishy about AIM and I was going to get him onside.
The drive down through Fife was, as always, nice and easy – easy from a traffic point of view and easy on the eye. Skirting round the east side of the Lomond Hills I drove down on the new fast road towards the Forth Road Bridge.
I have always loved the approach to North Queensferry. As a boy there had been no road bridge and we had had to make the crossing by ferry – a great adventure for a young boy.
But the old railway bridge had always been there – a magnificent monument to Victorian engineering skills. It is as much a symbol of Scotland as the Eiffel Tower is of Paris.
What makes it stand out so dramatically is the fact that it’s not spoilt by a town or city at either end. It spans the Forth about ten miles east of Edinburgh and stands in superb isolation above the grey waters of the Firth of Forth.
It was the first steel structure in Britain and was opened in 1890. It required sixty-five thousand tons of steel and God knows how many rivets.
Long may it stand. Steven was waiting for me at the agreed rendezvous. After exchanging welcomes and catching up on his career progress, I told him about my “friend” who had invested some money and wasn’t too happy about the performance and wondered if there was anything dodgy going on. I explained how I had agreed to go along and be a bit provocative and see what the reaction was.
“Listen, I’m going to try to upset him. We think there’s something behind the non-performance. When we go along you don’t know me. We’ll go in separately, but we can meet up afterwards during the farewell coffee or whatever. If there is anything fishy going on and Purdy gets uptight by my questions, and then sees me talking to a financial journalist, then he’s not going to be a very happy man. If you want to write an article on what you’ve seen or heard that’s ok with me but we do it as if you and I have no prior connection. Keep my name out of it. Tomorrow we can speak by phone and compare impressions. Then we can decide on next steps. OK ?”
Steven listened attentively. I stressed that I didn’t want him writing about our suspicions yet. If he reported the meeting straightforwardly, that was fine, but he wasn’t to start publically surmising yet. If we thought things were not right and we started digging he would be kept informed and we could decide together whether to go public or not, and when.
“Fine by me. Maybe I’ll get a good story out of it.” Little did he know that he was going to get several stories out of it.
As I entered the foyer of the vast glass building, a monument to modern architecture, having laboriously ascended the twenty-five granite steps leading up to the enormous revolving doors, I was asked two or three times if I needed any help. Was I perhaps lost? Was I sure I was in the right building?
I guess that jeans and brown leather loafers, topped off with a bright canary yellow, open-necked shirt, and covered with a light brown canvas jacket were not customary in this environment but I didn’t give a damn. I wanted the attention. I was past the age of needing to conform and I was determined to enjoy myself.
I walked up to the reception desk manned (or womanned?) by three bright young things, all smiles and lipstick, short skirts and plunging necklines, who dutifully gave me my badge and my welcome pack – a neat little canvas bag with logos plastered all over it containing the programme and a few advertising leaflets – and I was permitted to pass through into the auditorium.
I had procured an invitation through one of the few remaining contacts that I had in the Edinburgh financial world, so my badge carried my name but no company identification.
The auditorium was about a quarter full which gave me plenty of scope to choose a seat in a suitably strategic position. I chose one toward the middle, about five rows back from the front, right in front of the table behind which the various presenters would be sitting. I was pretty sure I would be noticed.
The auditorium gradually started to fill up as people straggled in, mainly in groups of two or three but with the occasional person on their own. It was a typical cross section of an audience for such an event – a couple of dozen elderly grey – or white-haired gentlemen in suits, shirts and ties – the old school, all around my age – a few little old ladies clearly there to keep an eye on what was happening to their savings, then the next generation: mostly male, most in their twenties, all texting furiously on their iPhones or consulting their iPads and ignoring everyone around them. I think if you asked them afterwards what the colour of the seats was or roughly how many people were there, they wouldn’t have a clue.
Perhaps thirty per cent of the younger generation was female – power-dressed in black or grey business trouser suits, sporting large “designer” handbags, (what is a “designer” handbag? I would have thought that every single handbag in existence had been “designed” by someone!), tossing their hair to the side to be able to slide the mobile phone against their ear. Heads tilted, earnest conversations taking place. The occasional wave to someone who passed. It gave the definite impression that it was all for show. Why not go out into the corridor to phone?
Two of the younger males sat down next to me – not so much as a “good morning” – and I received a full whiff of scented gel, mixed with the strong musky perfume of the girl in front. Fortunately on my other side I had a couple of guys of my generation who voiced the standard greetings and we exchanged a few normal comments about the weather, the traffic and last week’s rugby match. At least it was human contact.
At the appointed hour the three conference presenters mounted the four short steps at the side of the stage and took their places behind the table, each behind their own name plate. If they had got it right Mr Alan Purdy was sitting in the middle. I looked at him with interest. This was the man I had come to see. This was the guy that Pierre suspected was ripping him off.
He was about six feet tall and I guessed his age at around fifty-two or fifty-three. His face was starting to round out, the cheek bones no longer prominent and the beginnings of a jowl around his chin. The eyes under the slightly bushy eyebrows were blue and gave off the impression of a certain degree of intelligence. This impression was strengthened by a large forehead. He was smartly dressed in a three-piece suit, a blue and white striped shirt and a bright emerald green tie. A matching handkerchief had been thrust casually into his top pocket.
He was overweight – not yet dramatically, but on the way. But it was the mouth that bothered me. Set above a weak, slightly receding chin, his mouth was narrow, held in place by soft thickish lips. The overall first impression was of physical strength and relative good looks – a combination that, if not imbued by humility, tends to develop a liking for power. But that was only a first impression. I hoped that during the conference he would show more of the kind of man he was.
The master of ceremonies walked on to the stage, microphone in hand, beaming at everyone and proceeded to announce the beginning of the conference. Everyone quietened down. The younger crowd dutifully switched off their telephones; the older contingent folded away their newspapers.
&nbs
p; This was probably the culmination of a couple of months of earnest work by the man with the microphone and he was basking in the attention. I won’t describe him because he didn’t really have very much to him that made him stand out. He was just one of these guys that do this sort of thing and as far as I was concerned he could have his moment of glory.
He told us how delighted he was with such a large attendance for the fourth annual conference on “Investing for You” (with a nice commission for him, I thought to myself), and proceeded to introduce the speakers. Each name was greeted with polite applause, a little bit more for Mr Alan Purdy, Chairman and Managing Director of Ailsa Investment Management, but not from me. I’m sparing with my applause – certainly when no one has done or said anything yet. Why should you applaud someone just for turning up? If what the speaker has to say is worth it, I’ll willingly applaud – at the end.
There were to be three presenters who would each speak for about half an hour and there would be twenty minutes of question time after each presentation, announced the MC. Mr Purdy, who was clearly the star of the show, would be speaking last – after a coffee break.
I was not in the least bit interested in the presentations on “Succession Planning” or “Tax-effective Investing”. I would let them drift by. Mr Purdy’s presentation was entitled “Winning with the Big Boys”, sub-titled “How the man in the street can gain as much as the large corporate investors”. Why he couldn’t have thought up a title which was self-explanatory and didn’t need a sub-title to explain what it meant I don’t know. Probably there was some deep marketing philosophy behind the idea.
The elder contingent listened with attention to the discussion on Succession Planning, which was not surprising. The question session lasted about fifteen minutes and various people could be seen taking notes. After all, if they could pass on as much of their wealth to their children and grandchildren without the taxman grabbing half of it, why not?
Needless to say, each discourse had been accompanied by a bloody Power Point presentation. The “Succession” man treated us to a plethora of family trees with arrows flying all over the place. There was even one which simulated a situation of two men who had formed a civil partnership and adopted two kids, one of which had produced two grandchildren!
The taxman’s contribution was a series of slides containing reams of words and numbers and percentages. He proceeded to read them to us, presumably on the basis that he thought we couldn’t read them ourselves.
In spite of the fact that he had announced that we would all receive a hard copy afterwards, the younger generation earnestly scribbled away on notepads. He overran his time by about ten minutes, but that didn’t really matter because there were only two questions at the end – both of which were unnecessary because the answers had already been given in the presentation.
We had a short break for coffee in the lobby. I knew nobody, apart from Pierre and Steven, so I stayed off on the side, observing the sheep networking. After a couple of minutes a lady nervously approached me and held out her hand.
“Good morning,” she said somewhat nervously. “Are you enjoying the conference?”
I smiled down at her. She looked about ten years older than me, in her mid-seventies perhaps and was wearing a powder blue suit, the jacket over a white blouse adorned with a pearl necklace. Nothing to indicate poverty or wealth. Just a nice person. Her hair was white and neatly kept. She was sporting a black patent leather handbag, clutching a brown foolscap envelope under her hand bag arm and trying not to spill the coffee in her other hand.
“Here, let me help you.” I took the cup from her, placed it on the table beside us and turned back to answer her question.
“To be honest, the first two presentations bored me rigid. I really just came to hear what Mr Purdy has to say.”
“Me too. I’m Alice Hetherington, by the way. I don’t know anybody else here so I hope you don’t mind me importuning you.”
“Not at all. My name is Bob Bruce.” “Originally Robert, I suppose,” she said with a smile. “How did you guess? What brings you here?” “Well . . .” she said hesitatingly, and looked intently at me. “I’m also very interested in what Mr Purdy has to say. You see, I’m a client of his and I’ve given over most of the money my late husband left me to AIM for them to manage. I’m not very good at financial things but I’m a bit concerned about what they are doing with it.”
My antennae moved into gear. “Go on,” I said. “Well I don’t know if I should. You look like a nice, trustworthy person – certainly different from all the others here – but I don’t know you.”
“Mrs Hetherington – may I call you Alice? I’m basically here for the same reason as you. Not for myself, but for a friend who expressed exactly the same concerns to me. I promised him I’d come along here and listen to what they have to say and see if I could help him.”
“Are you, or were you, a financial person?” “To a degree. Let’s say I know more than my friend.” “And certainly more than me,” she went on. “The trouble is that I live up in Perthshire and I’m not exactly surrounded by smart financial management people. Our family lawyer knows a fair bit about conveyancing but that’s about it.”
“Where do you live?”
“Just outside Waterloo.” I knew the village which was just off the main road north to Pitlochry. I’d passed it many a time on trips north and always wondered how it got its name. It must be a village that was no older than the battle but I had often wondered who had named it and why? Perhaps the local squire had fought with Wellington and when he came back he renamed the farm cottages after the famous victory and it subsequently developed into a village. It wasn’t exactly the kind of place where you would find a lot of financial expertise.
“What do you mean when you say you’re concerned about what they’re doing with your money?”
“Well it’s not an awful lot, but it’s all I’ve got and I need the income to supplement my pension. It’s just not paying me as much as they said it would when I signed up.”
“And you’re thinking of moving it?” “I can’t yet because it’s tied up for five years and I’ve another three years to go.”
People were starting to move back into the auditorium. “Let’s go and see what they have to say and we’ll talk a little afterwards, if you’re not dashing off.”
“No, I’m not. See you afterwards then,” and she bustled off inside.
I took my place, ready for the AIM presentation or what I guessed would be the Alan Purdy show. I would definitely have to have a word with Alice afterwards.
Once everyone had settled down Mr Purdy was announced as one of Edinburgh’s success stories. He stood beaming and welcomed us all, thanked the two previous speakers for their erudite performances, cracked a couple of jokes which, although not particularly funny, were met by the obligatory laughter – mainly from the younger bunch.
His presentation was slick. There is no doubt about that. Power Point slides with multi-coloured graphs succeeded one another at just the right speed. You had time to absorb the effect of the slide while he pointed out the one or two numbers he wanted you to notice and then on to the next one. There was no way the slide was up long enough for anyone to fully absorb the detail.
The whole thing was very upbeat. Intelligently, he mentioned a couple of investments that had not turned out quite as well as expected but they had not had a major effect on the overall picture.
“We pride ourselves at AIM in our capacity and nerve to take risk – measured risks. That’s where the money is. Perhaps not today but at some point in the future we are sure that the risk ventures will come through.”
He was in command. He had his audience’s full attention. It was a mixture of plain language interspersed with just enough technical terms and buzzwords to sound very convincing. The trouble was it was mostly flannel. He succeeded in convincing everybody that last year’s growth of three point nine per cent and the upside potential of the riskier investme
nts, linked to the likely overall economic indicators for the next few years was an excellent performance – even better than the previous year’s three point five per cent.
A very satisfied Mr Purdy sat down to applause from the audience and congratulatory handshakes from his fellow presenters.
The Master of Ceremonies then announced that Mr Purdy would be happy to take questions from the hall. As always on these occasions there was silence for a few moments. Then an earnest young lady from the middle of the young bunch stood up and asked the first question. It was something to do with the ratio of fixed and variable returns in the portfolio which could have been answered with two or three simple figures, but somehow Purdy managed to spin out his answer to last about five minutes. Definitely a man who liked the sound of his own voice. He’d have been a good game show host.
Another couple of inane questions followed which were summarily dealt with and then our organiser looked at his watch and announced.
“We’ve time for one more question.”
I got to my feet, a couple of sheets of paper in my hand with some numbers on them which I had jotted down the day before.
I noticed Pierre, Steven and Alice all turn their heads towards me.
“I have a question for Mr Purdy.” Purdy was at this point smiling at the taxman sitting next to him, obviously thinking that his job was done. He wasn’t paying much attention to me.
“I’d first like to congratulate Mr Purdy on his very polished delivery.”
That got his attention. He smiled at me and nodded his thanks.
I pretended I was consulting my notes and glanced up and eyeballed him. The smile faded slightly. He started to look a little nervous.
“I’ve been looking at the results of other funds of similar size and the average growth figures I have is seven point two per cent for last year – some hitting as high as ten per cent. I also noted that the year before their average was six point nine per cent. According to my calculations that is a differential of, let’s say, three and a half per cent each year, which, for a fund of fifty million, makes three and a half million pounds over the two years. Can Mr Purdy explain to us where this missing money has gone?”