Dr Walter Scott

The enigmatic Dr Walter Scott, rarely interviewed or photographed, enters the sumptuous boardroom of his eponymous firm of fund managers and explains why elegance informed by history, personal passion and the genius of Robert Adam demanded he just had to buy Nos 1, 2, 3, 4, 9, 15, 16, 17, 44 and 45 Charlotte Square, Edinburgh. It is a labour of love, and an expensive one.

Scott - a top-class rower, fine pilot and nuclear physicist manque - began his quest quietly enough, in 1996 when he bought number 9, with the last of his two purchases, announced just before Christmas, garnering breathless media copy about the mysterious Howard Hughes figure intent on buying up the best addresses in Scotland. He is, though, flesh and blood - "private rather than reclusive" as he puts it in what is his first interview in decades - and even rather a good egg.

By a calculation so crude it would offend Scott - regarded as the doyen of international fund management - his acquisitions over six years represent one quarter of the jewel in the architectural crown of the Scottish Enlightenment, which includes the official residences of the First Minister and Moderator. He is planning shortly to bring his firm home to No 1, where it all started for him three decades ago with Ivory & Sime, in his drive to restore its reputation as Scotland’s financial powerhouse.

Scott’s mission to restore the fine Georgian houses to their former glories thus far has cost his firm in the region of £35 million, including restoration work, and he knows he is unlikely to recoup much of it. It bothers him not a jot, for these are the most zealous of conversions.

But why, the pundits wonder, would a brilliant financier, who deserted nuclear physics in favour of overseeing funds of £3 billion, acquire such a significant chunk of Edinburgh’s heritage, the finest Georgian square extant and, historically, Scotland’s best residential address before it evolved into the city’s equivalent of the Square Mile?

Speculation has been steadily growing for five years, the consensus being that it must revolve around a plethora of noughts on the good side of Scott’s balance sheet. The truth, he insists, has little to do with profit and everything do with personal dreams and a finely tuned sense of how the spirit of the past is relevant to the future. Nothing, he says, gives him as much pleasure.

"There is no secret agenda," he smiles. "Firstly, we don’t want to return the properties to their original residential use, although I wouldn’t mind anyone living in them.

"In effect, what I have done has been in an embryonic state since the 1970s . I wanted to own Nos 1 and 2 Charlotte Square. In the process, we acquired other properties in what has been the antithesis of a commercial decision for the simple reason that we are doing the opposite of what others have done."

Scott is deeply saddened that Charlotte Square had effectively lost its glory. Sitting at the end of George Street, once the richest street in Europe, Adam’s masterpiece of houses for the rich and influential typified the Enlightenment. Winston Churchill once said of it: "We make our surroundings and then they make us." But by the beginning of the 20th century the wealthy were moving out, to be replaced in the elegant properties by prestigious business, financial and legal firms. Since those early days, the Square has evolved into one of the most highly regarded international fund management centres in the world. However, the advance of technology and exigencies of open-plan space "dictated" the Square was no longer viable and many firms moved away, leaving parts of it to decay.

It is those halcyon days that Scott would love to reinstate.

"I believe Charlotte Square is the finest Georgian square in Europe, it was the best financial-legal address in Europe ... that is why I will be delighted to take my firm into it and return to the city’s centre of gravity. I’d love to think we could re-establish the Square as the financial hub."

Scott’s firm - consisting of seven partners and 26 employees - manages funds of £3 billion for around 50 clients, mostly US-based. The company presently occupies a castle on the outskirts of Edinburgh. Returning to the city later this year represents coming full circle for Scott. His career began in Charlotte Square in the offices of Ivory & Sime, which he joined after leaving Trinity Hall College, Cambridge, where he had taken his PhD in nuclear physics.

"Ivory bought Nos 1 and 2 and the impact was profound; we had an anchor at the core of Edinburgh. We would last for ever. Around 1980, Ivory sold the properties in a sale-and-lease-back agreement. I was broken-hearted and my greatest delight has been to buy them back," he says.

Scott’s acquisition of the properties in Charlotte Square testify to a business and life philosophy. "It’s said that the only assets of an investment firm are the people who work there, and it’s partly true. However, I believe the fabric of, for example, the Bank of England contains traditions and cultures that imbue people with longevity," he adds.

"I feel the same of Charlotte Square. It made Edinburgh investment management great, but they said it couldn’t readily be wired for computers or be open-plan, which was to miss the point.

"If you enter the boardroom of No 1 Charlotte Square, you feel that this is a room where important decisions are made and is not just for analysts 50-deep. The belief that a computer can’t do this or that is mythology. So, a wonderful environment and the finest of addresses is out of favour because of a faulty premise. That has coloured my thinking for 20 years, and in 1996 I leapt at the opportunity to buy No 9.

"As we restored, we were depressed by what we saw opposite, the gradual destruction of Nos 15 to 17, which had lain empty for a decade. We bought it in 1998. There was no commercial justification for buying; we were just trying to fix a mistake. However, I know that when we finish these buildings, which are being restored to their exact original state, with the reinstatement of gardens, they will stand for another 200 years, while the places we deserted them for will be dust.

"It is a project driven by altruism, but we will, of course, rent them out when they are restored."

Scott explains: "I take great pleasure in this; it represents my full circle," he says. "My life could have been different, but I made choices. I love what I do and they brought me to where I am today. That journey is as remarkable as the Charlotte Square project. "

Indeed it is. Scott, 53, a Glaswegian, and the father of three grown-up children, studied at Edinburgh before his doctorate at Cambridge, where, it would seem, he developed a nose for Cockburn’s port - the ’47. It was to have a profound effect on his career moves.

"I had two main choices, but I accepted some advice from one of my rowing coaches. I could have been a research nuclear physicist; I was capable, but I was surrounded by potential Nobel Prize winners. Furthermore, the college had a fine cellar and Cockburn 1947 was £1 a bottle. I decided I would like a career that would allow me to pay the ‘outside world’ price."

Scott, a "hobby" pilot and top-class rower - a gold in his age class at the 2001 Montreal World Masters regatta - and a collector of sports cars, adds: "The coach said, ‘If you want to smoke, work in a cigarette factory; if you want to make money, work in a bank’.

"I applied to financial institutions and stumbled on Ivory & Sime, where the boss, Jimmy Gammell, was a visionary; he believed if he collected bright people with probing minds, he could teach them the principles of investment analysis.

"It was a good culture. I was there for 11 happy years. Then, in 1982, three London firms and two from Edinburgh approached me and my partner, Ian Clark, and asked us if we would sell ourselves to them as an embryonic investment firm.

"The figures they were talking made me feel that if they could buy us for that sort of money it was worth trying ourselves. It was, I suppose, risky and we could have been looking for new jobs in six months, but it worked."

That is an understatement, but Scott’s desire to preserve his privacy - he has apparently not been publicly photographed for 19 years - has created in the popular mind an image of the dry, money-making tycoon with nothing in his life but work.

"I do work hard," he says and adds: "What is it they call it? The 24/7 week? But I don’t think I’m reclusive. I just find people don’t try hard enough to find me."

Scott dismisses the "doctor" from his title, insisting on plain Walter Scott. Appropriately, he is presently beneath a portrait of the other one - one of Raeburn’s "three", now all in Scotland since Sir Angus Grossart, the financier, told Scott he "had found something you have to buy".

Scott eschews blood relationship to the Great Man, although he concedes: "I may have claimed otherwise, perhaps after a third Glenmorangie."

He is elegant, tall, and dressed in a grey pin-stripe that manages not to be nondescript because of the enthusiasm of its wearer.

He is, of course, wealthy. Street-talk suggests that his stake in the firm he founded is potentially worth upwards of £50 million; such talk is dismissed, as are estimates as to his private income, recently reported at £100,000 a week.

His company, he says, is not for sale and the nature of his business is cyclical in terms of revenue, personal or corporate. It is his resistance to such scuttle that causes business journalists to describe him as reclusive.

Commentators cite his long "absences", which are explained by travelling. He and his colleagues record 600 flying hours a year en route to the US in the company’s jet.

"I concede that I don’t like to see pictures of myself, which is why, for a variety of reasons, I decline to be photographed, but I am not hard to find, and I have adhered somewhat to Jimmy Gammell’s philosophy.

"Our partners are very different, as are our senior staff. We have a lady who is an accomplished operatic singer, a couple of sports internationalists and a chap who is a black belt second dan karate exponent. It makes one approach matters with … care."

Jim McBeth
Wednesday, 16th January 2002
The Scotsman