Two-and-a-half years ago, John McGlynn realised he knew very little about private equity, so he booked a flight and a hotel in Boston and enrolled at Harvard Business School for a short course. It was £8,000 well spent.
“What I learned was amazing and I made some good friends, including chief executives of sovereign wealth funds, with billions in every continent,” he says.
“It was the best money I have ever spent on anything.” He was exposed to the teaching of Josh Lerner, the Jacob Schiff Professor of investment banking.
He is the guru and the top guy in the field of private equity and how it works on a global scale.
“To get the opportunity to be taught by Josh Lerner is an opportunity you should not give up lightly,” he says.
“I want to go back.” This awakening, along with informal mentoring sessions with Jim McColl, Scotland’s most revered business figure after his recent deal, has led to the transformation of the Airlink Group into an investment property management business.
Allied to this new approach is a move from Paisley into central Glasgow – buying, refurbishing and opening a suite of glass-fronted rooms in a first-floor office in Gordon Street, above the trendy Cath Kidston outlet, and nearer to the movers and shakers.
Paisley-born and raised, McGlynn has always been ambitious for his business and for Scotland. He’s not afraid to air his opinions and is a sounding-board for many of Scotland’s leading business agencies. He sits on Alex Salmond’s National Economic Forum and is also an ambassador for Business For Scotland.
He has been a proponent of business links between Scotland and the Baltic states and was the brains behind setting up Scotland House in Tallinn. But his passion for professional learning is deep-rooted.
As he was doing his accountancy degree at Caledonian University his mates started working in weekend jobs in the NCP car park at Glasgow Airport.
He followed suit and started part-time in 1993. “This was my exposure to the car parking industry,” he says.
“I ended up getting a job for one of the other car park firms and that’s what sparked the opportunity for me.” The prospect of setting up your own business was an alien concept in Paisley, so he went on to Strathclyde University to do a law degree.
He says: “I’d originally wanted to do law but didn’t get the grades at school, so I had to circumnavigate to do it the squeaky, hard way.” McGlynn was on his first year of the two-year graduate programme when he was driving through Paisley and almost crashed his car into a bus.
On the back of Renfrewshire bus sitting in front of him was an advert: “Want to start your own business? Come and talk to us at Renfrewshire Enterprise on the New Ventures Programme.” “So being a daft, naive 20-year-old, I traipsed down to the induction evening and signed up for the New Ventures Programme, which was two nights a week,” he says.
It was the offices of Paisley and Renfrewshire Enterprise, one of the local enterprise company backed by Scottish Enterprise (now a full circle for McGlynn as he is serving Scottish Enterprise’s board).
Here was a team of enthusiastic, young consultants who were running a “get-intobusiness” programme, one of the first of its type. For John McGlynn it was a revelation.
“It was absolutely brilliant and one of the guys who took the course was Alex Paterson, then head of small business development and – since 2010 – the chief executive of Highlands & Islands Enterprise,” he says.
“So he has done well. He was a fantastic guy responsible for the delivery of the programme.” Through this, John – who was still at university, – was able to get a funding package, which was a Small Firms Loan Guarantee Scheme from Bank of Scotland, and a grant from Scottish Enterprise.
This gave him the ability to get into car parking.
He saw a site of an acre in size, which said: “Land for let, suitable for hotel or car park”, but it wasn’t big enough.
“Once we did the numbers we came across the first rule of business – unless you have scale and quantum, it doesn’t work,” he says. But it whet the appetite and he began investigating every potential site near the airport, eventually finding Clark Street in Paisley. It was leased with an option to buy after three years.
This was the embryonic Airlink. “Whether you make your own luck in business, I’m not sure, but we got a break,” says McGlynn.
“A friend came on the phone saying that Kirsty Wark was doing a television programme and looking for a young business person just starting out for a programme on BBC Scotland called Up Front.” It was a Monday night prime-time programme comparing McGlynn’s new business and a Big Issue seller. He jumped on the opportunity. Both, according to the show, were entrepreneurial. The publicity was terrific. Meanwhile, McGlynn was on the other channel making a regular “young person” contribution to a current affairs programme called Trial By Night, an STV programme introduced by Bernard Ponsonby and Kay Adams.
“I used to bring along my law school friends and I could talk for Scotland,” he says.
“I got to know Bernard quite well and I asked him if he could introduce me to Katie Wood who presented Scottish Passport, the number one holiday programme in Scotland.” Her researcher got in touch and the show did a news item about his new, low-cost car parking.
“We offered a deal of a £1 off for every Scottish Passport viewer and we got massive publicity,” says McGlynn. With great exposure for the car park on both BBC and STV, John McGlynn and his semi-retired father – also John – became busy on the site. The pair drove cost-conscious holidaymakers and their luggage to the airport terminal in a shuttle bus, a Ford Transit.
It involved dozens of trips a day, and it soon became full-time. McGlynn decided to switch to a part-time law degree so he could build the business, graduating in 1996.
“All my friends thought I was completely bonkers because I didn’t start drinking until I was in my late twenties,” he says.
“I’d have one drink on a Thursday night with my university colleagues, but I had to drive the shuttle bus and keep my head clear for that. It was my livelihood.
There were huge sacrifices made, but I took the view that if you’ve made a few quid, you can have all the fun in the world. But you’ve got to do it first.” It’s said there are only two ways to make money – work hard or strike oil.
“Given that we weren’t anything to do with the oil industry, there was only one option,” he jokes. A strong working relationship between Glasgow Airport and Airlink has been an important factor, with McGlynn asked to become an “airport ambassador” along with Jim McColl and Chris Gorman.
“They have never seen us as a threat,” says McGlynn. “The airport knows that there are two types of customer – those who are not price-sensitive and want convenience will park as near to the front door of the airport and are happy to pay the premium price. And those, probably in holiday mode and much more price sensitive, because every penny counts.
Recently, they see us as a genuine partner because of the money we’ve invested in our sites with check-in technology, proper lighting and fencing and security. We’ve raised the standard in the industry.” It didn’t take long before the car parking business had traction.
Airlink Group is an umbrella brand with a suite of companies including Airport Park & Ride, Direct Parking, Park Safe and CarParks.com, and now asset management.
But, most importantly, it was highly cash-generative and John McGlynn began to think how best to diversify. For him, the one industry that always seemed to do well was property.
He says: “People will question this in recent times, but I still take issue with that. Property is still a great sector to be in, notwithstanding all the current difficulties.”
In the late 1990s, Renfrewshire was enjoying a boom. Commercial property in the greater Paisley area became a central tenet of his strategy, with the money used to buy small plots which were improved and then sold on later to house builders. The proximity to Glasgow Airport was also a major factor.
“Glasgow Airport remains Scotland’s gateway to the world,” he says.
“And it will do for the future, given that most of the population is in the west rather than the east.
Logic dictates it was a good long-term home for us and, 17 years on, that remains good today.” Paisley, as a former industrial town with its decaying Victorian mills and warehouses, had plenty of redundant and derelict buildings and McGlynn recognised this could all become part of the airport hub for commercial business – but that it would take time.
“We would have a number of trading entities which would allow us to own property and that strategy worked pretty well,” he says.
“In recent years we’ve expanded our horizons beyond Renfrewshire. One of our recent purchases was the Clyde Workshops, out at the M74, a seven-and-a-half acre site bought two years ago from Miller Developments.
We have about 40 tenants on that site and there are excellent development opportunities because we’re on the wall of the M74.
We like sites that the market doesn’t like.” One of Airlink’s newest sectors is in self storage, massive in the US, which he sees as a massive opportunity for “property-based” trading.
In November 2006, Airlink bought the Chivas Tower at Linwood, a 17-acre site, where one of Scotland’s finest whiskies, now owned by Pernod Ricard, was once bottled and distributed. Pernod had purchased the site for around £10m a decade earlier, but values had slumped and John McGlynn offered around £4m.
“We thought a quick clean deal was important for them,” he says.
“So we bought the site in a matter of weeks. It was a huge acquisition for us.” The building was ideal for document storage because it already had £4m worth of palletised machinery for the whisky bond.
“We thought, ‘why can’t we store boxes on the pallets in the big warehouses?’,” he says.
“But what we wanted was the parking space for 2,000 cars close to the airport.” Then the Malcolm Group made them an offer that they could not refuse, allowing Airlink to sell the building but keep the parking. The idea of document and self-storage was firmly embedded though – this was the future.
“We owned the building for a year and we got a fair price when we sold,” he says.
“It’s the old scenario – get in and out at the right time. It was good working with the Malcolm Group and we still have the eight-acre car park. You can’t get all emotional about things. It’s the old Gordon Gecko phrase about not being emotional about stock.
Sometimes we did get too passionate about businesses.” The learning point was; everything is for sale at the right price, unless it is really strategic.
“My approach in buying assets is what can we do that others can’t do,” he says.
“How can we add value? It’s not rocket science and we are still small in comparison to many others.” Airlink’s market valuation is around £30m, a dip from the heady days of 2006 when property was on a different planet.
“Our ambition is to grow the market capital, so we buy something for £1m and add value to be worth £2m,” he says.
Airlink is embracing the private equity timescales, so if it buys a car park, it wants to remain in that area for at least five years.
“We’re not into buying, doing something cute and then flipping it,” he says.
“We don’t plan an exit but we need to add significant value.
In a five- to seven-year period, if we were to exit, there would be a good return for investors.”
In 2008, Airlink was forced to make painful decisions to reduce overheads, so fully automated self check-in at the car parks was introduced which meant a reduction in head-count.
Another victim of the credit crunch was a mixed-use, £100m masterplan for Paisley Waterfront which was put on ice. McGlynn has recently had talks with the council to try and resurrect the plans.
His father, who was a great mentor, died in 2005, although his mother, Margaret, is still working with Airlink and has been enjoying the move from their “rabbit-warren of offices” in Paisley into a prime, open-plan location in Glasgow, and its proximity to the retail therapy in Buchanan Street.
“Moving here will be seen as a tipping point for us in five or ten years,” says McGlynn. “We don’t need all the space right now, but it will be a new badge for us as we build for the future. It was as exciting for me moving into this new office as it was the first week opening the car park.”
So what are John McGlynn’s hobbies? Guess what… it’s still continuing education. While he graduated in law he never finished the diploma in legal practice. He never ticked the box of becoming professionally qualified, so it’s back to night classes at Strathclyde. And, who knows, he might even end up devilling to become a non-practising advocate!