A London-based based equity analyst has claimed outgoing US President Donald Trump is unlikely to achieve a return on his investments in Scotland.
Steve Clapham, of investment research firm Hardman & Co, looked at Mr Trump’s two Scottish golf resorts – Trump International Scotland on Menie Estate, in Aberdeenshire, and Turnberry, in Ayrshire.
Both are technically now owned by other members of Mr Trump’s family, as a result of the president putting his business interests into a trust, controlled by his two adult sons, to avoid conflicts of interest.
Mr Clapham said the golf resorts were underperforming their peers – Gleneagles and Loch Lomond Golf Club – and producing significant losses.
Reporting his findings, he said: “President Trump likes to project himself as a highly successful businessman but surprisingly little is known about his true financial position.
“All sorts of claims and counter-claims have been made about his wealth – by Trump himself, pitching his fortune at some $9 billion (£6.7bn), and by journalist Timothy O’Brien, suggesting it is as “low” as $150 million-$250m (£112m-£187m).
“It is doubtful whether we shall ever know the truth, but we can use Trump’s UK corporate filings to gain an insight into his businesses in Scotland.
“We look at the period to the end of 2018, and at the last accounts filed by the two Trump UK holding companies. We do not expect the Trump 2019 accounts to be published before Christmas, as UK companies now have 12 months to file because of Covid-19.”
Mr Clapham, whose report comes ahead of the launch of his new book on investing “like a hedge fund pro”, said losses at Menie from launch to the end of 2018 totalled £13m.
He added: “At Turnberry, there are accumulated losses of £44m, and negative equity of £51m.
Had Trump charged interest on inter-company loans at either company, the losses to date would have been significantly higher. Had they been run independently, with directors paid for their services and arm’s length financing, the two businesses would have accumulated losses of well over £100m in the period of ownership by Trump.
“Although 2019 may have seen an improvement, 2020 must have seen significant losses. This means that Trump’s losses will certainly have increased significantly.
“The decline in the value of the sterling loans into the two companies, plus cash injections required as a result of Covid-19, must amount to $50m (£37.3m) – and probably significantly more today.
“It is hard to see how Trump will extract a return from his investments in Scotland. It may be possible to stem or slow the losses, but there is a large amount invested, and generating a return on that investment will be difficult.
“One tailwind now may be a weakening dollar, although the pound has not been in favour, and we have the consequences of Brexit to come.
“The further proposed developments at Trump International could be lucrative but, given the track record, this seems unlikely.
“Perhaps, by ‘magic’, there will be another golf-loving billionaire with Scottish blood, whose appetite will match Trump’s, but this looks even more of a long shot.”
Trump International failed to respond to a request for comment.