“My big break was investing in Sage. It was part luck and part judgement,” says Jackson. “I believe in luck.”

He became an investor in and director of The Sage Group in 1983, before taking on the role of chairman. The accounting software firm floated on the stockmarket in 1989, entering the FTSE 100 in 1999 and becoming one of the most resilient tech stocks during the dotcom crash. It was the best performing UK stock for a 10-year period. It currently has a market capitalisation of £2.2bn, but was worth four times this at its peak.

Sage is proof that the really great companies are not flash in the pan, and stand the test of time. Spotting companies with similar longevity is one of Jackson’s talents and has been applied to Elderstreet investments. 

Indeed, as an investor Jackson seems to have the Midas touch. Elderstreet’s investments also include Netstore, which listed on the LSE, and Computer Software Group, as well as Micromuse.

But Jackson, who originally worked in the City, is a businessman as well as an investor. Elderstreet was acquired in 2000 by Dresdner Kleinwort Wasserstein, which began working with Elderstreet in 1991. Just three years later Elderstreet bought back its independence, though it continues to manage a number of funds on behalf of DKW.

Because Jackson has been on all sides of a deal he is well placed to make judgements about what companies to invest in. His experience even extends to a role as chairman of Partygaming, where he was early to spot the trend to online gambling sites.

However he points to his first investment, which he says was not only his worst investment but also the one that taught him how to invest. “It was the wrong place, the wrong time, the wrong management, and it went bust. It taught me much about how to invest – but set me back years.”

It is experience at the coalface that gives Jackson a unique perspective when he is considering investing. “I get excited about the market rather than people,” he says. “It is hard to tell what people are like.”

Jackson’s experience of investing over almost two decades means he also brings a reality check to his investment decisions. As the recession takes hold he points out that there are people who are doing reasonably well because their business model is working. “It is quite sector specific,” he says. “But the rate of decline and the scale of problems are growing. The speed factor is the main difference between now and the past.”

He says as recently as November 2008 business was still relatively buoyant, but was hit hard between December and February. In today’s climate there is private equity money around but it is limited and harder to get investment.
“There is a lot more realism creeping into it [investment decisions],” he says. “There will be companies on the cusp where people apply numbers that are too pessimistic and not getting funded.”

Compare this with the 1990s when there was not the same depth of technology expertise or the understanding of the potential of the Internet. “In the 1990s technology was still growing despite the recession and the tech market did not suffer that much,” says Jackson. “But 2002 was a catastrophe. That decline was limited to tech sector rather than broad economy.”

By contrast 2009 is tough because everyone is cutting back on expanding on every aspect. However Jackson remains convinced of the value of technology companies. He says that where technology can be used to save costs and where companies can produce a proper ROI, entrepreneurs will continue to get backing.

“Then there should be something that benefits from recession,” says Jackson.

Elderstreet is concentrating on its existing portfolio. “Making new investments is a high-risk strategy,” points out Jackson. “You can get synergies out of your portfolio.”