With an eclectic career that has spanned the formative days and institutions of modern Irish business, Martin Rafferty is now about to bow out Gracefully, writes John McManus.

Knowing when to quit is the secret of success in any game of chance, and that includes business. After 40 years at or near the top of Irish business, Martin Rafferty has decided to fold his hand.

"If you enjoy the game, there is a great incentive to stay in the game. The other side of the coin is that you may stay too long," he explains.

The 71-year-old has stayed longer than most and justifies his longevity on the basis that his interest has not waned.

"But you look in the mirror and there are some things there that you can not deny," says Rafferty, who in recent months has stepped back from business life, giving up the chairmanship of United Drug and Readymix. His sole remaining directorship is Allianz Ireland.

Having "done his thing" and "given it a hell of a lash over 40 years", he is no stranger to the press and easily fields a predictable line of questioning about what was his biggest regret in a career that spanned academia, merchant banking and a foray into conglomerate building.

"I have no time for people who say that if they were to do it all again they would not change a thing. My reaction is that anyone who says that hasn't learnt anything," he replies, before going on to ignore the question and speculate instead that things might have turned out differently had he chosen not to return to Ireland from California in 1964.

A spell at the University of California, Los Angeles (UCLA) on an Irish State scholarship opened Rafferty's mind to the American way of doing business, which had yet to conquer the world.

"I was there for eight months. About half of what went on passed me by - I didn't have the experience to be able to catch on - but the 50 per cent that I did catch on to left you well ahead of the posse when you came back."

But the decision to come back at the age of 30 to his job with the Irish Sugar Company was not a given and was due primarily to domestic concerns. Equally, the decision not to take up a job with a European consultancy firm proved a fork in the road.

Instead, he returned to take a job as one of four management teachers hired by Ivor Kenny to form the nucleus of the Irish Management Institute (IMI). At the time, the IMI was the only show in town in terms of executive training and was heavily involved in management development at Allied Irish Bank.

Rafferty clearly made an impression on the executives who passed through his hands and, in 1968, was asked by Mon O'Driscoll, the chairman of AIB, to head up its fledgling merchant banking business, Allied Irish Investment Bank (AIIB).

"The feedback was that maybe this guy is somebody you should have in the group," he explains.

Investment banking was a niche business in Ireland at that stage, dominated by Guinness & Mahon and Hill Samuel.

At AIIB, he surrounded himself with what he recalls was a "fantastic team" of around a dozen executives including Tom Toner, John Hartnett, Vincent Ferguson and Nicholas Leonard. Some of the junior executives they hired also went on to be substantial players, including Tom Mulcahy, who would eventually head AIB, and Jim Flavin, who went on to build DCC.

Roy Douglas, who took Irish Permanent to the market and merged it with Irish Life, started with AIIB along with Pat Ryan, who went on to greater things within AIB. In the wings was Tony O'Reilly, who served as a non-executive director.

AIIB's decision to invest in Irish management contrasted with the strategy adopted by Bank of Ireland, which set up Investment Bank of Ireland with Morgan Grenfell and Schröder. Its management was quintessentially Anglo-Irish, while AIIB was manifestly Catholic and Irish - personified by Rafferty himself who came from modest beginings in Glenamaddy, Co Galway.

"I would have been one of those who came from a family that gives up pretty much everything in order to educate their kids.

"There were 70 kids in my national school. Two-thirds emigrated either to work in construction in the UK, or the police and fire services in Boston," he explains.

Rafferty went on to secondary school at Castleknock, and then UCD before training as a chartered accountant.

His progress was interrupted by a four-year hiatus in 1958, following the death of his parents, when he ran the family shop in order to allow his sisters complete their education.

The first few years of AIIB were an out-and-out success. Rafferty had made literally thousands of contacts throughout Irish business while at the IMI, and now was the time to make them pay.

"They were good times," he recalls. "Of course, we didn't put down our success to the fact that we had the wind to our back. It was all due to our own ability," he says with a smile.

"One year, in 1972, we did five IPOs [ initial public offerings]. My guess is that there weren't five IPOs done in 10 years after that."

In this heady atmosphere, it was hardly surprising that Rafferty and his colleagues would eventually try and go it alone.

"At that time, if one was going to amass some wealth you either inherited it or went into business on your own. The whole concept of share options, for example, didn't exist."

With backing from Ulster Bank, Rafferty and Toner bought Joshua Watson, a shell company quoted on the Dublin Stock Exchange. In 1972, they bought construction company Mahon & McPhillips as well as food distributors Amalgamated Wholesalers. The following year, they acquired building supplies group Brooks Thomas to form the Brooks Watson Group, which survives to this day as BWG, the owner of the Spar franchise for the Republic.

Brooks Watson went through tough times in the late 1970s and early 1980s as the economy faltered. Rafferty relied heavily on his relationship with Ulster Bank, but the group suffered a similar fate to many other conglomerates spawned in the 1970s. It was acquired by Irish Distillers who sold off everything except the wholesale business.

Rafferty put together a management buyout of one subsidiary, United Drug, for £3.35 million in 1985. The company is now worth something close to €900 million and Rafferty rates his role in its subsequent development as his most significant achievement.

Looking back, Rafferty sees that period in the 1970s that gave rise to Brooks Watson as the time Irish business came of age.

"Irish companies that dominated the home market started to move abroad, the classic examples being CRH and Smurfit," he explains.

A huge influence in this was the IDA, which he later chaired.

"One thing that is not talked about is that many people who got their early experience in IDA-backed companies then moved into indigenous firms and brought skills with them, particularly the control mechanisms that the big multinationals employed. It had a marked effect at that time," he says.

He acknowledges that much of the gloss has been taken off this period by what has emerged at the various tribunals and other inquiries about widespread tax evasion and other less-than-ethical behaviour.

"What strikes me, and it's not a justification, is that one of the things from which that emanated was the high degree of taxation. I think at one stage it went to 85 per cent.

"If the thought process was not already there, then most certainly that [ high taxes] accentuated it," Rafferty says.

"I have been around a long time, but some of the things that happened in recent years have absolutely flabbergasted me. I always thought that one of our strengths here was the integrity of our public service."

Looking ahead, Rafferty wonders about the resilience of the generation of executives that will succeed his generation.

"If you have lived your life as I have, you come to terms with the fact that there will always be failures. Anyone who becomes successful in business will have run through a rocky period and it might have been a very thin line between whether they made it or didn't.

"Some of the most successful entrepreneurs in this country had businesses which failed. One of the dangers in that they [ the younger generation] have had it so good over a 15-year period is that they think it is the only world there is out there... The tide will turn."

FACTFILE

Name: Martin Rafferty

Age: 71

Background: Born in Glenamaddy, Co Galway, he attended Kilkerrin National School. He went on to Castleknock College and then to University College Dublin. He also attended University of California, Los Angeles (UCLA). His qualifications include a B.Comm, FCA and ACMA. He is married to Betty and they have five sons.

Interests outside business: All sports with the exception of racing and golf.

Why he is in the news: After 40 years in business and stints on the boards of Jefferson Smurfit, Ulster Bank and Greencore, as well as being chairman of United Drug and Readymix, he is calling it a day.