Edinburgh firm targets innovation
Baillie Gifford backs US firms with £250m trust
Gary Robinson: ‘an exciting opportunity for investors’
Baillie Gifford, the Edinburgh based fund manager, is launching a £250 million investment trust to back US growth companies.
The Baillie Gifford US Growth Trust will be funded by means of a placing and offer for subscription of ordinary shares.
Its objective is to produce long-term capital growth for investors and will invest mainly in equities of US companies or which have a significant portion of their business in the US.
It is expected that the company’s initial investments will be predominantly in listed securities, but exposure to unlisted securities will be increased over time.
The company will usually invest in listed securities with a market capitalisation of at least $1.5bn, and in unlisted securities with pre-raise valuations of at least $500m.
The trust will focus on a portfolio of 90 holdings, typically with 30 to 50 listed security holdings. The maximum investment in any one holding will be limited to 10% of the company’s total assets.
It will be managed by Gary Robinson and deputy managers, Helen Xiong and Andrei Kiselev, members of Baillie Gifford’s US equities team and managers of the £924m Baillie Gifford American Fund which has returned 165% over five years.
The team believes the US is one of the most attractive countries for starting innovative businesses that may develop into exceptional growth companies.
Silicon Valley has become a nexus for some of the world’s most exciting technology companies, while Boston and San Francisco host deep concentrations of bio-technology companies operating at what the team believes to be the vanguard of scientific advancement in their respective fields.
The team’s view that although investing through the public equity market remains a very important source of exceptional growth company ideas, increasingly these companies are choosing to remain private for longer.
This represents a structural shift in the nature of capital markets which is likely to persist in the long term, the team believes.
“The necessity to list on a stock exchange as a means of entering the next stage of growth is not as acute as it was before,” it says in a statement. “As a result, there are many attractive businesses to be found in the private market. The company will seek to differentiate itself by investing across the spectrum of listed and unlisted companies.”
Mr Robinson said: “This is an exciting opportunity for investors to gain exposure to the truly innovative growth companies in the US.
“For over two decades, our American Fund has successfully invested in these companies in the public markets. This new investment trust will allow the team to take the same distinctive philosophy and process that has served our American Fund so well and apply it to a broader opportunity set which includes both public and unquoted companies.”