Slater admits last year ‘humbling’ for Baillie Gifford

Tom Slater
Tom Slater: mistake (pic: Terry Murden)

Baillie Gifford manager Tom Slater has admitted that last year was “humbling” for the Edinburgh-based fund manager after its investments suffered a sharp downturn.

The manager of the £13.8billion Scottish Mortgage Investment Trust, was commenting at a London investor forum.

The trust last year lost more than £11.5 billion on stakes in previous high-flyer Tesla and Shopify after their share prices plummeted, making them two of Baillie Gifford’s worst-performing holdings.

Tesla is the Scottish Mortgage trust’s second-largest investment, accounting for 6.8% of the fund. Shares in the trust are down 37% over the past 12 months.

Tech stocks performed well during the pandemic as people were forced to shop, work and entertain themselves at home, but there has been a sharp downturn in the sector in recent months.

According to a report in the Daily Mail, Mr Slater said it was “a mistake” to assume consumer changes during the pandemic would be long lasting.

“Like a lot of our stocks, Shopify performed strongly in 2020, and then as the pandemic started to taper off, there were questions around how much of that extra demand will stick and how much is consumer behaviour, and what should the valuations of these companies be.”

Milson joins high yield bond fund

Baillie Gifford has appointed Arthur Milson as a co-manager of its £631m Baillie Gifford High Yield Bond Fund, working alongside existing managers Robert Baltzer and Lucy Isles with immediate effect.

Mr Milson joined Baillie Gifford last year as an investment manager in the credit team. Prior to joining Baillie Gifford, he spent 16 years managing high yield funds at Abrdn. 

The Baillie Gifford High Yield Bond Fund aims to produce a combination of income and capital growth by investing in high yield bonds. It adopts an unconstrained, best ideas approach, aiming to outperform the Investment Association Sterling High Yield sector average. 

Lesley Dunn, Head of Credit says: “Arthur joins us at an exciting time for the High Yield market, with the asset class providing close to double-digit yields.

“Arthur is attracted to the focus we place on bond selection in our credit strategies and the opportunities that our long-term approach affords.

“Higher financing costs and the prospect of a recession this year mean in-depth credit research has never been more valuable for high yield clients. We are extremely excited to add such an experienced hire to the Baillie Gifford Credit Team.”

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