Activist's sale

Elliott takes profit in retreat from Scottish trust

Tesla
Scottish Mortgage Investment Trust made big gains on firms like Tesla

New York-based activist investor Elliott Advisors has cut its stake in Scottish Mortgage Investment Trust (SMIT), a move seen as a withdrawal from further attempts to influence the board of the Edinburgh company.

Elliott has previously forced major change on Dundee-based Alliance Trust and its appearance on SMIT’s share register sparked similar concerns at the Baillie Gifford owned investment vehicle.

However, it has disclosed that it had cut its stake in the FTSE 100 company to below 5% in a move that could be linked to the £313 million purchase of 35 million SMIT shares by the trust itself.

Analysts believe that via a company-instigated buyback programme Elliott has achieved its goal of narrowing the discount from 15% to 5% and has now realised some of its profits.

Shares in the company have been trading below 740p but last week’s deal was struck at 895p, handing Elliott a profit estimated at between £100m to £200m.

SMIT became a popular stock for investors looking for exposure to some of the world’s growth companies, such as Tesla, which made stellar returns. Its current portfolio includes AI chip maker Nvidia and Amazon.

Elliott has not been the only fly in the ointment. Last year, Amar Bhide, an independent non-executive director, resigned after accusing chairwoman Fiona McBain of a lack of independence and expressing concern about the extent of the firm’s exposure to unlisted shares.

Ms McBain left and was replaced by Justin Dowley who has stepped up the buyback plan.



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.