Baillie Gifford trust ventures into unquoted companies

US Growth trust can hold up to 50% in unlisted securities

Baillie Gifford US trust fundraise short of target


Uber rival Lyft and medical imaging device firm Butterfly Network are among the first crop of private companies the Baillie Gifford US Growth trust will invest in having run a portfolio of listed securities since launch in March.

Baillie Gifford announced on Wednesday the trust had invested in four private companies, which currently account for 3.5% of the trust’s £279m total assets. The trust ultimately has scope to take its unlisted securities allocation to 50% of total assets.

Alongside the rideshare and ultrasound businesses, the team has added Boston-based agritech firm Indigo Agriculture and Zipline International, which specialises in life-saving drone delivery.

Baillie Gifford duo encouraged by performance

Speaking to Portfolio Adviser earlier this year lead manager Gary Robinson and his deputy manager Helen Xiong admitted they expected to get some unquoted picks wrong.

However, Robinson said performance had been encouraging in a statement on Wednesday.

“These are exciting times for growth investors,” Robinson said. “The world is going through a period of almost unprecedented change, driven by the convergence of a multitude of technologies such as the internet, mobile devices and machine learning.

“There will be both huge value creation and destruction through this disruption, and if we succeed in our aim of picking the growth companies driving this, the rewards should be very significant.”

He said they want to hold companies long enough to see their optimum valuations realised.

Up until recently the duo did not have any direct experience investing in private companies though both had been researching unlisted firms in America for “many, many years”.

Robinson and Xiong were initially joined by Andrei Kiselev on the US Growth trust but he left the company a week after launch.

Portfolio has evolved

The US Growth trust is the first closed-ended vehicle the Scottish asset manager has launched in over three decades. It fell short of its £250m fundraising target when it floated in March instead raising £173m.

It invests in a portfolio of 90 listed and unlisted growth companies in America.

The trust launched as a mirror of the Baillie Gifford American fund, which Robinson and Xiong also help run, to ensure there was no pressure to invest in unquoted firms on day one. Robinson said the portfolio has evolved in the period since.

The investment company’s share price is up 36% since launch. It has also issued £47m in new equity.