Another of Scottish Mortgage’s unquoted holdings Palantir Technologies is set to go public in a second win for the £14bn investment trust this week.
News of the firm’s listing came hours after Scottish Mortgage’s largest unquoted holding Ant Group announced plans to float on the Hong Kong and Shanghai stock exchanges in a move that would value the company between $200bn and $300bn. Analysts have said that IPO would boost sentiment towards the investment trust’s unlisted holdings.
Palantir, which was founded by Peter Thiel and provides mountains of data to government agencies, law enforcement and the US military, filed a prospectus with the US Securities and Exchange Commission to take the company public on Tuesday.
The secretive software company’s Wall Street listing, which had been expected for some time, will see Palantir follow in the footsteps of Spotify and Slack by pursuing a direct listing as opposed to a traditional IPO. This means the company will not issue new shares upon listing, but existing shareholders can sell stocks on the first day of trading without the lock-up period of an IPO.
Scottish Mortgage owned a 0.3% position in Palantir at the end of March, according to the trust’s last annual report, which it valued at £26.5m, up from £23.3m the year prior.
However, a Baillie Gifford spokesperson confirmed this has since gone down to 0.2% of NAV.
Since purchasing the stock in 2014 it has generated annual returns of –3.5% for the trust. James Anderson’s (pictured) £14.0bn trust is the only Baillie Gifford fund with exposure to Palantir.
See also: Scottish Mortgage’s unquoted exposure scrutinised ahead of AGM vote
Last September Reuters reported Palantir was targeting a valuation of $26bn or more. It was valued at around $20bn in its last private fundraising round in 2015.
Palantir revealed in the SEC filings that revenue grew to $742.6m from $595.4m in 2018 but that it had lost $580m last year.
UBS and Japanese insurance giant revealed as major shareholders
The documents filed with the SEC provide an unprecedented glimpse into Palantir’s corporate structure and largest shareholders.
The company has a three-tier share structure made up of Class A, Class B and Class F shares which carry different voting rights. Founders Thiel, Alex Karp and Stephen Cohen are equal owners of a trust that holds all the Class F shares giving them 49.999999% of the total voting power, ensuring they maintain control even if their stake diminishes over time.
The trio owned 30.2% of the stock as at the end of July though the actual size of Thiel’s stake is much larger as he owns controlling stakes in several investment firms which are also listed on the shareholder register, including the Founders Fund which owns 12.7% of Class B shares.
Japanese insurer SOMPO Holdings and investment bank UBS also appear on the register, owning 20.3% and 5.7% of Class A shares respectively.
Last year The Sunday Times revealed oil giant BP also had a secret stake in the business.
Palantir is one of Silicon’s Valley most controversial companies and has come under fire for upgrading software for American immigration authorities used in tracking people for deportation. Its technology has been used to combat human trafficking and most recently by the White House to track coronavirus infections.
