Scottish Mortgage investors take profits from SpaceX – Daily Business

SpaceX was spotted years before it came to market

Shareholders in Scottish Mortgage Investment Trust have cashed in on its early support for SpaceX following the US tech firm’s mammoth flotation in the summer.

The FTSE 100 trust, managed by Baillie Gifford, took advantage for profit taking when the window opened for the sale of shares. It currently holds 11.1% in Elon Musk’s company from 15% at the end of September.

The trust invested in SpaceX seven and a half years before the IPO and in a statement with half-year figures chairman Christopher Samuel noted how it is an example of “what makes Scottish Mortgage distinctive”.

Total net asset value return was 31.5%, compared with 16% for the FTSE All-World Index. The share price total return was 33.8%.

Speaking about the investment in SpaceX, Mr Samuel said: “The managers deserve considerable credit for recognising its potential before it was publicly traded and for sustaining their conviction as the business developed.

“Equally, the decision to reduce the position following its flotation, while retaining a substantial investment, demonstrates the importance of balancing conviction with disciplined portfolio management.”

Mr Samuel also noted other stocks in the portfoliom including drugs firm Moderna. Its progress during the period also “demonstrated how patience can be rewarded, reinforcing the importance of giving promising businesses the time they need to realise their potential.”

He also mentioned Anthropic which “highlights a different strength of Scottish Mortgage’s investment approach: the ability to gain exposure to exceptional businesses before they reach public markets. This access remains a distinctive feature of the company’s investment approach, expanding the range of opportunities available to shareholders.”

At the General Meeting in April a targeted change to the investment policy was approved with up to £250 million added for private-company investments. This enabled the managers to add to the company’s investment in Anthropic in May.

Following SpaceX’s flotation, private companies represented 24.9% of the company’s total assets at 30 September. The additional capacity remains subject to defined limits and Board oversight.

The discount to NAV at 30 September was 7.9%, compared with 9.5% at 31 March.

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