<\/p>\n
Trust manager Tom Slater (pic: Terry Murden \/ DB Media Services)<\/p>\n
Scottish Mortgage Investment Trust, which has backed companies such as Tesla and Nvidia, wants to put more money into private companies.<\/p>\n
The Bailie Gifford managed trust is seeking shareholder permission to amend its investment policy.<\/p>\n
It wants additional authority to invest up to \u00a3250 million in private companies, which currently exceeds the 30% limit on its total assets as a result of share buybacks and the rising value of private investments, including SpaceX, its biggest.<\/p>\n
As announced in December, the valuation of SpaceX, was adjusted upwards significantly. This meant SpaceX represented a materially larger proportion of the company\u2019s total assets as at 31 December 2025 (15.1%) compared with 8.2% just a month earlier.<\/p>\n
Dan Coatsworth, head of markets at AJ Bell, comments:\u00a0\u201cScottish Mortgage\u2019s\u00a0strategy is to identify tomorrow\u2019s market leaders and inevitably that means hunting for opportunities among private companies. <\/p>\n
\u201cIt tries to get in before the crowd\u00a0and back businesses through additional funding rounds.\u00a0<\/p>\n
\u201cThere are typically cycles with private investments, where investors either love or hate them.\u00a0For example,\u00a0growth-style investment trusts such as Scottish Mortgage suffered from the spike in inflation and interest rates\u00a0four years ago and\u00a0high-growth\u00a0quoted\u00a0tech company valuations were hit. <\/p>\n
\u201cThat\u00a0led to its private holdings becoming a bigger component\u00a0of its portfolio, much to the concern of investors and analysts who\u00a0worried about the lack of transparency in private markets. Valuation updates can be irregular and\u00a0it\u2019s often hard to know what\u2019s going on with private businesses.\u00a0<\/p>\n
\u201cInterest in private companies is now picking up again thanks to SpaceX\u2019s chunky valuation and AI success with Anthropic and OpenAI \u2013 with all three companies expected to join the stock market over the next year.<\/p>\n
\u201cInvestors might be asking\u00a0Scottish\u00a0Mortgage who\u2019s the next big thing after this trio, so it\u00a0makes sense that the trust wants\u00a0greater flexibility to go and hunt for opportunities.\u00a0Many promising tech firms are staying private for longer\u00a0and\u00a0Scottish Mortgage\u00a0needs\u00a0to look beyond equity markets\u00a0for tomorrow\u2019s potential\u00a0champions.<\/p>\n
\u201cHowever,\u00a0the issues around a lack of transparency, irregular valuation updates, and liquidity, haven\u2019t gone away with regard to private companies. <\/p>\n
\u201cThat\u2019s perhaps why Scottish Mortgage is only asking for a relatively small\u00a0change to its investment policy rather than asking investors if it can go big.\u00a0<\/p>\n
\u201cIf SpaceX\u2019s IPO does go ahead as expected, Scottish Mortgage would suddenly have a lot less exposure to private markets as Elon Musk\u2019s rockets-to-satellites group\u00a0currently represents a hefty chunk of its private positions.\u201d<\/p>\n
The proposal will be considered at a general meeting of shareholders on 10 April.<\/p>\n
\t #Scottish #Mortgage #invest #private #firms #Daily #Business<\/p>\n","protected":false},"excerpt":{"rendered":"
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