The board of Edinburgh-based fund manager Baillie Gifford’s flagship fund — the Scottish Mortgage Investment Trust company — plans to limit to 25% the amount of the fund’s assets invested in companies not listed on a public market.

The 107-year-old global fund’s investments in private or unquoted companies has risen steadily over the past few years and was around 12% of its portfolio at March 31.

Scottish Mortgage chairman John Scott said the fund’s board supported its fund managers in their belief that investments in unquoted companies “are entirely consistent with their investment philosophy.”

However he said that now was “an appropriate moment to provide clarity for shareholders on the maximum level such investments might reach over time.”

The statement confirms and elaborates on an indication from Scottish Mortgage last month that it intended to amend its investment policy regarding unlisted companies.

A resolution will be tabled at the closed-end fund’s annual general meeting on June 30 “to stipulate that the maximum amount which may be invested in companies not listed on a public market shall not exceed 25 per cent of the total assets of the company …” said Scott as the fund published annual results.

“Currently, whilst Scottish Mortgage’s investment policy specifically lists ‘unquoted entities’ amongst the permissible investments, there are no formal parameters set out with regard to such,” said Scott.

“Given the rising level of these investments within the Scottish Mortgage portfolio and the changing nature of the investment opportunities being seen by the managers, the board is of the view that this is an appropriate moment to provide clarity for shareholders on the maximum level such investments might reach over time.”

Scott continued: “Historically, the board has provided guidance to the managers on the appropriate maximum level for such investments within the portfolio; this guidance has been reviewed and it is now proposed to adapt it to reflect developments in the corporate funding markets, whereby emerging companies are able to finance themselves for much longer before coming to public markets.

“The board believes this shift in the functioning of capital markets is likely to persist, rendering the flexibility to undertake investments ahead of public offerings of increasing importance for growth investors across the world.

“The board supports the managers in their belief that investments made in the unquoted companies within the portfolio are entirely consistent with their investment philosophy and recognises that the managers are agnostic as to whether a company chooses to remain private, or list on a public market.”

The other directors of Scottish Mortgage are listed as Fiona McBain, chief executive of Scottish Friendly Assurance; professor John Kay; former Bank of Scotland finance director Gordon McQueen; Paola Subacchi, Director of International Economics Research at Chatham House in London; and former investment banker Justin Dowley.

McQueen will soon stand down after more than 15 years on the board, and professor Patrick Maxwell, Regius Professor of Physic at Cambridge University, was appointed to the board at the start of the current financial year.

Scottish Mortgage’s results list £3.92 billion of “investments held at fair value through profit or loss.”

Among the fund’s biggest investments are a £330 million stake in online retailer Amazon.com, a £291 million stake in biotechnology equipment firm Illumina, £231 million in clothing retailer Inditex, £228 million in search engine Baidu, £190 million in internet services firm Tencent Holdings, £185 million in electric car firm Tesla Motors, £179 million in Facebook, £164 million in online retailer Alibaba Group, £155 million in Alphabet (formerly Google), £87 million in engineeering firm Atlas Copco, and £86 million in luxury goods firm Kering.

About 46.4% of the fund’s investments are in North America, 18.6% are in the Eurozone, 16.9% are in China, 8.6% are in the UK, 5.8% are in “developed” Europe outside the Eurozone, and 1.7% are in India.

Baillie Gifford manages total assets of £124 billion.