B Gifford trims Tesla stake, vows to invest for years

James Anderson of Baillie Gifford. Picture by Matt Marcus.

By Mark McSherry

Baillie Gifford, Tesla’s largest outside shareholder, said on Wednesday it has been forced to trim its position in the electric vehicle maker because Tesla’s spectacular share price rise in the past 12 months has made the stock too big an influence on the fund company’s holdings.

It is estimated the move has generated profits of about $17 billion for Baillie Gifford funds.

The Edinburgh investment giant’s funds now hold about $20 billion of Tesla stock.

Baillie Gifford fund manager James Anderson said the firm intends to remain a significant shareholder in Tesla for “many years” and that “should there be serious setbacks in the share price we would welcome the opportunity to once again increase our shareholding.”

A filing with the Securities and Exchange Commission on Wednesday showed that Baillie Gifford now owns under 5% of Tesla, down from around 6.3%.

At one stage, the Edinburgh fund manager owned 7.7% of Tesla.

“Baillie Gifford’s shareholding in Tesla has dropped below five per cent at the end of August, therefore it is required to disclose this information to the U.S. Securities and Exchange Commission (SEC),” said the Edinburgh firm, which has assets under management and advice of more than £260 billion.

“It submitted this filing earlier today.”

Anderson said: “The substantial increase in Tesla’s share price means that we needed to reduce our holding in order to reflect concentration guidelines which restrict the weight of a single stock in clients’ portfolios.

“However, we intend to remain significant shareholders for many years ahead.

“We remain very optimistic about the future of the company.

“Tesla no longer faces any difficulty in raising capital at scale from outside sources but should there be serious setbacks in the share price we would welcome the opportunity to once again increase our shareholding.

“We are privileged to have been Tesla’s largest external shareholder over a critical period for the development of the company.

“We are immensely grateful for the extraordinary efforts and achievements of Tesla in driving forward a transportation and energy revolution in the face of persistent scepticism and often downright hostility.

“Without Tesla’s efforts the possibility of averting climate disaster would have been significantly reduced. 

“In our view the underlying purpose of providing equity capital at scale is to try to assist in mitigating, and hopefully solving, the most serious problems the world faces.

“For sure, we and our clients are extremely happy with the progress of the share price but we see this as but a reflection of the ultimate objective.”

Morningstar’s latest fund flow numbers showed Baillie Gifford was the most popular asset management firm in July, attracting £991 million of new money during the month — its highest ever total in a single month. 

Baillie Gifford’s high-profile funds are major shareholders in prominent global companies including Tesla, Amazon, Tencent, Netflix and Alibaba. 

Hargreaves Lansdown said six of its top-selling funds in July were run by Baillie Gifford.

Baillie Gifford employs about 1,300 people and is headquartered in Edinburgh with offices in Buenos Aires, Dublin, Frankfurt, Hong Kong, Krakow, London, New York, Shanghai, Toronto and Zurich.