By Mark McSherry
Edinburgh-based investment giant Baillie Gifford said on Friday that star fund manager James Anderson will leave the firm on April 30, 2022, after nearly four decades at the asset manager and will step down as joint manager of the high-flying Scottish Mortgage Investment Trust plc.
Anderson will retire from the Baillie Gifford partnership.
“On 29 April 2021, James will be nominated to stand as non-executive chairman of the Swedish investment company Kinnevik AB, a company quoted on the Nasdaq Stockholm Stock Exchange, which is currently held in Baillie Gifford’s client portfolios,” said the Edinburgh firm.
“If appointed, James would recuse himself from any investment discussions and decisions about Kinnevik and its underlying investments, while he remains a Baillie Gifford partner.”
Kinnevik’s shareholders include Sweden’s wealthy Stenbeck family. Baillie Gifford funds own almost 9% of Kinnevik’s capital.
Scottish Mortgage is now the UK’s largest investment trust — and a FTSE 100 constituent — and has enjoyed huge success in recent years as a major shareholder in many prominent global companies including Tesla, Amazon, Illumina, Tencent and Alibaba.
Scottish Mortgage, a closed-end fund, has about £17 billion in net assets and is currently Scotland’s largest listed company with a stock market value of about £16 billion.
John Moore, senior investment manager at Brewin Dolphin, said Anderson is one of the “best fund managers of his generation” and someone who “returned Scottish fund management and the investment trust industry to the spotlight for all the right reasons.”
Baillie Gifford is headquartered in Edinburgh with offices in Buenos Aires, Dublin, Frankfurt, Hong Kong, Krakow, London, New York, Shanghai, Toronto and Zurich. It has £326 billion in assets under management and advice.
Andrew Telfer, joint senior partner of Baillie Gifford, said: “James has been central to the strategic leadership and growth of Baillie Gifford.
“He has encouraged us to be ambitious as a firm and has instilled a long term, global and index-agnostic approach to our investing.
“And, most importantly, James has achieved remarkable investment returns for our clients. We are giving our clients a year’s notice that he is leaving the firm.
“Our transition process is tried and tested over generations, and we have developed talented successors in each of James’s teams in recent years.”
Anderson joined Baillie Gifford in 1983 and became a partner four years later. He led Baillie Gifford’s European Equity Team and after this co-founded the Long Term Global Growth Strategy in 2003.
Anderson also chaired the firm’s International Growth Portfolio Construction Group from its inception in 2003, until two years ago.
He has been manager of Scottish Mortgage since 2000 and, since 2015, joint manager with Tom Slater.
Slater will continue as manager of Scottish Mortgage when Anderson retires and Lawrence Burns will become deputy manager of the trust with immediate effect.
“I have huge admiration for Tom and Lawrence,” said Anderson.
“They are both thoughtful, dedicated and ambitious investors with a willingness to learn and an outstanding ability to partner with great companies. I couldn’t be happier than to have them as my successors.”
Scottish Mortgage chair Fiona McBain said: “His (Anderson’s) approach of identifying and holding transformational growth companies has helped drive economic progress and delivered exceptional returns for shareholders.
“James has also pioneered our investments in private companies, one of the trust’s most important strategic initiatives to date.
“James and Tom constantly seek to observe, learn and improve.
“This has resulted in an investment philosophy that will continue to evolve.
“I and my fellow directors look forward to working with James, Tom and Lawrence over the coming year, and with Tom and Lawrence after that.”
Ryan Hughes, head of active portfolios at Salford-based investment platform AJ Bell, said: “News that James Anderson is stepping down as joint portfolio manager on the Scottish Mortgage investment trust will potentially cause some worry to the thousands of investors who have made fantastic returns over many years.
“However, it’s important to remember how Baillie Gifford work with the investment process being firmly embedded in the team-based approach and experienced investor Tom Slater remaining at the helm.
“With Anderson not stepping back for over a year, this has been well planned with a clear handover process for Lawrence Burns to become deputy manager on the trust to support Slater.
“Anderson has helped build Scottish Mortgage into a phenomenal investment trust over many years with his clear, high conviction approach being a driving force behind its willingness to invest in early stage companies and hold them while they become global winners with Amazon, Tesla and Alibaba all being great examples.
“Since being appointed manager on the trust on the 1 April 2000 he has delivered a staggering 1,700% returning, equivalent to turning a £1,000 investment into £18,000 compared to just £4,440 if invested in the FTSE All World benchmark.
“These returns have propelled the trust into the FTSE 100, remarkably making it the 31st biggest company in the market.
“For investors, while this announcement may be unsettling, the strength of the team-based approach, long handover period and continuity through Tom Slater shouldn’t result in major concerns.
“Slater has worked at Baillie Gifford for over 20 years and been a manager on the trust for the last 10 years ensuring that he knows the portfolio inside out.
“As a result, I expect no change to the approach which should hopefully give investors reassurance that the investment process will remain intact.”
Anders Oscarsson, chairman of the Kinnevik nomination committee, said: “Last year, my colleagues and I set out to reshape the board of Kinnevik, primarily focusing on recruiting individuals who represent innovative and global investment excellence.
“The timing has been fortuitous for us as shareholders.
“This morning it was announced that James Anderson will be leaving Baillie Gifford next April 2022 after what will have been an extraordinarily successful 39 year career with the firm.
“In parallel, we are proud that James has accepted to stand as chairman of Kinnevik already this year while he makes his transition.”
Reflecting on Anderson’s long-term partnership with Kinnevik over the last seven years, Cristina Stenbeck said: “During our time serving together on the nomination committee since 2014, we have come to know James as the thoughtful individual responsible for building a sizeable ownership stake in Kinnevik.
“Today the Baillie Gifford clients own more than 27m shares and it is our understanding from our discussions with James during the recruitment process that it will be with the same bold and unwavering conviction that he and his team allocated capital into Kinnevik that he will soon lead the board’s strategic and oversight work.”
Anderson said: “I feel very fortunate to be nominated as the potential chair of Kinnevik.
“I have long admired the company as a great exemplar of a patient, committed and quintessentially Swedish investment style.
“Kinnevik’s leadership has already made great strides towards embracing the abundant growth investments available given the repute it rightly enjoys and the permanent capital it can provide.”
Anderson added: “I am deeply grateful to have had the opportunity to discuss the role of chair of Kinnevik with Anders and the whole nominations committee.
“If appointed, I would be thrilled to accept the role and work with the board to try our utmost to build on the historic role and current successes of the company, its management and its many supporters.”