Baillie Gifford’s high-flying flagship fund, the £20 billion Scottish Mortgage Investment Trust plc, announced it has raised a further £200 million by issuing two long-term, fixed rate, senior, unsecured private placement notes.

The closed-end fund said the new funding will enable its managers to invest more in the trust’s global portfolio of companies.

FTSE 100 constituent Scottish Mortgage is the UK’s biggest conventional investment trust and is currently the biggest listed company run from Scotland when measured by stock market value with a market capitalization of around £19.4 billion.

Perth-based SSE has a stock market value of almost £17 billion, while NatWest-RBS has been run from London for several years.

“As Scottish Mortgage’s assets have grown, the board has increased the absolute level of the borrowings for the company in order to maintain what it believes to be the appropriate level of gearing of the portfolio,” said Scottish Mortgage.

“In line with the gearing policy and guidance provided in the company’s annual report, the board remains committed to the strategic use of borrowings for the company in this way, with the aim of enhancing returns to shareholders over time, in line with Scottish Mortgage’s distinctive investment philosophy and disciplined long-term approach.”

Banco Santander S.A. London acted as the placement agent for the transaction. The first note issued is a 15-year note for £100 million with a fixed coupon of 2.03% and the second is a 25-year note for £100 million with a fixed coupon of 2.30%.

Scottish Mortgage corporate strategy director Catharine Flood said: “Over the last decade, Scottish Mortgage’s portfolio has included many companies positioned well for the long term shifts in the way we live, work and travel, benefitting from the explosion of social media, online shopping and electric transport.

“The computing power behind this disruption is accelerating and now reaching other industries where we expect the advances to be even larger and more meaningful — such as healthcare, transport, space exploration and biological manufacturing.

“The exciting progress we are seeing is reflected in the changing shape of our portfolio.

“Today we no longer invest in Alphabet or Facebook, and Illumina and Moderna are our two largest holdings, rather than Amazon or Tesla.

“Raising new capital at this point allows us to back more of the next generation of innovative companies without having to sell current investments which we continue to find attractive.

“The new funding allows the managers to invest more in the portfolio, with the aim of enhancing long-term returns for shareholders.”

Scottish Mortgage senior independent director Justin Dowley said: “I am pleased to report that once again the company has issued long-term private placement debt at attractive rates.

“The ability to raise long-term capital in this way to invest in the outstanding growth companies in the portfolio should enhance the returns for our shareholders over the coming decades.

“The board continues to view the capacity to do this as one of the significant advantages of Scottish Mortgage’s investment trust structure.

“The board wishes to thank Baillie Gifford, Santander and others for their diligence and hard work on this.”

On May 13, Scottish Mortgage said it produced its strongest ever return in the year to March 31, with its share price soaring 99% in the period and net asset value (NAV) total return rising 111% versus the 39.6% return of its benchmark, the FTSE All-World Index.