Baillie Gifford assets fall 30% to £239bn in sell-off

Baillie Gifford

Edinburgh-based investment giant Baillie Gifford revealed on Tuesday that its assets under management and advice have fallen more than 30% to £239 billion since the start of 2022 amid the brutal global sell-off in technology and growth stocks, which feature heavily in the fund management group’s portfolios.

Baillie Gifford had previously reported assets under management and advice of $455 billion — roughly £365 billion — as of December 31, 2021.

A number of high flying funds and investment trusts managed by Baillie Gifford came back down to earth with a bang in the first quarter of 2022, according to recent research by Salford-based investment platform AJ Bell.

The Salford firm said on April 4 that Baillie Gifford’s flagship fund Scottish Mortgage saw a fifth of its value wiped out in the first quarter but that “the trust’s long-term performance is still exceptional.”

Scottish Mortgage’s share price almost tripled during 2020 and 2021 from around £5.80 to over £15, but it has since dropped nearly 50% to around £7.88.

AJ Bell said the Baillie Gifford funds that took a hit in the first quarter included Baillie Gifford British Smaller Companies (-21.3%), Baillie Gifford American (-22.9%), Baillie Gifford European (23.2%), Scottish Mortgage Ord (-21.6%) and Baillie Gifford European Growth Ord (-25.9%).

Laith Khalaf, head of investment analysis at AJ Bell, wrote: “Baillie Gifford also finds an uncharacteristically large number of its fund range populating the bottom of the performance tables.

“These hitherto high flyers have been laid low by a sell-off in technology and growth stocks, which feature heavily in Baillie Gifford portfolios.

“This includes the largest UK investment trust, Scottish Mortgage, which saw a fifth of its value wiped out in the first quarter.

“That’s actually after a rally in the last month or so, before which, the investment trust was nursing year to date losses of around 35%.

“The trust has a very risk hungry approach to investing, so big drawdowns are part and parcel of what investors can expect from Scottish Mortgage.

“The trust’s long-term performance is still exceptional, though it has been riding on a tailwind of stellar growth from tech stocks, and could face more challenging times if that goes into reverse.”

The update on the Edinburgh fund company’s assets on Tuesday came in the first-half results of the Baillie Gifford European Growth Trust, which has assets of £461 million.

Over the six months to March 31, the Trust’s net asset value per share (NAV) total return was -24.7% compared with a total return of -5.2% for the FTSE Europe ex UK index.

The Trust’s share price total return for the same period was -28.8%.

“Over the 28 months to 31 March 2022, being the period under the management of Baillie Gifford, the company’s NAV total return was 27.0% compared with a total return of 15.8% for the FTSE Europe ex UK index, in sterling terms,” said the Trust.

“The share price total return for the same period was 29.7% …

During the six month period four new positions were taken (tonies, McMakler, Topicus.com and Embracer) and seven existing positions were added to (Aker Horizons, VNV Global, Allegro, Prosus, Just Eat Takeaway, Wizz Air and Delivery Hero) …

At the AGM shareholders approved an increase in the maximum amount that may be invested in unlisted investments, from 10% to 20% of total assets …

“Invested gearing stood at 11.1% at the end of the period.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.