Baillie Gifford’s $1.3 billion Schiehallion Fund said its net asset value (NAV) returned 12.9% and its share price returned 51% in the year to January 31, 2025.
The fund’s share price discount to NAV narrowed from 39.6% to 19.2%.
Schiehallion Fund seeks to generate capital growth for investors through long-term minority investments in later stage private businesses that the fund considers to have transformational growth potential and to have the potential to become publicly traded.
“The company enjoyed a particularly strong final quarter of its financial year, driven in part by a significant valuation uplift in its largest holding, SpaceX, as well as notable share price increases among public holdings, Affirm, Wise and Warby Parker, over this three-month period,” wrote Schiehallion Fund managers Peter Singlehurst and Robert Natzler.
“Performance for the full twelve-month period to 31 January 2025 was similarly driven by a combination of valuation increases in private holdings and positive share price movements among selected public holdings.
“In this regard SpaceX (+86% valuation increase) continues to showcase remarkable operational progress – most strikingly through the mechanised capture of its giant Starship booster rockets in recent months.
“Other notable private contributors to performance included Italian digital consumer application acquirer, Bending Spoons (+89%), and the Chinese social media giant, ByteDance (+33%).
“Among the public holdings, the US point-of-sale credit provider, Affirm (+51%), was also a top five contributor to Company performance as it continues to expand its offering, most notably into the United Kingdom.
“The largest detractors from NAV performance over the period were German online real estate platform, McMakler, and Swedish electric vehicle battery maker, Northvolt. Both holdings saw their valuations close to fully written down during the period.
“In the case of McMakler, the company has been facing a challenging German macroeconomic environment which has particularly affected the real estate market. This necessitated a recapitalisation of the business during the second half of the year, with the focus directed towards cost management in the pursuit of profitability. Northvolt has experienced significant operational challenges with regards to scaling manufacturing across its facilities.
“This, coupled with increased competition from China and a slowdown in electric vehicle demand more broadly, led to the company filing for Chapter 11 bankruptcy in the US during the fourth quarter of 2024. Other detractors to performance included financial solutions provider, Brex (-30% valuation decrease), Australian online pet supply company, Pet Circle (-44%) and German bus and train operator, Flix (-27%).”