Baillie Gifford’s flagship investment trust company, the £15.2 billion Scottish Mortgage fund, will ask shareholders at a General Meeting on April 10 for approval to amend its investment policy for “additional private investment capacity of up to £250 million.”
Scottish Mortgage said: “The proposed change would grant the board limited additional flexibility to permit the managers to make a small number of both follow-on and new investments in private companies where the aggregate amount invested in private companies exceeds the 30% limit.
“Scottish Mortgage’s existing policy caps investment in private companies at 30% of total assets, measured at the time of purchase.
“However, the level of private company exposure is driven by various factors, including those not in the company’s control, such as quoted valuations of public investments, revaluations of private companies, such as the uplift in SpaceX’s valuation in December 2025, and share buybacks, which can push the portfolio’s private exposure close to, or beyond, this threshold even without new investment.
“When this happens, the managers are constrained from supporting existing private holdings through follow-on funding rounds or from taking advantage of compelling new opportunities.
“To address this, the board is seeking approval to introduce an Additional Private Investment Capacity of up to £250 million, subject to appropriate governance and oversight.
“This flexibility would allow the board to exercise its discretion to permit the managers to make a small number of both follow-on and new investments in private companies until the portfolio’s private exposure naturally moves back below the 30% limit.”
Scottish Mortgage manager Tom Slater said: “Our role is to be patient, long-term partners to exceptional private companies as they continue to scale. From time to time, market movements can restrict our ability to make further investments in private companies.
“This proposal gives the board additional flexibility to act in shareholders’ long-term interests by permitting us to support our private holdings when it matters most, while remaining selective about new opportunities.”
Scottish Mortgage said this proposal follows consultation with a broad range of shareholders. From the 2027 AGM onwards, shareholders will vote annually on whether to renew this additional flexibility.
“The amendment to the investment policy does not expand the managers’ discretionary authority; the existing 30% limit on investments in private companies, measured at time of purchase, would continue to apply,” said Scottish Mortgage.
“Since 2012, Scottish Mortgage has invested £4.9bn in 102 private companies, 40 of which have subsequently listed.
“Private companies choose their shareholders and access is dependent upon relationships and reputation. Scottish Mortgage shareholders benefit from this access without paying fees normally associated with private equity funds.
“Scottish Mortgage has bought back shares for a value of approximately £3 billion across 2024 and 2025. This buyback activity had a positive impact on the company by limiting discount volatility, creating meaningful accretion to net asset value, maintaining a stable shareholder register and narrowing the discount.
“However, such buybacks have been predominately funded by selling public company securities and therefore increased the portfolio weighting to private companies.”