Notice of amendment to investment policy

RNS Number : 2783W

Scottish Mortgage Inv Tst PLC

26 April 2016

 

Scottish Mortgage Investment Trust PLC

26 April 2016
 

The level of the investments in private or unquoted companies within Scottish Mortgage Investment Trust's portfolio has been rising over the past few years. This trend was highlighted in the Half-Yearly Report to 30 September 2014 and the investment case for holding such companies within the Scottish Mortgage portfolio, as well as the reasons why the Board believes the Managers have a competitive advantage in investing in this area, were set out in more detail in the Interim Report to 30 September 2015.

Whilst Scottish Mortgage has long been able to make investments in private companies, the increase in the level and number of such unlisted investments within the portfolio in recent years has been in direct response to a shift in the balance within the capital markets between the providers and consumers of capital, rather than a change in the Managers' investment philosophy and approach. The Managers remain committed long term investors in strong growth companies. In order to maintain the breadth of their investment opportunities, the Managers have sought to utilise the flexibility of the closed ended capital structure of Scottish Mortgage to invest in a number of private companies, in the belief that this will provide them with a greater opportunity to continue to deliver long term returns for shareholders in the future.

The Board believes this shift in the dynamics within the capital markets is likely to persist for some time, rendering the flexibility to undertake such investments of increasing importance for growth investors across the world. Currently, whilst Scottish Mortgage's investment policy specifically lists "unquoted entities" amongst the permissible investments, there are no formal parameters set out with regard to such. Given the rising level of these investments within the Scottish Mortgage portfolio and the changing nature of the investment opportunities being seen by the Managers, the Board is of the view that this is an appropriate moment to provide clarity for shareholders on the maximum level such investments might reach. 

As such, subject to prior approval from the Financial Conduct Authority, the Company intends to seek shareholders' approval, at the Scottish Mortgage Annual General Meeting on 30 June, to amend the Company's investment policy to stipulate that the maximum amount which may be invested in companies not listed on a public market shall not exceed 25 per cent of the total assets of the Company, measured at the time of purchase.

- ENDS -

For further information please contact:

Catharine Flood, Baillie Gifford & Co
Tel: [phone]

[e-mail] 

James Budden, Baillie Gifford & Co  
Tel: [phone] or 07507 201208

[e-mail] 

Roland Cross, Director, Four Broadgate
Tel: [phone]
[e-mail] 

 

Scottish Mortgage Investment Trust PLC

LOW COST, GLOBAL INVESTMENT TRUST

Scottish Mortgage is an actively managed, low-cost investment trust, investing in a high conviction global portfolio of companies with the aim of maximising its total return over the long term. The managers look for strong businesses with above-average returns and aim to achieve a greater return than the FTSE All-World Index (in sterling terms) over a five year rolling period.

The trust has a long term investment horizon and invests with real patience. The portfolio is driven by corporate attraction rather than index construction. The managers see themselves as owners of companies rather than renters of stocks.

The resolutely global approach taken by the trust is reflected in the current investment themes such as the speed of technological advances and how they can disrupt established business practices, and the re-emergence of China as an economic superpower.

As at 31 March 2016, Scottish Mortgage had total net assets of more than £3 billion, making it one of the UK's largest investment trusts. For further information on the Trust, please visit our website www.scottishmortgageit.com . The full portfolio listing for Scottish Mortgage is available at https://www.bailliegifford.com/individual-investors/funds/scottish-mortgage-investment-trust/performance/portfolio/

The investment trusts managed by Baillie Gifford & Co Limited are listed UK companies. The value of their shares, and any income from them, can fall as well as rise and investors may not get back the amount invested.

Scottish Mortgage is an investment company within the meaning of section 833 of the Companies Act 2006. Registered in Scotland. Registered number: SC489. Registered office: Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN.

 

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