00:13:59 · Peter Singlehurst
So you do see some of that in the secondary markets. There is more liquidity in the secondary markets, and some of that's good. Like, it it can be useful for investors to be able to add to or reduce positions in secondary markets. But what's not good is where you see investors coming into the secondary markets, trying to get access to brand name companies where they don't know the management team, they've not spent time with them, they don't have access to financials, they're and just kinda waiting to pay whatever valuation that that, yeah, that... That's out there. That is worrying. But, like, what sits behind that? Well, what sits behind that is there's a cohort of amazing companies that only a very small number of institutions and investors can get access to. Like, we're fortunate enough to be one of those. We're fortunate enough to be one of those because we've been doing this for as long as this part of the market has existed. But I do believe it's right that ordinary savers should be able to get access to these companies. Like, it's... Tesla creates a lot of wealth for ordinary investors. SpaceX, it's been much more difficult for those ordinary investors to get access to these kind of companies. And so part of what we've tried to do is give ordinary investors access to those kind of companies, and we do this from within these investment trust structures that I mentioned. So the fund that we started doing that for was a fund in The UK called the Scottish Mortgage Portfolio. It's a 15 or so billion dollar fund, but quite quite quite on that number. It might be a little bit off. And north of 30% of that fund is invested in private companies. In 2019, we launched a dedicated fund called the Schiehallion Fund, which today, it's just shy of $2,000,000,000 in net asset value. Anybody can go and buy shares in that company, and they can get access to SpaceX, ByteDance, Bending Spoons, Databricks, Stripe, Anduril. Like, I could go on. You can get access to those companies, you know, for as little as $2 if they wanna buy a share. Very low management fees on that vehicle. Free freely tradable on the London Stock Exchange.
00:15:59 · Peter Singlehurst
And so, yeah, we found ways actually to sort of democratize access to some of these companies, but still do it in such a way where there is, you know, a high level of due diligence that goes into these companies where we are underwriting these companies with full information rights, full access into management. And so individual investors don't have to make spurious decisions about, hey. Well, I'm just gonna buy something in an SPV, and I've got no idea what it is. They know that what's going into the Schiehallion Fund or or Scottish Mortgage has been underwritten to the highest level of sort of, you know, professionalism and and experience from doing growth equity investing for over
00:16:38 · Guillaume Moubeche
[00:16:38] S1: a hundred years. And I I 100%, like, agree with what you're saying and the fact that you as like, you know, an investor with knowledge, with access to the information, you can make like this wise decision and, you know, invest globally, have like this also like portfolio kind of mindset. So you have like a... I mean, the risk is not only on one single asset. However, don't you think that from a psychological perspective, I feel like investing in companies for many people is a bit like, you know, like buying a specific asset. So, I mean, in your case, whenever you buy into a fund and I've invested, you know, like in in many funds, it's it's... Yeah. It's like I'm putting my money, I'm expecting a return and that's it. There is no real like emotional connection. So if the fund invests in an asset, I don't really feel like I own that asset even though I'm investor in a fund. However, if I, like, invest directly into, like, Anthropic, SpaceX, Stripe, whatever, you know, when I'm at dinners and people say, hey, like, what's the latest investment? You know, it's... It it becomes something linked to your status. And I think that what's make people feel good about investing because the moment something becomes a status, you know, it's like the same for people, you know, who love to buy fancy watches or whatever. It's it's become something they are pride... Proud of. And I think like investing in the next companies is something like quite excited for many. So have you ever thought of it? And is it something you think of from time to time? Like, hey, couldn't we maybe have like vehicles that are probably much cleaner than anything you could find on the market with third layers of whomever taking, like, fees on fees, etcetera, etcetera, and just have, you know, like, the the people investing a little bit more involved directly in a single asset.
00:18:40 · Peter Singlehurst
[00:18:40] S0: Yeah. I I suppose in a way what you're alluding to there is that we we talk about investing as if it's one thing, but maybe it's two things. You know, on the one hand, maybe it's everything that you're talking about there, which is, you know, the the excitement of it, the thrill of it, the status of it. And then there's another thing which is solely focused on trying to make high returns over the long term. And sometimes those things can be the same thing, and other times they can be very, very different. We're firmly focused on the latter. And to your question about sort of single asset vehicles and dedicated exposure to individual companies, I mean, this is something that we do for our institutional clients through the coinvests that we offer. And there, again, you're facing off with sort of professional institutions who have diversified portfolios, who can take very informed, again, understanding with information about what to invest in. And so there, we will kind of offer that kind of single asset exposure. Whilst I think there's a lot to be said for the the... That kind of first use case that we're talking about, the individual kind of excitement and and sort of pride of owning particular companies, that can also be quite ephemeral. So the company that can be the pride of everybody's portfolios today can very quickly fall out of favor for reasons that can actually have nothing to do with how the company is performing. And so I think that can be a little bit sort of more easy come, easy go, shall we say. And whilst I'm sure there are investment houses that will happily cater to that, I think one of the reasons that we've been able to survive as an institution for so long is because we focus on that camp of just trying to earn really high returns over the long term. And if people want access to our capabilities, they can absolutely do that in our funds, and we would hope that they would take pride in owning the funds and owning the underlying assets that sit beneath the funds, which are, you know, very much there to give them exposure to these companies, to enable them to make a lot of money over the long term if we do a good job for them. But I don't think you would see us chasing, the sort of, heat and excitement around particular areas unless we had very strong conviction that something was gonna be a great investment.
00:20:51 · Peter Singlehurst
And then you would see us express that through a large position in our portfolios.
00:20:56 · Guillaume Moubeche
[00:20:56] S1: Yes. Super super interesting, and agree that it's really important to have one focus. And, obviously, like, you've done amazing. So congrats on on that. It it reminds me of a conversation I had with Larry Ashbrook, you know, the founder of g squared Mhmm. Where basically, you know, he was saying to your point that sometimes the shiniest asset are not the one that's gonna return, like, the the best. So for for example, for him, like, I know that he actually lost money on Uber and made money on Lyft. So it's like, well, right now, you know, when you look at both company, you could think like, hey. You investing in Uber, you should be like the the most... The richest person on earth, but sometimes it's not. And I... I'd like to to maybe like understand a bit better, like, because I think from a company's perspective, you know, like when... Whenever we looked at the past IPOs, something that happened is... Let's take for example, Klarna or like this kind of like companies or even Figma and, you know, like the the IPOs and eventually after that, you know, like you see the the stock like start tanking and it goes like quite badly for the company and it's it's it's pretty tough, you know, out there in in public markets. So do do you think that as an investor, you have like a better edge being like Baillie Gifford doing like both public and private? Do you think you have a better edge whenever you are like competing on deals because people would know that you are a long term investor because whatever like... And I think the public market doesn't really know that, like if you take, I don't know, like anyone investing in public market can get excited at the IPO, but what they don't know is that people usually have like a six months lockup periods. And after that, after six months, we often see, you know, like the the stock tanking. So retail start panicking and often, you know, like, it's basically the people who are like retail, not informed, etcetera, will lose a lot of money on this because they would see something sinking and they would like start panicking. So do you think because you have this kind of like really long term strategy, it's a it's a value add for companies and a competitive advantage, or, like, how do you perceive it?