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?
00:23:15 · Peter Singlehurst
[00:23:15] S0: Yeah. So I think you're absolutely right. Every edge that we have as a private growth equity investor stems from the structural integration between public and private growth equity investing within Baillie Gifford. And you can sort of break that down across the different parts of investing that matter, accessing companies, analyzing those companies, and then adding value to those companies. So on the access side, like, yes, the fact that we are a large public market investor is of unbelievable importance to our ability to access companies. And it also helps that we've been in this market, like, for instance, existed. So, like, you know, if you're a growth equity company, you know us. We know you. Like, that's sort of... We we started to have our own kind of right to win and ability as well. But, ultimately, the fact that we can be a partner of continuity from private and into public markets, the fact that our public market teams, should they decide and it's at their discretion, you know, can conceivably write a billion dollar check-in an IPO is something that a VC investor or a private only growth equity investor simply can't do. In a sense, by working with Baillie Gifford, you you you are able to start derisking your financial future as a business, and you're able to start derisking who the owners of your business are going to be over the very long term, not just, you know, for this bit in private markets. So it's of integral importance to our ability to access companies. When it comes to analyzing those companies, though, and, you know, we look at a thousand businesses a year, and we're trying to make 10 investments. So we have to have a pretty good filtering system to say no to 990 and pick the best 10. Again, our ability to draw on our public market, analytical infrastructure is really important Just to to bring that to life, a little bit. So we, we we do all of our own research in house. We never rely on consultants or anything like that. Our research in public and private markets all done by investors at Baillie Gifford. All of that research is stored in something that we call our research library, piece of software. And in there, there are about 75, 80,000 proprietary research reports written by my colleagues over the course of the last thirty, forty years.
00:25:28 · Peter Singlehurst
I can go and draw on all of that in understanding the defense sector if I'm looking at Anduril or looking at software roll up stories if I'm looking at Bending Spoons, or I can go and look at our early work on Meta if I'm looking at ByteDance. Like, I can I can draw on that institutional knowledge? And because people spend virtually their entire careers within this firm, I can probably also just go and speak to the person who, wrote that research, you know, fifteen years ago. They're probably just sitting, you know, you know, a few meters away from me. And I can then draw those people into our research processes. So that kind of ability to draw on the information, but the institutional heritage around growth equity investing is really important in us then separating the wheat from the chaff and all the stuff that we've been able to access. And then in adding value to those companies, you know, because we know and care about public market governance, for instance, we can help companies get ready for being a public company. We can help them transition from an investor led board to an independent led board. We can help them establish an effective and palatable dual class share structure. We can help our private companies network within the thousand public businesses that we own. Like, this is this is the crux of our competitive advantage, and it's structural. So it's... You know, we we don't sit here saying, well, you know, we've got a competitive advantage because so and so is an amazing investor. We say we have a competitive advantage because we have this structure, and that will outlive any individual investor of Baillie Gifford. It will persist long after I'm gone. And, ultimately, that organizational edge, that organizational stability is what clients should really be underwriting when they are choosing partners in the private markets where you're sort of locked into a fund. You know, you you can't just get out if you decide something's wrong. So it's it's something that's very important to us and something that we've been very intentional on building in to our private business, which is this kind of structural edge. Your second question was kind of about IPOs, and, you... Think you're still trying to get, like, what what makes a good IPO versus a bad IPO? And how can you...