Alibaba’s flotation is a major boost for the Scottish Mortgage Investment Trust, which has had a holding in the ecommerce firm since 2012.
A theme of the Baillie Gifford trust is making the most of new and disruptive technology. Managers James Anderson and Tom Slater bought Alibaba at around the same time as they bought Facebook.
In its factsheet at the end of July, the trust had a 2.2 per cent weighting in Alibaba. But in a statement to the London Stock Exchange on September 8, the trust disclosed that it had revised up its net asset value due to a change in its valuation of Alibaba.
This was because the original $60-$66 proposed price range for Alibaba’s shares valued the company significantly higher than it was when unlisted.
Scottish Mortgage said it had revalued its holding in Alibaba accordingly, even though in its statement it said it had valued the business at the bottom end of the proposed range.
The statement said the revision “represents an uplift of circa 40 per cent on the current unlisted valuation”. This has propelled Alibaba into the trust’s top 10 holdings.
However, Alibaba has since revealed it is raising the price range to $66-$68, giving the investment trust a further uplift.
