Scottish Mortgage manager urges patience

Search supported by
Scottish Mortgage manager urges patience
Baillie Gifford's headquarters in Edinburgh, UK (Robert Ormerod/Bloomberg)

The co-manager of the Scottish Mortgage Investment Trust has asked investors to be patient and acknowledged it has been a painful few years for the trust.

Tom Slater told investors that the trust’s growth investing approach will never be consistently in favour, but that they should not deviate from it to avoid “short-term headwinds”, in a statement alongside the trust’s full year results today (May 17).

The share price of the £11.5bn trust is down 20 per cent in the year to May 16, as the high-growth companies in which it invests have sold off as high inflation has prompted a steep rise in interest rates.

Slater said despite these declines, “significant operational progress continues”.

“While this progress has not translated into our investment results lately, we need to remain disciplined and patient. 

“We know this has been painful for shareholders, but history shows that periods of poor performance are inevitable.”

In the results announced, outgoing chairperson Fiona McBain addressed the departure of board member Amar Bhidé, who launched a blistering attack on the board over disagreements around the process to appoint two board members and the trust’s exposure to unlisted assets. 

Bhidé also criticised McBain’s tenure on the board, which he subsequently left, followed a few days later by McBain, although the company said this was part of long-term succession planning.

In the results statement, McBain said the directors discussed all matters raised by Bhidé, and does not currently intend to change its stance or to recommend any changes to its investment policy to shareholders. 

Two new non-executive directors have been appointed to the board in recent weeks.