Investments  

Baillie Gifford trust seeks to increase unlisted investments

Baillie Gifford trust seeks to increase unlisted investments

An increasing number of "interesting" opportunities in China has prompted the board of the £214m Baillie Gifford Pacific Horizon trust to seek to increase the amount it can invest in unquoted companies.

Pacific Horizon, which is currently mandated to invest in the Asia Pacific region excluding Japan and the Asian subcontinent, currently has 1.6 per cent of its capital in unlisted businesses.

This consists of investments of around $2bn (£1.5bn) of unlisted investment across 45 companies in different geographic locations. At present, only six of these companies are from the Asia-Pacific region and Indian sub-continent.

In the trust's annual report, covering the period to 31 July 2018, the trust’s chairman Jean Matteson said the board was seeking permission to increase the weighting to a maximum of 10 per cent.

Ms Mattheson said: "Our portfolio managers anticipate being shown an increasing number of interesting unlisted investment opportunities, particularly Chinese companies, over the coming years and we believe it is in the interest of shareholders for them to consider these opportunities for investment.

"Given the increasing quantum of potentially attractive unlisted investment opportunities that Baillie Gifford is beginning to see, in particular some very interesting Chinese names, the board believes that the portfolio managers should have the opportunity to invest up to a maximum of 10 per cent of total assets, at the time of initial investment, in unlisted equity opportunities in the Asia-Pacific region and Indian subcontinent."

The trust was the top performer in the AIC Asia Pacific excluding Japan sector over the past five years. Over the past year it has returned 11 per cent, compared with 1 per cent for the sector but the past three months have been tougher, as the trust has lost 16 per cent, compared with 5 per cent for the sector.

Luca Paolini, market strategist at Pictet, said emerging market equity valuations had fallen to an attractive level, while he was wary of the valuations of European and US equities, which he regarded as expensive.

St James’s Place recently announced it would launch a product investing in unquoted assets due to what it said was an increasing trend for attractive companies to remain unlisted for longer.  

david.thorpe@ft.com