The Scottish Mortgage Investment Trust has raised £294m to allow it to expand its portfolio in light of “intense” demand.
In a statement to the stock exchange this morning (January 20), the trust stated the fundraise should enhance shareholders' returns over the coming decades, as the trust maintains an appropriate level of gearing in the portfolio, driven by the growth of its assets.
Stewart Heggie, investment specialist for Scottish Mortgage, said raising fresh capital will allow the trust to back more companies.
He said: "At present, competition for capital in the Scottish Mortgage portfolio is intense. Raising fresh capital at this point will allow us to patiently back more transformational growth companies, as well as increasing stakes in companies who are making considerable progress operationally thus expanding the scale of their opportunities."
He added: "We possess no competitive advantage in trying to predict short-term market gyrations. Therefore, no tactical attempt was made to capture recent market swings."
Recently, rising inflation and the potential of tighter monetary policy as a result has led to uncertainty over whether growth stocks can continue the upwards run they have benefited from in the past five years.
A fund manger at Abrdn told FTAdviser earlier this week that growth managers are going to find it increasingly difficult to ignore value stocks.
Indeed, the Scottish Mortgage trust’s share price has fallen 13 per cent since the start of the year, and is currently trading at 1,122.0p share, down from a high of 1,543.5p at the start of November last year.
The trust, launched in 1909, is Baillie Gifford’s flagship investment trust and invests globally in growth firms.
In the six months to September, the trust saw its net asset value rise 16 per cent, compared with a 9 per cent rise for the FTSE All-World index.
The debt has been issued in the private market through a 30-year, 35-year and 40-year notes in US dollars.
In March last year the trust announced that its joint manager, James Anderson, will leave Baillie Gifford in April 2022 after more than two decades running the fund.
Anderson has been the manager of Scottish Mortgage since 2000. Since 2015 he has shared the role with Tom Slater.
sally.hickey@ft.com
