The Scottish Mortgage Investment Trust has refuted claims that one of its directors has left, after he said he was removed from the board over a disagreement around unlisted assets.
In an update to the stock exchange today (March 17), Baillie Gifford said Amar Bhidé remained a director of the company and has not resigned or been removed.
Bhidé, who has been a non-executive director on the board of the Scottish Mortgage Investment Trust since 2020, told sister paper the Financial Times that he had been “removed” from the board on Thursday (March 16).
Bhidé said he had raised concerns about the trust’s exposure to private assets, saying it did not have the resources and governance to monitor these investments.
“The fact that you’ve pulled it off for the last 10 years has been due to an utterly aberrant period in financial history,” he told the FT.
“Don’t delude yourself that you can keep playing this game.”
I don’t see investing in the sector as being riskier than in public stocks.Tom Slater, Baillie GiffordIn the statement today, Fiona McBain, chairperson of the trust’s board said: “I have complete confidence that Scottish Mortgage's Board provides robust governance and oversight.
“Current topics such as short-term volatility and the Company's exposure to private companies have been debated at length and will continue to be scrutinised by the Board.
“The Board is convinced that the managers are taking the right long-term investment approach and building a portfolio of exceptional growth companies that can deliver for shareholders over five years or more."
The trust has 26 per cent of its portfolio in private companies, just below its own limit of 30 per cent.
Last year, Baillie Gifford increased the amount of unlisted assets its trusts could hold, increasing the threshold for its US growth trust to 50 per cent.
In September in a blog post for Baillie Gifford, Scottish Mortgage’s co-manager, Tom Slater, defended the trust’s private asset exposure, saying it is not an “early-stage” investor, and only gets involved once businesses have already achieved “reasonable success”.
He highlighted that companies are taking longer to list means that if the trust did not invest in private assets it would miss out on the “rapid growth” of these companies.
“I don’t see investing in the sector as being riskier than in public stocks,” he said.
A spokesperson for the trust told FTAdviser that Bhidé had not been removed from the board.
The Financial Conduct Authority requires listed companies to notify the stock exchange of any changes to the board, including the resignation, removal or retirement of a director.
This must happen as soon as possible and by the end of the business day following the decision.
Baillie Gifford saw its assets under management drop by more than £100mn last year as a result of the impact of higher interest rates on growth companies.
The asset manager’s AUM fell from £336bn at the end of 2021 to £223bn at the end of 2022.
sally.hickey@ft.com
