Baillie Gifford American
This fund is run by a team of four co-managers who focus on the small number of US companies that create exceptional returns. On average they will own these companies for at least five years and will do so with conviction - the largest ten holdings usually account for more than half of the total portfolio. The companies they invest in will tap into the trends of the future, such as the continued rise of online retail, the evolution of transportation and innovative healthcare.
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Tom joined Baillie Gifford in 2000 and became a partner in 2012. He was appointed joint manager of Scottish Mortgage Investment Trust in 2015, after serving as deputy manager for five years. Tom is also Head of the US Equities Team and a member of the Long Term Global Growth Team. His investment focus includes high-growth companies in both public markets and private investments. He has worked in the Developed Asia and UK Equity teams at Baillie Gifford. Tom graduated with a BSc in Computer Science with Mathematics from the University of Edinburgh in 2000.
Gary Robinson is an investment manager in the US Equity Growth Team at Baillie Gifford, where he has been since 2003 and became a partner in 2019. He has previously worked with the Japanese, UK, and European Equity teams before joining the US Equity Growth Team in 2008. A generalist investor, Gary has a particular interest in the healthcare sector, stemming from his undergraduate studies. He graduated with an MBiochem in Biochemistry from Oxford University in 2003.
Kirsty joined Baillie Gifford in 2012 and is an investment manager in the US Equity Growth Team. Since 2021, she has helped manage the North American portfolio of the Managed Fund and Global Core Fund. Before joining the US Equity Growth Team, Kirsty worked in both the small and large-cap global equities departments. She holds an MA (Hons) in Economics (2011) and an MSc in Carbon Management (2012), both from the University of Edinburgh.
Dave is an investment manager with Baillie Gifford’s US Equity Growth Team, where he has been since 2018 and became a partner in 2021. Before Baillie Gifford, he co-founded Coburn Ventures in 2005, focusing on understanding changes that drive investment opportunities. Dave has also worked in various hedge fund roles and started his career in 1996 at Warburg Dillon, later joining UBS. He graduated from Boston College in 1993 with a major in Finance and Philosophy.
Tom joined Baillie Gifford in 2000 and became a partner in 2012. He was appointed joint manager of Scottish Mortgage Investment Trust in 2015, after serving as deputy manager for five years. Tom is also Head of the US Equities Team and a member of the Long Term Global Growth Team. His investment focus includes high-growth companies in both public markets and private investments. He has worked in the Developed Asia and UK Equity teams at Baillie Gifford. Tom graduated with a BSc in Computer Science with Mathematics from the University of Edinburgh in 2000.
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Gary Robinson is an investment manager in the US Equity Growth Team at Baillie Gifford, where he has been since 2003 and became a partner in 2019. He has previously worked with the Japanese, UK, and European Equity teams before joining the US Equity Growth Team in 2008. A generalist investor, Gary has a particular interest in the healthcare sector, stemming from his undergraduate studies. He graduated with an MBiochem in Biochemistry from Oxford University in 2003.
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Company Description
Founded in 1908 and employee-owned, Baillie Gifford is based in Edinburgh but has offices in London and New York. Awarded the Elite Provider for Equities Rating each year from 2015 to 2021, it specialises globally in equities, fixed income and multi-asset portfolios. The firm is owned by its senior executives and operates as a partnership.
Fund Performance
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Investment process
The US is often the home of the world’s fastest growing companies, and this fund aims to build a concentrated portfolio of these firms, and hold them for the long term. To do this, the four-strong management team is looking for exceptional businesses that have a product or service which has the edge over the competition and the right corporate culture to allow it to succeed.
The process is meticulous but specialised. The managers only expect to have around eight new ideas annually. They will try to find these by looking at alternative sources of data such as industry journalists, visits to specialist conferences, academia and even from unlisted stocks. Baillie Gifford has built a reputation of backing companies early and with conviction in this space, so has access to a range of market specialists to discuss upcoming ideas before they become mainstream.
To highlight these opportunities, the managers use a nine-question framework to assess a stock idea, including the purpose of the product/service, whether it has an edge or competitive advantage, whether it is in the right market to expand and at what speed, whether these businesses have the scope to become 2.5x the size they are currently over the next five years and whether the long-term ambition of the management supports all of the above. This will indicate whether to take the stock further or move onto another idea.
If a stock does answer all of these questions, the manager or analyst will bring the company to a team meeting. There is ongoing discussion amongst the team, as well as more formal meetings where ideas are discussed and debated. Primarily, they will want to establish the credibility of the business model and feel confident there is significant scope for the share price to rise. When they find these ideas, they are backed with conviction.
If a holding achieves the desired 2.5x gain, the team will reassess to see if it can do this again. If they don’t feel it can, it is sold. Similarly, if the company fails to achieve this target the managers will want to know if there is a fundamental change in the investment case and whether the prospects are not what they first thought. If this is the case, a holding will be sold.
Positioning is purely a function of where the managers find ideas. They look for companies that are going to disrupt existing industries and create new ones, meaning the fund will have a strong bias towards technology-enabled companies.
Risk
This is a pure stock-picking fund, so the main risk is down to how each individual company in the fund performs – whether the managers have backed the right firms or not. As the fund invests in the US, there will also be currency risk.
ESG
ESG - Limited
Baillie Gifford takes an holistic approach to ESG. Rather than setting strict rules and restrictions on investments choices, the managers consider the material impact such factors will have on the long-term sustainability of a company’s business when assessing its investment potential. This means that considerations are made on a case-by-case basis and are factored into the overall investment case for the business, but there is no single process that is applied to every holding. The strategy does involve a nine-question research framework which looks for specific material ESG issues, to ensure a long-term investment is not undermined by an inherent flaw, though this is looking for stock-specific issues rather than broad rules-based investing. The wider investment philosophy focuses a lot on governance, however, and managers always meet company management before investing, and have ongoing engagement with the companies they own.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.