The Schiehallion Fund (MNTN) has announced its annual results for the year ended 31 January 2025.
The company delivered a NAV total return of 12.9% and share price returned 51.0%. The share price discount to NAV narrowed from 39.6% to 19.2%. Since launch on 27 March 2019 to 31 January 2025, the company has delivered a NAV total return of 34.1% and a price return of 8.0%.
Discussing the performance for the year, the manager noted:
“The twelve months to 31 January 2025 represented a strong period for public markets, particularly within the United States, while private markets saw an increase in acquisitions, exits, and overall deal volume compared to the prior year. This improvement in sentiment was largely the result of a moderation of previous headwinds such as elevated interest rates and volatile markets more broadly. The net asset value (NAV) total return for Schiehallion over the period was +12.9%, while the share price total return was +51.0%. The company enjoyed a particularly strong final quarter of its financial year, driven in part by a significant valuation uplift in its largest holding, SpaceX, as well as notable share price increases among public holdings Affirm, Wise, and Warby Parker over this three-month period.
“Performance for the full twelve-month period to 31 January 2025 was similarly driven by a combination of valuation increases in private holdings and positive share price movements among selected public holdings. In this regard, SpaceX (+86% valuation increase) continues to showcase remarkable operational progress—most strikingly through the mechanised capture of its giant Starship booster rockets in recent months. Other notable private contributors to performance included Italian digital consumer application acquirer Bending Spoons (+89%) and the Chinese social media giant ByteDance (+33%). Among the public holdings, the US point-of-sale credit provider Affirm (+51%) was also a top-five contributor to company performance as it continues to expand its offering, most notably into the United Kingdom.
“The largest detractors from NAV performance over the period were German online real estate platform McMakler and Swedish electric vehicle battery maker Northvolt. Both holdings saw their valuations close to fully written down during the period. In the case of McMakler, the company has been facing a challenging German macroeconomic environment, which has particularly affected the real estate market. This necessitated a recapitalisation of the business during the second half of the year, with the focus directed towards cost management in the pursuit of profitability. Northvolt has experienced significant operational challenges with regards to scaling manufacturing across its facilities. This, coupled with increased competition from China and a slowdown in electric vehicle demand more broadly, led to the company filing for Chapter 11 bankruptcy in the US during the fourth quarter of 2024. Other detractors to performance included financial solutions provider Brex (-30% valuation decrease), Australian online pet supply company Pet Circle (-44%), and German bus and train operator Flix (-27%).”
Regarding the outlook, the manager added:
“We regard the current outlook for private growth markets as extremely compelling. At a fundamental level, there are three ingredients that make up any good investment: a good product, a good business model underpinned by excellent management, and a good price. We believe we are seeing all three in abundance.
“As far as products are concerned, there is an argument that never before have so many early-stage companies brought this much innovation to bear on creating exceptional products—whether this be satellite internet provision, frictionless cross-border transacting, data-driven medical diagnostics, or AI-assisted video creation, to name but a few.
“At the same time, we believe we are seeing an environment that is highly conducive to excellent business model creation, with companies having access to sufficient financial capital as well as a dense pool of human capital in the form of experienced entrepreneurs and business leaders.
“Finally, all of this is available at compelling valuations, thereby presenting the Schiehallion Fund with the opportunity to continue making investments in not only some of the most transformational companies of today but also some of the most transformational companies of tomorrow.”
MNTN: The Schiehallion Fund delivers on potential in 2025
