BY GAVIN LUMSDEN, Citywire Investment Trust Insider, 17 March 2023
Amar Bhidé, a non-executive director at Scottish Mortgage Trust (SMT), has told the Financial Times he was removed from the investment trust’s board yesterday after disagreeing with the chair Fiona McBain over appointments and the risks of the trust’s £3.8bn investments in unquoted companies.
Bhidé, a business academic and author who joined the board of the Baillie Gifford flagship in 2020, told the newspaper he had been concerned about the global growth trust’s share price performance and discount…
Bhidé claimed the low-charging trust lacked the resources of venture capital firms to oversee its private investments.
‘They do not have the capabilities and governance clout to be able to monitor the illiquid investments on which there is little audited information in the public sphere,’ he said.
‘The fact that you’ve pulled it off for the last 10 years has been due to an utterly aberrant period in financial history. Don’t delude yourself that you can keep playing this game.’
He also told the FT he had clashed with McBain over the process to appoint two new board members, which suggests there was disagreement about its independence from Baillie Gifford or its expertise…
McBain told the paper the board was doing its job, and had regularly ‘debated at length and scrutinised’ issues such as the share price and private companies.
‘As chair of Scottish Mortgage, I have complete confidence that Scottish Mortgage’s board provides robust governance and ovesight. We remain convinced that the mangers are taking the right long-term approach, and building a portfolio of transformational companies that can deliver for shareholderes over five years or more.’
James Carthew, head of investment companies at QuotedData, said boardroom rows were commonplace, but Bhidé had raised a serious question about the depth and of Baillie Gifford’s unlisted expertise. However, with 51 partners and over 1,700 staff working at head office in Edinburgh, he said it was not a small organisation.
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