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Scottish Mortgage will ‘have to respond’ to PE capabilities concerns

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Eve Maddock-Jones, Investment Week, 17 March 2023:

Scottish Mortgage is facing its second round of anxiety over private equity exposure this year, following internal concerns about its capabilities to navigate this space.

A flagship product of Baillie Gifford, Scottish Mortgage has faced criticism from its own non-executive board member Amar Bhidé, who spoke out against the firm with his concerns.

In an interview with Financial Times, Bhidé said he questioned the management team’s “capabilities and governance clout” to fully monitor its PE exposure, given the lack of publicly available information, culminating in a row with chair Fiona McBain.

James Carthew, head of investment companies QuotedData, said Bhidé had raised “serious questions” about the depth and expertise of Baillie Gifford’s unlisted investment team “that the firm will have to respond to”.

In an RNS notice, McBain responded: “As chair of Scottish Mortgage, 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.”

She said the board was “convinced” the managers were 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”.

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