Scottish Mortgage portfolio director Claire Lewis on investing in private companies and in the entire AI value chain
The ability to own both public and private equities is a key differentiator for Scottish Mortgage, according to Claire Lewis, portfolio director on the Baillie Gifford-run investment trust.
“What we are trying to do essentially is buy the most exceptional growth companies in the world,” she says in the above video, which was filmed at Wealthwise’s Spring Wealth Forum in early March. “Private growth equity is something like a $5tn asset class today and you have some of the world’s best companies that are still private.
“Take Scottish Mortgage’s biggest holding today, SpaceX, where you essentially have a private business with two monopolies – in launch and in internet satellite. If you look today at the top 10 most valuable ‘unicorns’ globally, Scottish Mortgage has six of those in the portfolio – and the growth you get in these companies is phenomenal. They are growing revenues in excess of 50% per annum, they are still investing heavily into their businesses and they have enough cashflow to reinvest into that growth as well.”
‘Wide and varied’ AI exposure
Later in the video, Lewis highlights artificial intelligence as “the topic of the day”, adding: “I think it would come as no surprise that Scottish Mortgage has exposure to AI right across the entire value chain. If you look at the portfolio today, we have exposure from the ‘picks and shovels’ of the sector – the hardware and the chips – you know, we have Nvidia, TSMC, ASML.
Whatever structural megatrends are out there today, Scottish Mortgage has exposure to all of them – and on a global basis.”
“But what we also have is exposure along that value chain. We have companies that are deploying AI in areas like healthcare – so we have Tempus AI in the portfolio – and we have companies that are able to monetise AI today, like Meta, the social media platform. So our exposure to AI is wide and varied and we continue to look for opportunities in the space. Still, whatever structural megatrends are out there today, Scottish Mortgage has exposure to all of them – and on a global basis.”
You can view the whole video by clicking on the picture above. To jump to a specific question, just click on the relevant timecode:
00.00: What sets Scottish Mortgage apart from its peers?
00.47: Why should investors have exposure to private companies?
01.53: Which of the trust’s current holdings would you highlight?
