The Scottish Mortgage Investment Trust has changed its investment mandate to place a limit on unlisted investments, which have increased in the portfolio.
James Anderson and Tom Slater, managers of the £3.96bn trust, have increased their allocation to unlisted investments over recent months, but have now put a limit in the investment policy.
Subject to FCA approval, the trust will limit the non-listed portion of the portfolio to 25 per cent of the total assets of the trust.
In its interim report, to the end of September last year, the investment managers said they had invested in a number of unlisted companies in the previous six months. These included furniture retailer Home24, Funding Circle, Airbnb and US tradesman ratings service Thumbtack.
At the end of September unlisted investments made up 10 per cent of the trust, with Anderson and Slater advising that it would rise further.
The board says that the shift for companies to wait longer before listing is a long-term trend, meaning investments in unlisted entities are likely to remain.
“In order to maintain the breadth of their investment opportunities, the managers have sought to utilise the flexibility of the closed ended capital structure of Scottish Mortgage to invest in a number of private companies, in the belief that this will provide them with a greater opportunity to continue to deliver long term returns for shareholders in the future,” he says.
“The board believes this shift in the dynamics within the capital markets is likely to persist for some time, rendering the flexibility to undertake such investments of increasing importance for growth investors across the world.”