The Scottish Mortgage Investment Trust, the Baillie Gifford-managed technology investment fund that has had an outstanding record over the past several years, has backed another winning horse in Ang Group. The Trust’s $250 million (£190 million) stake in the fintech Alibaba spin-off has seen its value almost double in a little over two years. The investment was made in June 2018 as part of a private fundraising round that valued Ant Group at $150 billion.
At the time, the Scottish Mortgage Investment Trust backed Ant Group in the form of 44.6 million shares priced at $5.61 each, making it one of the investment vehicle’s most significant holdings. Now, with Ant Group on the cusp of an IPO that will see its share list on the Hong Kong and Shanghai stock exchanges in a dual listing, its valuation has been set at an initial$313 billion.
The IPO, which will raise $34.4 billion in fresh capital, will become the biggest in history, surpassing the previous record set last year by Saudi Arabia state oil group Saudi Aramco. Shares in Ant Group have been confirmed at HK$80($10.32), which sees the value of the Trust’s holding rise £210 million to £460 million, compared to the original buy price.
Established in 1909 by Edinburgh-based fund manager Baillie Gifford, the Scottish Mortgage Investment Trust’s strategy is to invest in private companies in the years before the go public. In recent years, the Trust has focused exclusively on high growth technology companies. And it has an impressive record of success.
One of its other big bets has been Tesla, with it taking a stake in the electric vehicles, batteries and self-driving technology company while it was still private. Tesla’s share price has gained over 365% this year. In late August, when the Tesla share price hit its high point for the year, the return for 2020 was close to 500%. Tesla is now the Trust’s largest holding, worth £1.8 billion and accounting for 12% of the value of its portfolio.
There is optimism the Trust’s Ant Group holding could be worth even more in coming months if the share price performs well after the IPO. The holding is the owner of Alipay, the mobile payments company established by Alibaba in 2004 and spun at as a stand-alone company several years later.
The Trust also holds a position in Alibaba, which is its third largest holding, worth £909 million and accounting for 6.1% of the portfolio.