The investment trusts holding IPO candidates

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It could be a bubble warning as much as an opportunity, but initial public offerings (IPOs) are back with a vengeance.  

The monster Space Exploration Technologies Corp Class A (NASDAQ:SPCX) flotation dominated much of the conversation in markets in June, and more recently another name has listed in the form of Bending Spoons SpA (NASDAQ:BSP). 

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Investors have long faced a challenging situation where stock markets are shrinking and companies with high growth levels stay private for longer. Those private companies, in turn, tend only to be accessible (if at all) via investment trusts. 

Those trusts can be due an uplift both when such companies get upward revaluations as private entities, often to reflect the pricing of a new funding round, and also if they take the IPO route.  

That has certainly been the case for the Baillie Gifford stable as of late: Scottish Mortgage Ord (LSE:SMT), Edinburgh Worldwide Ord (LSE:EWI), Baillie Gifford US Growth Ord (LSE:USA) and Schiehallion Fund Ord (LSE:MNTN) have all benefited from substantial positions in SpaceX ahead of its listing. 

This has even reached extremes: SpaceX accounted for 25% of Scottish Mortgage at the end of June, although volatility could well put a dent in that over time. 

We’ve seen another success in the form of Bending Spoons, which was a major position for both Schiehallion and Baillie Gifford European Growth Ord (LSE:BGEU) ahead of IPO.  

The Italian company buys apps that have hit a roadblock and takes a private equity-esque approach to improving their commercial viability, with apps such as WeTransfer and Meetup in its roster. 

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Holding a recently IPOed company isn’t a stress-free experience, given that the funds affected are often subject to a lock-up period before they can sell, which is the case at the moment for Scottish Mortgage with SpaceX.  

That allows time for the shares to suffer some big falls, something that has happened with many a hot IPO in the past. A trust might also lose some of its appeal to investors, given it’s no longer one of the only ways to access an exciting company once it has IPOed. 

But holding a company on the cusp of IPO can nevertheless result in some good returns. Here, we look at some of the trusts with exposure to companies subject to the IPO rumour mill. 

The hot IPOs 

IPO rumours are easily stoked and they can also be easily foiled. That’s because an IPO itself is a fragile thing: many a plan has been scrapped in the face of market volatility, while developments at the company involved can also scupper them.  

Note, for example, that HgCapital Trust Ord (LSE:HGT) major holding Visma was touted for an IPO until the software sector was rocked by fears of disruption by artificial intelligence (AI) earlier this year.  Those plans have now been delayed, at the least.

We’ve meanwhile seen the narrative moderate for some of the names touted as IPO candidates just a few months ago. ByteDance, the Chinese owner of Tik Tok and, once again, a prominent holding for some of the big Baillie Gifford trusts, has reportedly shelved its IPO plans for now as its private market valuation swells. 

Meanwhile, Stripe, a payments processor that is subject to much IPO speculation, has announced no such plans yet. 

Having said that, other companies are much closer to an IPO. And even those that are more speculatively touted as candidates could, one day, take that route. 

The funds 

If we want to land on the most obvious IPO hopes, these are unsurprisingly the big AI darlings. Both OpenAI and rival Anthropic have reportedly registered their IPO plans. 

Investors are not overwhelmed with ways to get access, however.  

OpenAI is not available via funds, meaning investors would have to wait until the IPO and then either buy directly or get access via funds.  

As we’ve discussed on the subject of SpaceX, broad tracker funds take different approaches when it comes to whether they will grant access to some of the exciting new public equities. 

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Anthropic is available via a handful of investment trusts, and especially so via one.  

It accounted for 6.6% of the Baillie Gifford US Growth trust at the end of May, making it the fund’s fourth-biggest holding.  

That provides another boost for the trust, which remains under pressure from US activist Saba but has already enjoyed an uplift from its chunky SpaceX position. 

Stablemate Scottish Mortgage also has a stake in Anthropic, although this accounted for a much lower 2.7%. 

Other trusts have exposure, although the most recent disclosures suggest these positions are fairly miniscule.  

RIT Capital Partners Ord (LSE:RCP), which has a mixture of listed and private assets, detailed a 0.2% exposure to Anthropic at the end of 2025. 

Databricks and Revolut 

Databricks, which offers a platform for data analysis, is another name reported to be eyeing an IPO, although this could be delayed to 2027 to avoid it competing with the flotations of this year. 

Baillie Gifford once again has some exposure here, with the company making up 4.9% of Schiehallion and 3.4% of Baillie Gifford US Growth at the end of May. 

Elsewhere we have a UK company, challenger bank Revolut, expected to IPO if not for a couple of years.  

That represented around 12% of the Molten Ventures Ord (LSE:GROW) fund at the end of March and has been a very small position for diversified private equity funds Pantheon International Ord (LSE:PIN) and HarbourVest Global Priv Equity Ord (LSE:HVPE).