Interactive Investor

Scottish Mortgage manager James Anderson to step down from next April

As a result, the Super 60 member has been put under formal review by interactive investor.

19th March 2021 10:03

Kyle Caldwell from interactive investor

As a result, the Super 60 member has been put under formal review by interactive investor. 

James Anderson, joint manager of the Scottish Mortgage investment trust (LSE: SMT), has announced plans to retire from fund management next year and will step down from the trust on 30 April 2022.

As a result, interactive investor has put the UK’s largest investment trust under formal review in respect of our Super 60 list. This in line with our process when there is a key fund manager departure. 

Tom Slater, who has been joint manager of the trust since 2015, will become lead manger from April 2022. Lawrence Burns, who has co-managed the Baillie Gifford International Concentrated Growth Strategy since 2017, will become deputy fund manager with immediate effect. Burns has worked at Baillie Gifford since 2009.

Anderson has been portfolio manager of Scottish Mortgage since 2000, before becoming joint manager in 2015 with Slater.

Fiona McBain, chair of Scottish Mortgage, commented that Anderson’s “approach of identifying and holding transformational growth companies has helped drive economic progress and delivered exceptional returns for shareholders. James has also pioneered our investments in private companies, one of the trust’s most important strategic initiatives to date.”

Anderson is a long-term believer in the power of technology, reflected in Scottish Mortgage’s portfolio being a high-conviction portfolio of disruptive companies that have a technological edge over competitors and will potentially change the world.

Under Anderson’s tenure, since April 2000, Scottish Mortgage’s share price is up 1,530% versus 426% for the Association of Investment Companies (AIC) Global sector, according to FE Analytics.

Anderson said: “I have huge admiration for Tom and Lawrence. They are both thoughtful, dedicated and ambitious investors with a willingness to learn and an outstanding ability to partner with great companies. I couldn’t be happier than to have them as my successors.”

While long-term performance numbers are impressive, the trusts shorter-term performance also catches the eye. In particular, the trust had a stellar 2020 with its share price up 111%. Its exposure to Tesla (NASDAQ:TSLA), which in July comprised 13.4% of the portfolio, was a big driver behind its performance last year. The trust, however, has been reducing exposure to Tesla over the past couple of months to take profits and rebalance down to a smaller weighting.

The trust’s three biggest weightings at the end of February were Tencent (SEHK:700)Illumina (NASDAQ:ILMN) and Amazon (NASDAQ:AMZN), at 6.4%, 6.4% and 5.1% respectively. Tesla is the fifth-biggest holding, at 4.4%.

In addition, the trust also backs unlisted companies, representing just over 16% of the portfolio at the end of January.

In response to the news of Anderson’s retirement, Scottish Mortgage’s share price is down just under 2% at 1,129p per share.

Since mid-February, its share price has given shareholders a rocky ride, as the trust has been caught up in the wider sell-off of technology shares. The trust is down around 20% from 1,415p per share on 15 February.

The trust’s discount, prior to today’s market open, stood at 1.4%, according to data from Winterflood.

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