Scottish Mortgage unveils £1 billion share buyback

Scottish Mortgage unveils £1 billion share buyback

The Scottish Mortgage Investment Trust, the flagship fund of Edinburgh-based Baillie Gifford, has announced its largest ever share buyback programme.

The trust’s board has committed to repurchasing at least £1 billion worth of shares over the next two years.

The move aims to reduce the trust’s double-digit discount, with shares having traded at a significant discount since 2022, averaging just under 10%. Despite recent struggles as investors favoured value over growth stocks amid rising rates and inflation, the trust has already bought back £353 million worth of shares in the past two years.

Justin Dowley, chair of Scottish Mortgage Investment Trust PLC, commented: “We remain committed to using share repurchases strategically to enhance liquidity in our shares and to seek to facilitate trading around net asset value.

“Our company has a strong balance sheet, and its portfolio companies are delivering strong operational results. We are acting upon this investment opportunity by materially increasing the capital available to our liquidity policy over the next two years with the aim of maximising returns for our shareholders.”

Tom Slater, manager of Scottish Mortgage Investment Trust PLC, commented: “In a volatile period for growth investment, we own a portfolio of established companies achieving rapid expansion, propelled by enduring structural trends.

“Advances in foundational technologies are unlocking exciting new products, services, and business models. These well-funded public and private companies are shaping the future of the economy.

“The stock market has yet to fully recognise their progress, which creates the opportunity for us to buy the portfolio for less than its market value. In doing so, we can provide liquidity and augment returns for our shareholders. We intend to pursue this opportunity with conviction.”

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