Best known as an aggressive-growth-equity manager that benefited from early bets on high growth tech stocks, Baillie Gifford recently endured large and correlated drawdowns. This affected many of its funds and the bulk of its assets under management in 2022, denting some track records and prompting outflows and, for the first time in the firm’s history, layoffs. Following a strategic review, Baillie Gifford reversed course on a couple of smaller initiatives: It shuttered a number of its fixed-income offerings in the past 12 months, including both its emerging-markets bond funds and liquidating its non-UK-domiciled fixed-income funds. Meanwhile, some senior investors have retired in the past five years.
There is still much to like, including the partnership structure. Many at the firm—including many of the 58 partners, 33 of which are investors—spend their entire careers at Baillie Gifford. Staff turnover is low, and the partnership is a strong retention tool: The distinctive investment culture persists. The firm’s graduate program is a key element of success in this regard, and many veteran investors here joined via that route. Risk management is investor-led and has more influence now than prior to the 2022 drawdowns.
Elsewhere, the firm, with more than GBP 230 billion in assets under management, passes on economies of scale and demonstrates sound capacity management. The firm boasts loyal institutional clients comprising roughly 81% of AUM, mostly in segregated accounts. Equities account for 96% of AUM.
United States