Short Briefings on Long Term Thinking - Baillie Gifford

Prime Minister Sir Keir Starmer has pledged to "turbocharge" Britain's growth strategy in response to new US tariffs. His government is prioritising key sectors poised to drive prosperity, including advanced manufacturing, AI and the creative industries. Baillie Gifford's head of UK equity, Iain McCombie, discusses some of the companies already excelling in these sectors how they can prosper over the long term despite the current uncertainty.

Are European stocks coming back into favour? After years of underperformance, many of the continent’s companies appear undervalued when compared to their historical prices and US counterparts. Investment manager Stephen Paice suggests that a group of growth-focused stocks could be among the biggest winners if sentiment shifts, and he identifies a handful of places they are thriving.

Three technologies – quantum computing, reusable rockets and nuclear fusion – could change the trajectory of human progress. Find out how a trio of private companies is bringing them closer to fruition.

From smarter robots to intelligently designed drugs, Baillie Gifford partner Stuart Dunbar discusses some of the transformations that will define the years ahead.

The US’s transformational upgrade of its drainage, power and road networks is a long-term investment opportunity hiding in plain sight. In this podcast, Michael Taylor reveals some of the outstanding companies involved and makes the case that the markets have yet to fully appreciate the advantages working in their favour. Background: Michael Taylor is an investment manager in Baillie Gifford’s US Alpha strategy. In this Disruption Week briefing, he explains why years of neglect coupled with the destructive consequences of wild weather and our insatiable appetite for data-processing power have led the US to embark on a massive renewal of its physical infrastructure. Taylor suggests that many of the companies creating long-term value benefit from supply advantages, which help them defend their commoditised products’ prices. These range from ownership of gravel quarries, which are difficult to get planning permission for, to the use of a gigantic, portable plastic drain-making machine. In addition, Taylor discusses what a second Trump presidency might mean for the sector and why finding standout companies involves travelling off the beaten track. Resources: Disruption Week Building back: the great US infrastructure opportunity Spotting the winners from the great US infrastructure renaissance Companies mentioned include: Advanced Drainage Systems Eaton Comfort Systems USA Martin Marietta NVIDIA Stella-Jones Timecodes:  00:00 Introduction 1:35 Exceptional businesses confronting an exceptional problem 3:20 The US v global infrastructure opportunity 4:35 Donald Trump’s second presidency 6:40 The benefits of patience 7:35 Wild weather 8:45 Investing in Advanced Drainage Systems 11:05 Labour shortages 12:15 Stella-Jones’s wooden telegraph poles 14:05 Tree-spotter specialists 16:15 Martin Marietta’s supply-side advantage 18:55 Recycled aggregates’ limitations 20:15 Finding US infrastructure investments 21:45 Comfort Systems USA and keeping datacentres cool 24:20 “Massive in terms of magnitude of spend and duration”

Many of the world’s most exciting, high-growth and disruptive companies are private. Moreover, the entrepreneurs running them are typically keeping them private for longer before trading their shares on public stock exchanges – and in some cases have no plans to do so. Baillie Gifford’s Private Companies Team seeks out exciting businesses and founders in this space to give our clients access to an increasingly important source of long-term growth. Taking a highly selective approach, it has invested more than $9bn across over 140 firms over the past 12 years. In this podcast, Alexander Nicolier explains how it does so and discusses some of our notable holdings. Background: Alexander Nicolier is an investment manager in our Private Companies Team. In this Disruption Week briefing, he reveals the scale of the opportunity and the increasing impact that the sector’s restless founders and their exceptional companies are delivering. From SpaceX to Bending Spoons, Epic Games to ByteDance, one of the distinguishing features of these pioneering firms is that they’ve been able to choose their shareholders. Nicolier reveals why Baillie Gifford’s patient approach and reputation have helped make us a favoured partner. He also reveals how deep research helps him and his colleagues embrace the uncertainty that can be involved with backing companies at an earlier stage of growth than many public market stocks. And he introduces some of his team’s most recent investments, including the immersive experience specialist Cosm and the next-generation computing company Tenstorrent. Resources: Alexander Nicolier profile Armand Spitz: seller of stars Baillie Gifford Private Companies hub Disruption Week Private companies: investing in trailblazers The hidden cost of software Companies mentioned include: Bending Spoons ByteDance Cosm Disney Epic Games Loft MercadoLibre Meta NuBank Oddity SpaceX Starlink Tempus Tencent Tenstorrent Tesla Timecodes: 0:00 Introduction 1:30 What’s often misunderstood about private companies 2:40 Relationship building in Brazil and Colombia 3:40 Why reputation matters 5:35 “Look out for a gringo” 6:30 Private markets’ scale 7:00 Our clients’ advantage 9:25 SpaceX and uncertainty 12:40 Dealing with setbacks 13:45 Bending Spoons’ business model 16:50 Cosm’s ‘shared reality’ experience 18:50 Tenstorrent and Jim Keller’s talent magnetism 20:20 The state of the IPO market 21:55 Why Epic Games has stayed private 25:00 Disney’s $1.5bn stake in Epic Games 26:40 “Too big to ignore”

China is transitioning from a property-led economy to one focused on advanced manufacturing. It already leads the world in electric car production and the batteries that power them. And it’s also a growing force in renewables, robotics and biotech. Investment manager Helen Xiong discusses some of the growth companies involved, why concerns about overcapacity seem overstated and why rising trade barriers have implications for stocks traded inside and outside China. Background: Helen Xiong is an investment manager in Baillie Gifford’s Global Alpha Team and recently became joint deputy manager of The Monks Investment Trust. In this episode of Short Briefings on Long Term Thinking she discusses why global growth investors can’t ignore China even if they don’t directly own stakes in any of its companies. She describes how the country has made ‘advanced manufacturing’ a strategic priority, laying the foundations for future growth. This has already yielded results, with companies such as the electric vehicle maker Li Auto and battery producer CATL creating long-term value for shareholders – with the prospect of more to come. Xiong suggests that ‘rising trade barriers’ are one consequence of Western nations’ seeking to protect domestic industries and discusses how she takes this into account when deciding which companies to back. In addition, she considers the implications of Chinese retaliation and what that might mean for some of the US and Europe’s leading exporters. Xiong also shares her view on recent stimulus by the Chinese central bank and government agencies, focusing on signals of a shift that could create long-term shareholder value. Resources: China: finding the new shoots of growth Jonathan Haidt: The Righteous Mind – Why Good People are Divided by Politics and Religion More from Helen Xiong: Beyond NVIDIA: investing across the semiconductor ecosystem Global Alpha Investor Forum 2024 Companies mentioned include: Li Auto CATL Timecodes: 00:00 Introduction 1:30 The advantage of being Chinese, African and European 3:00 Relationships v individualism 5:15 China’s post-Covid economy 7:00 Why China matters to global investors 8:30 Overcapacity: a feature, not a bug 10:15 Brutal competition 10:55 Investing in Li Auto 13:45 Li Xiang’s attention to detail 14:30 The car industry’s iPhone moment 16:25 Trade tariffs 18:20 Potential Chinese retaliation 19:35 Chinese regulators 20:35 Stimulus 21:35 Focusing on long-term shareholder value 22:20 Book choice 23:45 Conclusion

Upheaval can create opportunity. Baillie Gifford’s Japan Team seeks out companies that will derive the greatest long-term benefit from transformational forces impacting business and broader society. In this podcast, investment manager Matthew Brett identifies four ‘structural growth’ drivers and the portfolio companies taking advantage of them. Background: Matthew Brett is the investment manager of The Baillie Gifford Japan Trust and our Japanese Fund, as well as co-manager of the Japanese Income Growth Fund. In this episode of Short Briefings on Long Term Thinking he discusses four forces creating long-term growth opportunities: - Japan’s late embrace of digitalisation - the rising spending power of its Asian neighbours - the accelerated adoption of industrial automation - the unmet health needs of an ageing population Brett also names some of the Japanese companies driving these changes or otherwise gaining advantage, including ecommerce conglomerate Rakuten, skincare beauty firm Shiseido, machine vision specialist Keyence and Alzheimer’s drug developer Eisai. Resources: Japan: the next opportunity Kohei Saito: Slow Down – How Degrowth Communism Can Save The Earth Companies mentioned include: Calbee DMG Mori Eisai Keyence KOSÉ PeptiDream Rakuten Shiseido SoftBank Timecodes: 00:00 Introduction 1:45 From psychology to investment 2:25 Changing Japan 3:15 Japan’s distinguishing market characteristics 4:15 Visiting companies and other equities research 6:00 Performance versus the TOPIX 8:00 Defining digitalisation 8:30 Leaving paper behind 10:15 Rakuten’s online enterprise 10:50 The advantage of QR barcode payments 11:30 Rakuten’s loyalty points scheme 12:25 Accelerating automation and industrial robots 13:30 DMG Mori’s precision machines 14:40 Keyence and robotic vision 16:40 China’s chance of catch-up 17:40 Rising wealth of Japan’s Asian neighbours 19:00 Shiseido’s skincare advantage 20:10 Unmet healthcare needs of an ageing population 21:30 Testing further uses for Eisai’s Alzheimer’s drug 23:30 PeptiDream’s synthetic peptides 24:00 Using AI to put peptides to use 25:10 Calbee’s continued innovation 26:00 Book choice 28:50 Conclusion

Sometimes, you have to take a step back to leap forward. Over the past couple of years, Meta, Amazon, Block and Shopify are among the growth companies to have made efficiency cuts following the pandemic. Gary Robinson, an investor in Baillie Gifford’s US Equity Team, says that’s made them more agile and resilient – qualities that will let them take advantage of artificial intelligence and other opportunities to drive long-term growth. Background: Gary Robinson is joint manager of the Baillie Gifford US Growth Trust, a manager of the American Fund and a partner in our firm. In this episode of Short Briefings on Long Term Thinking, he explores how four leading internet-focused firms have streamlined their operations and reallocated resources to become more adaptable during a period of rapid change. Robinson draws a parallel with companies that made cutbacks after the global financial crisis to suggest that the markets may have underestimated how much growth can be unlocked by leaders taking a hard look at their firm’s spending, organisational structure and business priorities. Robinson suggests that recent efficiency drives will help Shopify, Meta and Amazon pursue AI-related opportunities that could meaningfully increase their earnings. And at Block, efforts to bring two products closer together could help the firm challenge Visa, Mastercard and American Express. Resources: Behind The Tech: Tobi Lütke: CEO and Founder, Shopify Dwarkesh Podcast: Mark Zuckerberg – Llama 3, Open Sourcing $10b Models & Caesar Augustus Bent Flyvberg: How Big Things Get Done Cyril Northcote Parkinson: Parkinson’s Law, and Other Studies in Administration More from Gary Robinson: Lessons from evolutionary biology Why companies should embrace chaos Companies mentioned include: Amazon Block Meta Netflix Shopify Timecodes: 00:00 Introduction 01:40 A background in biochemistry 02:55 The appeal of American companies 03:30 Parallels with the global financial crisis 04:40 Post-Covid efficiency efforts 06:25 Addressing overhiring and patched-together processes 07:40 Future-proofed businesses 08:00 The potential of AI 08:10 Shopify and the distraction of side quests 10:45 Shopify’s Sidekick assistant 12:50 Engineering Shopify’s internal operations 14:20 The authority of founder-leaders 16:00 Meta’s ‘year of efficiency’ 18:00 How AI can drive further growth at Facebook and Instagram 20:10 Business chatbots on WhatsApp and Messenger 21:15 Investing in Block 22:30 Capping employee numbers without compromising growth 24:40 Square and Cash App’s potential to rival Visa and Mastercard 26:35 Meeting Jack Dorsey 27:40 Discipline and focus at Amazon 29:00 Amazon’s fast-growing advertising business 30:20 Generative AI’s trillion-dollar opportunity for AWS 31:25 Offloading routine tasks to artificial intelligence 32:25 Book recommendation 33:40 Outro

Emerging markets have sometimes promised more than they have delivered, but circumstances may be tipping in growth investors’ favour. Will Sutcliffe, head of our Emerging Markets Team, explains why it’s an opportune time to invest in the asset class. Background: Will Sutcliffe is the head of Baillie Gifford’s Emerging Markets Team and co-manager of our Emerging Markets Leading Companies Fund. In this episode of Short Briefings on Long Term Thinking, he brings his 23 years of experience in the field to explain what makes the specialism different from other types of growth investing. He makes the case that finding exceptional growth companies at attractive valuations is only part of the equation. Investors must be mindful of the broader macroeconomic environment, he explains, to avoid getting caught out by currency swings or spiralling debt costs. This leads him to conclude that recent resilience in emerging market economies could point to a favourable outlook for the asset class’s growth stocks. All this only matters to our portfolios if there are exceptional businesses to invest in, and Sutcliffe argues that the emerging markets are home to an increasing number of world-class companies. They range from the Taiwanese chip maker TSMC to the energy, retail and telecoms conglomerate Reliance Industries. Resources: Emerging markets: why bother? Stock story: Pinduoduo South-east Asia’s rising export stars Jio Financial Services Natura PDD Holdings Pinduoduo Reliance Industries Temu TSMC Gabriel Garcia Marquez: Until August Timecodes: 00:00 Introduction 01:45 Joining the Emerging Markets Team 03:15 A ‘terrifying’ baptism of fire 05:00 Emerging markets’ ‘dirty little secret’ 05:45 Qualifying for emerging markets status 06:45 Higher-calibre companies 08:00 Macroeconomic resilience 09:30 US-China tensions and Russia’s invasion of Ukraine 12:00 Investing in China 13:45 PDD Holding’s Pinduoduo and Temu

A new medicine that can help patients lose 15 per cent of their body weight could have far-reaching consequences for healthcare. Wegovy mimics a hormone the gut releases, reducing appetite and slowing digestion to delay hunger’s return. Research is also underway into other potential health benefits. In this podcast, Baillie Gifford investment manager Ross Mathison discusses its maker, the Danish pharmaceuticals manufacturer Novo Nordisk, which became Europe’s most valuable company in 2023. Background: Ross Mathison is an investment manager in our Global Income Growth Team, co-manager of our Global Income Growth Fund and deputy manager of the Scottish American Investment Company (SAINTS). In this episode of Short Briefings on Long Term Thinking, he discusses how medicines that mimic the glucagon-like peptide-1 (GLP-1) hormone could help tackle the growing problem of weight gain. Forecasts suggest that by 2035, more than half the world’s population will either be overweight or obese. That’s likely to lead to more people suffering associated diseases, putting health budgets under further strain. Novo Nordisk initially researched GLP-1s as a diabetes treatment. The company is the world’s biggest insulin producer, but it’s the release of its weight-loss drug Wegovy that’s transformed its growth prospects. News that medical trials suggest that the therapy could also reduce the likelihood of heart attacks, strokes and other cardiovascular threats among some patients has driven further investor interest. Mathison explains that there could be further health benefits beyond this, how even more effective treatments could follow and why Novo Nordisk’s manufacturing edge and connection to the world’s biggest charitable foundation bode well for its future. Resources: New England Journal of Medicine: Semaglutide trial Novo Nordisk cardiovascular trial press release Novo Nordisk kidney trial press release Novo Nordisk Foundation Wegovy World Health Organization obesity factsheet Hitting Against the Spin Timecodes: 00:00 Introduction 1:40 What are GLP-1s? 4:00 Scientific breakthrough 5:05 Obesity: a disease, not a choice 6:45 Novo Nordisk’s drug, Wegovy 08:10 Prescription costs

What distinguishes companies that will thrive from those that will perish? In this episode, we explore three traits that mark out the companies set to surge ahead from those more likely to struggle: 1. They solve real-world problems 2. They are financially strong and disciplined 3. They are highly adaptable Baillie Gifford partner Tim Garratt discusses these characteristics, gives examples of companies that exhibit them and explains why this feels like a once-in-a-generation opportunity to be a long-term growth investor. Background Tim Garratt is an investment specialist, overseeing the institutional clients who invest in our Long Term Global Growth strategy and leading our broader client specialist network. He recently co-authored the paper Why growth, why now?, which reaffirms our beliefs about how growth investing can generate attractive returns. In this episode of Short Briefings on Long Term Thinking, he discusses how interest rate rises, restricted amounts of capital and geopolitical tensions are causing a stock market shake-out. And he explains why this plays to the advantage of patient investors who focus on the fundamentals when picking growth stocks. Garratt gives examples of how companies, including Netflix, Roblox, Shopify and Amazon, fulfil the criteria we seek. And he explains how Baillie Gifford itself is adapting to the times, exploring the use of machine learning and other tools to hone our investment process. Resources: Why growth, why now? We’re all climate hypocrites now See & Spray Netflix engagement report Timecodes: 00:00 Introduction 1:30 From abundance to limitation 03:45 Implications for investors 05:20 Real world problems: supply chains 07:30 Deere and hi-tech farming 09:00 Financial strength and discipline 09:50 Netflix and pricing power 12:00 Keeping watch on margins 14:15 China’s electric vehicle makers 16:15 Adaptability and new business models 16:50 Roblox adds AI 19:30 Microsoft, Amazon and environmental costs 21:45 Sea and the importance of culture 23:00 How Baillie Gifford is adapting 25:05 ‘Why now?’ for growth investing 26:55 Book choice

Show notes Amazon and DoorDash take different approaches to bridging the physical and digital worlds. Amazon has built an extensive infrastructure of warehouses, logistics networks and data centres to directly control its operations. DoorDash instead relies on partnerships with restaurants and stores for deliveries, limiting its capital investment. In this podcast, Baillie Gifford investment manager Kirsty Gibson analyses the advantages of each model and how both approaches can pose a disruptive challenge to more traditional businesses. Amazon and DoorDash exemplify two distinct approaches to rooting a business in both the physical and digital worlds. Amazon has done so by investing deeply in physical infrastructure, including its vast logistics operations and data centres. DoorDash, by contrast, has focused on partnering with others to offer meal and grocery deliveries. Baillie Gifford investment manager Kirsty Gibson explores the merits of each approach and discusses how the two companies and others like them can pose a disruptive challenge. Background Kirsty Gibson is an investment manager in Baillie Gifford’s US Equity Growth Team and is joint manager of the American Fund and US Growth Trust. In this episode of Short Briefings on Long Term Thinking, she explores how a growing number of companies are posing a challenge to incumbents by innovating in both the digital and physical realms. The podcast draws on an interview she gave as part of Baillie Gifford’s Disruption Week 2023 event. In addition to discussing how Amazon and DoorDash put this into practice, Gibson also discusses the chemicals maker Solugen, self-driving lorries pioneer Aurora and electric car maker Rivian, among others. Resources: Where software meets steel Disruption Week 2023 articles and videos Growth waves: supporting companies and spotting opportunities Past podcasts Timecodes: 00:00 Introduction 1:30 Historical background 4:21 Capital-intensive and capital-light approaches 5:31 How Amazon blends its physical and digital operations 8:33 Rivian’s electric pickup trucks 9:57 Solugen: making chemicals with software 13:39 DoorDash’s capital-light approach 15:45 DashMart distribution centres 17:28 Aurora’s autonomous trucking business model 20:30 Reinvesting in Meta 23:25 Investing with conviction 24:18 Ginkgo Bioworks’ potential Follow us via: Twitter LinkedIn Companies mentioned include: Alphabet Amazon Aurora Innovation DoorDash Ginkgo Bioworks Meta Netflix Rivian Solugen Tesla Twilio

China became known as the world’s factory thanks to it offering companies a way to manufacture all kinds of goods at a high quality and relatively low cost. But in recent years, south-east Asian nations, including Vietnam and Indonesia, have begun challenging it for that status. Baillie Gifford investment manager Ben Durrant recently returned from a tour of the region. He discusses some of the long-term growth opportunities he unearthed on his trip. Background Ben Durrant invests on behalf of the Pacific Horizon Investment Trust, the Pacific Fund, and our Emerging Markets Equity Team. In this latest episode of Short Briefings on Long Term Thinking, he explores the factors that led China to become the world’s leading exporter and how its move up the value chain is now creating opportunities for other south-east Asian countries to grasp. Durrant reviews some of his most memorable encounters in Vietnam, Indonesia, Malaysia and Thailand and reveals which growth companies excited him the most. They include businesses using mined metals to make car batteries, banks serving populations with growing spending power and, perhaps surprisingly, one of the world’s leading catfish exporters. Resources: The Indonesian companies powering the green transition Ben Durrant LinkedIn page How Asia Works How the World Really Works Past podcasts Timecodes: 00:00 Introduction 01:30 China’s success as a low-cost exporter 03:15 Land reform’s role 04:00 Good quality, low-cost labour 05:45 South-east Asian countries’ advantage 07:15 Vietnam’s growth opportunity 09:30 Vin Hoan: exporting catfish 11:45 Sourcing local insights 13:30 Indonesia’s move up the value chain 16:15 Clusters of expertise in Malaysia 18:00 Looking beyond tourism in Thailand 20:15 Moving up the value chain 22:15 The attraction of growth investing in southeast Asian 23:15 Paying attention to macroeconomics 24:30 Book recommendation Follow us via: Twitter LinkedIn Companies mentioned include: FPT Hyundai Samsung Electronics Vinh Hoan

Is the time ripe for Japanese growth stocks? Donald Farquharson is Baillie Gifford’s head of Japanese equities and knows the market better than most. In the latest episode of Short Briefings on Long Term Thinking he draws on a recent visit to the country to explain why conditions seem favourable for a cohort of domestic companies with long-term mindsets. Background There’s a sense of renewed confidence and enthusiasm in the air in Japan. The country is home to the world’s second-largest market for equities after the US, but it doesn’t get a corresponding degree of attention from international investors. The reason is partly because of the nation’s past weak economic performance. But a recovery is underway, and critically, many of its growth stocks have strong balance sheets, big ambitions and a positive story to tell. In this episode, Baillie Gifford partner Donald Farquharson draws on his experience of investing in Japan since 1990 to explain why he’s particularly optimistic about the opportunities ahead for a select group of companies. They include the medical equipment maker Olympus, the car components manufacturer DENSO and the takeover advisory service Nihon M&A Center. He also shares why he thinks some misunderstand Japan and why it’s no coincidence that many of the companies he backs are founder-run. Resources: Discovering the unsung superstars of Japanese technology From Yahoo! to Z Holdings: the evolution of an online pioneer Japan: the small businesses with big opportunities Investing in Japan: distance lends perspective Donald Farquharson’s LinkedIn page Aiming High: Masayoshi Son, Softbank Group and Disrupting Silicon Valley Past podcasts Timecodes: 00.00 Introduction 01:40 Investing in Japan in the 1990s 03:00 ‘Undiscovered’ Japan 03:55 How banks and other businesses changed 05:30 A sustainable recovery? 06:45 An exciting time for growth companies 07:45 Strong balance sheets 08:15 Olympus and endoscopes 09:45 Diversity on the board 11:00 Nihon M&A Center and company takeovers 12:50 DENSO, a major supplier to Toyota and others 14:30 Toyota City, home to one million people 15:35 Competition for car batteries 16:30 Baillie Gifford’s advantage in Japan 17:45 Looking beyond the headlines 18:20 Book recommendation: Masayoshi Son and Aiming High 19:45 Investing in founder-led firms Follow us via: Twitter LinkedIn Email Companies mentioned include: DENSO Koganei Country Club Nihon M&S Center Olympus Panasonic ROHM Semiconductor Softbank Toyota

What counts as a growth stock is ever-changing. Mark Urquhart shares lessons from 27 years of investing to explain how he decides what to buy and how long to hold as he continues his hunt for outsized returns. Background: In 1996, our largest investments included oil and gas companies and high street banks. These days, our biggest holdings specialise in computer chips, ecommerce and biotech. We still pursue long-term growth – companies we believe will reach their potential given time. But we find it in different places. In this episode, partner Mark Urquhart explains how he tries to identify companies that can grow for a decade or longer, allowing their sales, profits and share prices to compound along the way. He discusses the changing nature of the businesses that qualify and what gives him the confidence to back maverick founders. Other topics he covers in conversation with managing editor Malcolm Borthwick include lessons from the pandemic and the growth companies that most excite him today. Resources: The changing face of growth Four cardinal questions for growth investors Mark Urquhart’s LinkedIn page 1599: A Year in the Life of William Shakespeare Past podcasts Timecodes: 00.00 Introduction 1:20 Joining Baillie Gifford in the pre-Google era 03:45 An evolving attitude to growth companies 05:20 Looking for stronger compound growth 06:35 Investing in Microsoft 08:00 The quest for companies like Hermès 09:55 Learning to be open-minded in Japan 12:10 The importance of mavericks 13:40 How Tesla hit its targets 14:40 Investing in times of crisis 17:35 What the Covid pandemic teaches growth investors 23:05 Today’s most exciting growth companies 25:15 Book recommendation Follow us via: Twitter LinkedIn Email Companies mentioned include: Alphabet (Google) Apple ASML Dexcom Don Quijote Hermès MercadoLibre Microsoft Netflix Peloton SpaceX Tesla

Stuart Dunbar explains why a long-term investment approach suits the new types of growth companies that are emerging. Background: It’s been five years since Baillie Gifford launched its ‘actual investors’ campaign. It focuses on the firm’s long-term, active approach to growth. In this episode, the effort’s mastermind Stuart Dunbar joins Malcolm Borthwick to take stock and explain why actual investing is more relevant than ever. As he explains, capital-intensive companies are seeking to transform healthcare, transport and entertainment, among other industries, and they need patient, supportive shareholders to fulfil their potential and deliver strong returns. Resources: Actual investors Let’s talk about actual investing Baillie Gifford’s investment beliefs The Premonition by Michael Lewis The Economics of Fund Management by Ed Moisson The Golfer’s Journal Timecodes: 0:00 Introduction 1:30 What is Actual investing? 3:30 Finding great companies 4:20 Investing with autonomy and conviction 6:10 Growth investing 8:00 Companies harnessing technology 9:10 The next decade of growth 12:00 Health innovation 14:45 Interest rates and inflation 19:00 Stress testing portfolios 21:15 Guarding against group think 22:30 Book recommendations Follow us via: Twitter LinkedIn Email Companies mentioned include: Amazon Apple ASML Moderna Netflix Samsung TSMC

To mark the pioneering Trust’s anniversary, James Dow delves into SAINTS’ origins and explains how he helped reinvigorate it for a new age. Background: The Scottish American Investment Company (SAINTS) made its debut in 1873, introducing the first trust to prevent shareholders from facing ruin if a business they backed failed. This groundbreaking approach instilled confidence, paving the way for the public to invest in a vital US railway among other enticing overseas opportunities. Nearly 20 years ago, Baillie Gifford took over the Trust’s management. Joint manager James Dow helped revitalise SAINTS by focusing on exceptional income-driven global companies. As he tells podcast host Malcolm Borthwick, their activities range from making AI-enhanced factory cameras to creating some of the world’s most sought-after cosmetics. Resources: The Scottish American Investment Trust Company Order a copy of the SAINTS: 150 Years book SAINTS Manager Insights video, April 2023 The SAINTS approach webinar video, March 2023 Shoemaker by Reebok founder Joe Foster My Years at Volkswagen by Carl Hahn Baillie Gifford’s Trust magazine Follow us via: Twitter LinkedIn Email Companies mentioned include: Analog Devices Atlas Copco Cognex L'Oréal

Keystone Positive Change’s Kate Fox on thinking about the world in 2050 to spot opportunities today. Background: Kate’s conversation with Malcolm Borthwick covers her work with the Deep Transitions Futures project, coordinated by the University of Sussex and Utrecht University and supported by Baillie Gifford. The project aims to identify patterns and insights from past ‘deep transitions’, such as the Industrial Revolution, to inform and guide our approach to identifying solutions to present and future challenges. These include climate change, social inequality, and biodiversity loss. The initiative seeks to develop strategies for fostering radical innovation. It engages investors, policymakers and researchers, among other stakeholders, to promote a transformative investment philosophy and drive systemic change. Resources: The second deep transition: Johan Schot’s theory of radical change Deep Transitions Futures project Previous Short Briefings on Long Term Thinking episodes Follow us via: Twitter LinkedIn Companies mentioned include: Beyond Meat Deere Northvolt Tesla Umicore

Meet the lesser-known niche players thriving in the shadow of the country’s big brands Think of Japanese companies and chances are giants such as Sony, Hitachi and Mitsubishi come to mind. You probably don't think of Shima Seiki - a maker of automated knitting machines, Descente, which owns licences to use brands such as Le Coq Sportif and Umbro, or Shoei, a maker of handmade motorcycle helmets. But these kinds of companies are the beating heart of its economy. Japan’s three and a half million small and medium-sized businesses (SMEs) employ about seven in 10 private sector workers. These firms are sometimes overlooked by investors in Japan, but not by Praveen Kumar, manager of Baillie Gifford Shin Nippon, who explains why they provide ample opportunities for growth investors. Praveen Kumar is manager of the Baillie Gifford Shin Nippon and Baillie Gifford Japan Trust. You can read more about his and his colleagues’ thoughts about the positive outlook for Japan’s most inventive and disruptive companies at our Japan Forum: Steering through rough seas. For the thoughts of his colleague Donald Farquharson, Head of Japanese Equities, on the country’s post-Covid return to normality, go to Investing in Japan: Distance lends perspective. And to find out more about how Praveen and his team get to hear about exciting SMEs, watch Investing in Japan: Insights with our Japan researchers.