Short Briefings on Long Term Thinking - Baillie Gifford

AI lab Anthropic, digital bank Revolut, Chinese social network Xiaohongshu and supply chain specialist Zetwerk count among Baillie Gifford’s most recent private growth company investments. These bold pioneers are part of an expanding asset class, representing some of the world’s fastest growing and most disruptive businesses. Investment manager Robert Natzler tells host Leo Kelion how and why we backed them on behalf of our clients. Background: Robert Natzler is an investment manager on our Private Companies Team and deputy manager of The Schiehallion Fund. In this conversation, recorded as part of our annual Disruption Week briefings, he brings you up to date on his team’s recent activity, bringing our tally of private company investments to more than 160, with a total value of over $10bn. Companies discussed include: Mottu – the motorcycle rental and service provider, serving gig workers and others in Latin America. Revolut – the digital bank that has surpassed HSBC and other traditional lenders in terms of its customer count. Anthropic – the frontier AI lab behind the chatbot and coding champion Claude. Xiaohongshu – the Chinese social network, also known as RedNote, with a strong and growing following, especially among young women. Zetwerk – the outsourcing specialist giving western brands and manufacturers the ability to broaden their supply chains beyond China. Resources: About Robert Natzler Disruption Week From code to culture: private companies shaping the world Private Companies Team Private growth: looking over the overlooked Short Briefings on Long Term Thinking hub Why we are backing Anthropic Companies mentioned include: Anthropic ByteDance Mottu Revolut Xiaohongshu (RedNote) Zetwerk Timecodes: 00:00 Introduction – Mottu CEO Rubens Zanelatto’s masterstroke 02:20 Investing in ‘real’ companies with ambitious leaders 05:20 Helping growth-stage companies prepare to go public 08:35 Exceptional companies in California and beyond 09:55 Mottu: providing motorcycles and maintenance to an underserved segment 13:10 Revolut: pursuing a different playbook to traditional banks 16:35 Gaining conviction in AI lab Anthropic 23:40 Dario Amodei’s appeal to other AI talent 24:30 Xiaohongshu (RedNote)’s popularity among women in China’s wealthiest cities 26:25 Zetwerk: expanding access to factories around the world 28:37 How Baillie Gifford clients can access private companies 29:35 Taking a global perspective on private companies

From using AI to create better weather forecasts to helping people with disabilities get their dream job, Japan’s small companies are a disruptive force.

Inside ownership can give companies an advantage when it comes to long-term growth. That includes having a leader or family with a substantial stake in the business. And it also covers firms with farsighted backers, such as philanthropic foundations, which encourage management to take the long view. From airline Ryanair to hearing aid specialist Demant, investment manager Jenny Davis explores how having skin in the game drives firms to act with persistence. Background: Jenny Davis is a Baillie Gifford partner and an investment manager in our International Alpha Team. She specialises in companies based outside the US that offer ‘quality growth’ – combining the potential for outperformance with durability. In this podcast, she explores how persistent, inside ownership works to the advantage of companies she has backed. Examples include firms with founders who have retained a significant stake, those with long-serving hired leaders rewarded with shares and other long-term incentives, companies with family owners where control has passed between generations, and businesses backed by a foundation or holding company with long-term objectives. Companies covered include: Discovery – the health insurer that has gone global, using data to nudge customers into improving their fitness. Ryanair – the European airline that benefited from its chief executive’s obsession with controlling costs. Technoprobe – the family-run ‘probe card’ specialist whose ability to spot faults in computer chips has kept pace with semiconductors’ increasing complexity. Demant – the hearing aid specialist backed by a charitable foundation, which has invested in getting closer to its customers. Scout24 – the German property portal whose independence Baillie Gifford helped preserve, allowing it to pursue a successful long-term growth strategy. Resources: Baillie Gifford A new age of discovery: the case for international (restricted to certain clients) Pioneers: 8 Principles of Business Longevity from Immigrant Entrepreneurs Short Briefings on Long Term Thinking Companies mentioned include: Demant Discovery Ltd Ferrari Hermès Investor AB LVMH Novo Nordisk Richemont Ryanair Scout24 Shimano Technoprobe TSMC Timecodes: 00:00 Introduction 01:55 The “scenic route” to asset management 03:00 Focusing on quality growth 04:35 Persistence’s enduring edge 05:45 Different types of inside ownership 06:30 Discovery’s healthy nudges 08:10 Adrian Gore’s visionary leadership 09:45 How Michael O’Leary turbocharged Ryanair 12:45 Ryanair’s scale advantage 14:00 Technoprobe’s family leadership 16:25 Engaging with Richemont’s Johan Rupert 18:30 Demant’s long-term philanthropic backer 20:55 Providing persistence’s benefits to Scout24 22:55 Selling out of Credit Suisse 24:30 Persistence and alignment 26:10 Book choice

From microloans for farmers to free savings accounts for the ‘unbanked’ to customised insurance for gig workers to a cheaper, faster way for migrants to send money to loved ones: a growing range of services is helping many of the world’s least advantaged citizens increase their financial resilience. Previously, banks and other traditional lending institutions overlooked these customers. But as impact director Ed Whitten explains, by backing the companies now involved, you have an opportunity to improve people’s lives and achieve strong growth. Background: Ed Whitten is an impact director in Baillie Gifford’s Positive Change Strategy. Its dual objective is to provide our clients with attractive returns while contributing to a more inclusive, healthy world. Whitten’s role is to ensure that the companies it holds fulfil the second part of that pledge. In this episode, he explores the topic of financial inclusion, explaining why the companies involved need to do more than simply provide access to loans, insurance and money transfers. Topics include how firms can use data and apps to deliver customised services that address specific people’s needs while protecting them from indebtedness. Whitten also explains how conversations with the companies Positive Change backs can nudge them towards better outcomes, such as providing customers with better financial education. And he explores the importance of helping people gain financial resilience against the effects of climate change and other events that could otherwise devastate their livelihoods. Companies covered include: Nubank – the digital-only bank used by most Brazilian adults that’s also growing in Mexico and Colombia. Grab – the south-east Asian ride-hailing and delivery service that provides loans and insurance to drivers and merchants using its platform. Remitly – the remittance service offering migrants a quick, low-cost and reliable way to transfer money to family and friends. HDFC Bank – the Indian lender expanding its rural branch network to explain face-to-face how its services can put customers on a better financial path. Resources: Case study: Maliga Nubank’s Beyond Access study Positive Conversations 2024 The Song of the Cell Trip Notes: Brazil (UK version / Ex-UK version) Companies mentioned include: Chime Bank Rakyat Indonesia Grab HDFC Bank MercadoLibre Nubank Remitly Timecodes: 00:00 Introduction 02:05 From the British Army to impact investing 03:40 A sustainable, inclusive, healthy world 04:25 The different types of financial inclusion 05:40 Eyes open to the risks of indebtedness 06:45 Volatile repayment rates 07:35 Beyond accessibility: the personalisation of products 09:05 Partnering with CGAP and other development bodies 10:25 Nubank’s Caixinha money boxes 12:45 Nubank’s Mexican banking licence 14:15 Ensuring growth comes with impact 15:20 Grab’s loans and insurance 16:40 Grab’s data-driven approach to risk 19:45 The fast growth of remittances 21:25 Remitly’s cheaper money transfers 22:35 Gaining market share from Western Union 23:40 HDFC Bank’s expanding rural branch network 24:55 Financial inclusion in advanced economies 26:55 The ‘lucrative customers of the future’ 28:15 Book choice

Emerging markets are reshaping the global economy, and a convergence of powerful, long-term trends is accelerating this shift. These include surging demand for commodities, exploding middle-class spending power and booming inter-regional trade. Investment specialist Andrew Keiller reveals some of the standout growth companies positioned to capitalise on this transformation and why now might be the perfect time to take advantage. Background: Andrew Keiller is a partner in Baillie Gifford and an investment specialist in our Emerging Markets Clients Team. In this episode, he discusses how some of the fastest-growing developing economies are driving change in the world and the forces that could further hasten that trend. The discussion builds on his recent paper, Emerging markets in 2050: growth in a changing world, which identifies long-term structural shifts tilting the odds in favour of standout companies in Asia, Latin America and eastern Europe. In the podcast, he expands on this by identifying some of the companies that could be big winners, including: In addition, Keiller discusses the implications of President Trump’s tariffs and why many Chinese companies still offer an exciting investment opportunity. Resources: Emerging markets in 2050: growth in a changing world Emerging markets: our philosophy Emerging markets: rethinking the opportunity Finding high-calibre growth companies in emerging markets (podcast) Luckin Coffee: looking forward Kaspi's super-app South-east Asia’s rising export stars (podcast) SQM: powering the future The Time-Travelling Economist by Charlie Robertson Companies mentioned include: Kaspi.kz Luckin Coffee Sea SK Hynix SQM Timecodes: 00:00 Introduction 01:35 Baillie Gifford beginnings and a trip to Hong Kong 03:15 Transformational trends playing out to 2050 and beyond 05:05 US exceptionalism and multiple spheres of influence 07:25 Rising trade between emerging market nations 08:35 Redesigning Chinese e-scooters for Vietnam and the Philippines 10:15 The possibility of reduced reliance on the US dollar 11:40 Increasing demand for raw materials and semiconductors 12:35 Digital-first companies and underserved communities 14:45 Four types of firms capitalising on long-term growth factors 16:25 SQM’s lithium mines in Chile’s Atacama Desert 17:55 Lithium’s long-term commodity cycle opportunity 18:45 SK Hynix’s high bandwith memory and its role in AI 20:40 Kaspi.kz’s Kazakh super-app 21:40 Kaspi’s expansion plans in Uzbekistan and beyond 23:00 Sea’s founder Forrest Li and importance of culture 24:30 Luckin Coffee’s huge domestic opportunity 25:25 Luckin’s taste for invention 26:40 Investing in China amid a trade clash 28:50 The risk of underexposure 29:40 Book choice 30:55 Investing in Africa

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