James Anderson, one-half of the investment duo that manages the trust, has decided to retire. While he has generated an impressive long-term track record, I’d still buy the shares and here’s why.
Tom Slater and James Anderson are the investment brains behind Scottish Mortgage Investment Trust. While Anderson has announced his retirement, Slater will continue to manage the concentrated portfolio.
When I’m buying a trust, I’m really paying for the fund managers’ expertise. I’ve huge admiration for what Slater and Anderson have achieved. But after nearly four decades at Baillie Gifford, the asset manager behind the trust, I don’t blame Anderson for going out on a high.
I think Anderson has been key in the leadership and growth of Baillie Gifford. He’s certainly been part of the success of Scottish Mortgage Investment Trust. I can’t forget the impressive profits generated from the Tesla holding. But I guess all good things must come to an end.
I don’t think all is lost yet as Anderson will stay until April 2022. This means that Baillie Gifford has given investors a one-year notice period. Given Anderson’s tenure with the asset manager, I can’t say I’m surprised that he’s sailing off into the sunset. I think he’s done a fantastic job with the trust.
I think Anderson’s boots will be hard to fill but Baillie Gifford has a good track record when in comes to transition processes. It’s worth noting that while Slater and Anderson are the lead names on Scottish Mortgage Investment Trust, they are supported by a diverse investment team.
I reckon Baillie Gifford has developed several talented successors in Anderson’s team. I think life after Anderson will go on. So what will be happening now with Scottish Mortgage Investment Trust?
Well, Slater will of course have to step up as the main person behind the trust. But to alleviate the pressure, he will be supported by Lawrence Burns, who will act as deputy fund manager of the global portfolio.
Burns manages some of Baillie Gifford’s funds and so he already has an influential role at the asset manager. In fact, he’s an experienced member of the long-term global growth team that Anderson founded.
Some investors may be nervous over this change in leadership. It comes after the shares have been hit by a tech sell-off, a theme which is very prominent through the portfolio. There have also been concerns over valuations of some of the private tech companies. After all, 2020 was a stellar year and there’s no guarantee this performance can be replicated in 2021.
But I’m not too worried about this. I reckon both Slater and Burns can continue to manage Scottish Mortgage Investment Trust successfully. Both have worked with Anderson for some time, and have learnt their trade well. So I don’t expect much chopping and changing of the portfolio anytime soon. Hence I’d grab this opportunity and would buy Scottish Mortgage Investment Trust in my portfolio.
Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.