Beyond the benchmark: Baillie Gifford CEO on why being different pays off
Short Briefings on Long Term Thinking - Baillie GiffordShow Notes
“If you’re trying to find the very best growth businesses on the planet – a benchmark isn’t a sensible place to start.” Baillie Gifford’s chief executive Tim Campbell explains the advantages of our style of active investing, the importance of long-termism and how AI fits into our process.
Background: In April, Tim Campbell became Baillie Gifford’s chief executive and one of its managing partners. Earlier in his career, he was an investment manager before switching to Client Services, where he led our Emerging Markets Clients Team.
In this podcast, he explores how our investment teams adopted a conviction-led approach that centres on each company's merits, regardless of its weighting in benchmark stock indices. He describes what we mean by long-termism and the importance of having the right incentives in place. And he explains why being “out of step” with some market trends helps us serve both society and our clients’ interests. The second half of the show focuses on changes afoot, ranging from further private company investments – including a recent holding in AI lab Anthropic – to our own adoption of artificial intelligence technologies and an exploration of new ways to access our strategies.
Resources: Baillie Gifford: Actual investors Disruption Week Drayton and Mackenzie One Useful Thing: Ethan Mollick’s blog Our history Private company investments Short Briefings on Long Term Thinking The Friction Project
Companies mentioned include: Anthropic Amazon MercadoLibre NVIDIA Runway AI
Timecodes 00:00 Introduction 02:10 From music in the Middle East to investing in Edinburgh 03:15 Making the move to Client Services 05:00 Rewriting the investment playbook 06:30 Client hunger for benchmark agnosticism 07:40 Active versus passive investing 10:20 A mutual understanding with clients 11:55 Drawdowns and hold discipline 14:30 Defining long-termism 17:00 Private company investments 19:30 Investing in Anthropic and Runway AI 24:55 ‘The mission doesn’t change’ 27:35 Book choice
More from Short Briefings on Long Term Thinking - Baillie Gifford
The biggest car-carrying ships on the planet. A chip-testing rig that weighs as much as a small elephant. Investment manager Alex Summers takes us inside some of emerging markets’ least-watched growth companies to explain how his team sees what others have missed. “Often, the crowd is going to be right,” he acknowledges, but when it’s not, long-termism, access to management and asking different questions are key to how his team determines investment opportunities.
“Europe looks more like emerging markets than it does North America,” Joe Faraday, Baillie Gifford’s new head of European equities, suggests in this conversation. He means that growth takes many forms across the continent, creating an eclectic mix of companies to choose from and specific circumstances to consider. As he reveals, it’s led him to reposition the portfolios under his watch, broadening the types of companies they contain.
Baillie Gifford first invested in SpaceX in 2018, nearly eight years before its record-setting stock market listing. Investment manager Luke Ward, who championed the holding, discusses what first drew him to the business, why Starship is critical to its future, and reveals where he’s now looking for another company with industry-upturning potential.
Tokenisation represents an “operating system upgrade” for the investment industry, says Theo Golden, Baillie Gifford’s new head of digital assets. In this episode, they explain what it involves and how it should deliver a better experience, both by reducing the number of middlemen between you and your investments and making your holdings more “useful”.
The US public’s tastes and habits are fragmenting, leading to new consumer behaviours. The shift from a handful of TV networks to an endless supply of streamed shows and social media clips is just one of many causes. Investment manager Dave Bujnowski discusses the characteristics that determine which growth companies should thrive in the resulting ‘high entropy’ environment.