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<p><strong>As with any investment, your capital is at risk.</strong></p>
<p> </p>
<p><strong>Lucie Majstrova (LM):</strong> Witnessing innovation is always so exciting. What felt like magic yesterday quickly becomes a part of our everyday reality. We have AI assistants in our pockets or can get internet connection in the middle of an ocean. Something has changed though. The companies that are driving technological change that we can see all around us are now often private. I'm talking about companies like SpaceX or Anthropic, Databricks or Revolut.</p>
<p>They are now worth tens or even hundreds of billions of dollars, and they became household names before ever listing on an exchange. This poses a problem for investors. How do you invest? How do you access them? So today I'm speaking with Peter Singlehurst. Peter is the head of Private Companies and a partner at Baillie Gifford, and he’s manager of the Schiehallion Fund.</p>
<p>Schiehallion is listed on the London Stock Exchange and aims to give shareholders access to the world's most exceptional private growth companies. So turning to you, Peter. What is going on? Why are companies staying private for so much longer?</p>
<p><strong>Peter Singlehurst (PS)</strong>: There are a number of factors which are driving companies to list much, much later. There's some very hard, tangible factors such as regulation. But I think more importantly, a lot of business founders are realising that they can have a greater degree of focus in scaling their business while it's still private. And so they are delaying the point at which they choose to come to public markets, meaning that more growth has already happened by the time companies list.</p>
<p>And I think this could be best exemplified through a few examples. Take Tesla and SpaceX, Tesla listed back in the early 2010s with a $2 billion market capitalisation. It's still a very small business. Today SpaceX is a very large business. It's still private, and it's worth about $800 billion. So you have a 400x difference in the value of these companies.And that's 400x that is accruing to the private markets that's not accruing to the public markets. And so we created Schiehallion in order to give our clients exposure to that part of these companies’ growth.</p>
<p><strong>LM</strong>: So effectively this is actually a new asset class, right? It sits somewhere between venture and the public market. And it's outside of the access opportunity for public market investors. And you know, the way you're describing it, these are companies that quite often have a product. They have found a market for it. And their revenues are growing very rapidly.</p>
<p>So for this new asset class, private growth equity, how do you quantify it? How do you put parameters around it.</p>
<p><strong>PS</strong>: So we define growth as companies that have proven that they have product market fit, but haven't yet scaled to their full potential. And so what we are analysing and underwriting is business model scalability risk and whether those companies can become very profitable and high return-on-equity businesses. To define that a little more quantitatively, the average company when we first invest is doing about $200 million in revenue.</p>
<p>So these are sizable companies. But on average, our portfolio companies, when we invest, are still growing at about 70% year over year. So still really high growth companies. And in a sense, this is a new asset class in that these companies are today private. But these are actually the businesses that we've always invested in as an institution. It's just that they used to be public companies and today they're private.</p>
<p>And we've been investing in them ever since they started becoming private.</p>
<p><strong>LM</strong>: I think, you know, that's an excellent point because these are large companies. And really the main question for you there is can they continue this growth to compile and then become large standalone businesses and eventually become public? Right. So Baillie Gifford and your team, you have now invested over $10 billion in more than 160 private growth companies around the world.</p>
<p>Schiehallion itself is invested in six out of ten of the world's most valuable private growth companies. So can you tell me a little bit about how this happened, that Baillie Gifford and your team is investing in these well-known, iconic businesses of today?</p>
<p><strong>PS</strong>: I mean, really, we just started doing this to solve a problem for our clients, which was access to the growth of these companies. But we started way back in 2012 when we were fortunate enough to invest in Alibaba, whilst that was still a private company. Today we're looking at about 1,000 companies a year, and we're trying to distill that down to about ten or so that we believe are worthy of our shareholders capital.</p>
<p>We've built out the team, we've built out the infrastructure, to deliver and execute on this. And within Schiehallion we've shown that we can find not just the very best companies that people know of and have heard of, businesses like SpaceX and Anthropic and ByteDance and Databricks and Stripe, but lots of companies that they've probably not heard of as well.</p>
<p>Businesses like Bending Spoons when we first invested in that ,or businesses like Tekever or Avanci, which are truly exceptional growth companies but maybe a little less well-known.</p>
<p><strong>LM</strong>: Great. And you know, what you're describing there is really the advantage of Baillie Gifford investing both on the private and the public side. And you've mentioned some of these lesser well-known companies like Bending Spoons, or Tekever. What do they bring into their portfolio and why? Where do you find them? How do you access them?</p>
<p><strong>PS</strong>: At the simplest level, what we're trying to do with Schiehallion is give clients exposure to the best growth companies in the world, and we believe that those can arise in lots and lots of different places and in lots of different industries. And so, yes, it's important that we own and invest in those companies that everyone's heard of that are really exceptional, but also that we are trying to do the hardest thing as well, which is find the companies that people haven't today heard of, but maybe they'll come to hear of once these companies grow to a much greater levels of scale.</p>
<p>There's no shortcut to doing that. You know, we've been doing this for a really long time, so we know this market well, and every year, the team travels the world looking for these companies and investing in the tiny number of ones that we believe are really quite fantastic.</p>
<p><strong>LM</strong>: And so now, Schiehallion almost 7 years in, you’ve fully invested. Actually, 13% of the portfolio is now in companies, that you bought in the private markets but now they are public. How do you see the opportunity going forward? What excites you?</p>
<p><strong>PS</strong>: So I remain really excited by the growth and value creation that's going to happen over the coming years from the companies within the Schiehallion portfolio. I really believe we own some of the world's best growth-stage companies. So that's mainly what excites me. But I'm also excited by the companies that we will invest in over the coming years.</p>
<p>We get to cherry pick from the world's best growth stage companies, and each year we'll make a handful of new investments from the fund as we look to realise some of the gains from those companies that have really delivered for our clients. And we can recycle capital back into new businesses that will drive returns within Schiehallion for many years to come.</p>
<p><strong>LM</strong>: Well, thank you very much, Peter.</p>
<p><strong>PS</strong>: Thank you.</p>
<p> </p>
<h3 class="TABLEHEADER1212pt">The Schiehallion Fund Limited</h3>
<p class="TABLEHEADER1212pt"><strong>Annual past performance to 31 December each year (net %)</strong></p>
<table border="1" style="border-collapse: collapse; width: 100%; border-width: 0px; height: 56.0001px;">
<tbody>
<tr style="height: 18.6667px;">
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px;"> </td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px;"><strong>2021</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px;"><strong>2022</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px;"><strong>2023</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px;"><strong>2024</strong></td>
<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(0, 0, 0); border-image: initial; padding: 10px; height: 18.6667px;"><strong>2025</strong></td>
</tr>
<tr style="height: 18.6667px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">Share price</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">101.4</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">-66.8</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.6667px;">-21.3</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.6667px;">47.3</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">29.8</td>
</tr>
<tr style="height: 18.6667px;">
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">Net asset value</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">40.4</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.6667px;">-34.2</td>
<td style="border: 1px solid rgb(204, 204, 204); padding-top: 10px; padding-right: 10px; padding-bottom: 10px; height: 18.6667px;">-0.6</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">11.1</td>
<td style="border: 1px solid rgb(204, 204, 204); padding: 10px; height: 18.6667px;">34.9</td>
</tr>
</tbody>
</table>
<p> </p>
<p>Source: Morningstar. Total return in USD. Ordinary shares.</p>
<p>Past performance is not a guide for future returns.</p>
<p>The base currency of the Trust is US Dollars. Where an investor holds shares priced in US Dollars, their return in any currency other than US Dollars will also be affected by exchange rate movements.</p>
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<p><strong>Important information </strong></p>
<p>This communication was produced and approved in January 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking. </p>
<p>Private Company assets may be more difficult to buy or sell, so changes in their prices may be greater. There is no guarantee that private companies will become publicly traded companies in the future.</p>
<p>The investment trusts managed by Baillie Gifford & Co Limited are listed on the London Stock Exchange and are not authorised or regulated by the FCA.</p>
<p>Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). The investment trusts managed by Baillie Gifford & Co Limited are listed on the London Stock Exchange and are not authorised or regulated by the FCA. The value of its shares, and any income from them, can fall as well as rise and investors may not get back the amount invested. A Key Information Document is available at bailliegifford.com. </p>
<p>Baillie Gifford Overseas Limited (BGO) provides investment management and advisory services to non-UK clients. BGO is wholly owned by Baillie Gifford & Co. This information is provided to you on the basis that you are a “wholesale client” within the meaning of section 761G of the Corporations Act 2001 (Cth) (“Corporations Act”). In no circumstances should this information be made available to a “retail client” within the meaning of section 761G of the Corporations Act. This information contains general information only. It does not take into account any person’s objectives, financial situation or needs.</p>
<p> </p>
