Short Briefings on Long Term Thinking - Baillie Gifford

Which UK growth firms have the greatest long-term potential? Prime Minister Sir Keir Starmer has pledged to “turbocharge” his government’s growth strategy after the US’s introduction of new tariffs. It promises to prioritise a handful of growth-driving sectors, including advanced manufacturing, the creative industries and ‘digital and technologies’. Our head of UK equity, Iain McCombie, has already invested in leading companies in each of these fields. In this episode, he discusses their ambitious growth plans, the importance of adaptability and why he remains confident of delivering strong long-term returns despite the trade restrictions.   BACKGROUND: Iain McCombie is a partner in Baillie Gifford, our head of UK equity and joint investment manager of the Baillie Gifford UK Growth Trust. He also jointly manages our flagship Managed Fund. In this episode, he discusses a selection of his portfolio companies that align with the growth-driving sectors the UK government promises to prioritise in its Invest 2035 strategy. These holdings include: *  the engineering company Renishaw, which specialises in measuring and manufacturing systems providing high accuracy and precision to customers including the semiconductor industry * the wargame miniatures maker Games Workshop, which is embarking on a TV and movie deal with Amazon * the self-driving car software developer Wayve, which signed a deal with Nissan to use its technology shortly after we recorded this episode * the financial services company Experian, whose vast collection of consumer debt data could become more valuable as artificial intelligence opens the door to new uses In addition, McCombie discusses how the government’s ambitious housebuilding targets could benefit Volution Group, whose ventilation products defend against dampness and mould, and the reason why his passion for history has taught him to be an optimist.     RESOURCES: Baillie Gifford UK Growth Trust [https://www.bailliegifford.com/funds/baillie-gifford-uk-growth-trust/] Investing in the UK’s best growth companies (webinar) [https://www.bailliegifford.com/insights/ic-video/2025-q1-uk-growth-trust-investing-in-the-uks-best-growth-companies-10053367/] Creo Medical: at the spearhead of surgery [https://www.bailliegifford.com/insights/ic-article/2024-q3-trust-49-creo-medical-at-the-spearhead-of-surgery-10049581/] UK Growth Trust: a 2024 perspective [https://www.bailliegifford.com/insights/ic-video/2024-q3-uk-growth-trust-s-2024-perspective-10049499/] Calder Walton: Spies – the epic intelligence war between East and West [https://www.hachette.co.uk/titles/calder-walton/spies/9781408714959/]     COMPANIES MENTIONED INCLUDE: AJ Bell [https://www.ajbell.co.uk/] Auto Trader [https://www.autotrader.co.uk/] Experian [https://www.experian.co.uk/] Games Workshop [https://www.warhammer.com/en-GB/home] Kainos [https://www.kainos.com/] Renishaw [https://www.renishaw.com/] Volution Group [https://www.volutiongroupplc.com/] Wayve [https://wayve.ai/] Wise [https://wise.com/] TIMECODES: 00:00 Introduction 01:35  Three decades at Baillie Gifford 02:20  UK equities’ appeal 02:55  Jointly managing the UK Growth Trust with Milena Mileva 03:35  The relationship with the Trust’s independent board 04:40  The UK government’s growth plans 05:40  Responding to US tariffs 06:50  Taking a long-term perspective 07:55  Advanced manufacturing: Renishaw 09:45  Industrial 3D printers 10:50  Creative industries: Games Workshop 12:45  Licensing Warhammer to Amazon 14:15  Digital and technologies: Wayve’s self-driving vehicle software 16:45 Kainos and AI 19:20  Auto Trader car-selling digital business 21:35  Financial services: Wise and AJ Bell 23:35  Experian’s consumer debt data 25:20  Volution Group: ventilation for new homes 27:25  The advantage of active investing 28:35  Book choice and lessons from history

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.   Background   Stephen Paice is a partner in Baillie Gifford, our Head of European Equities, an investment manager on the Baillie Gifford Growth Trust and European Fund, and a member of our International All Cap Portfolio Construction Group. In this episode of Short Briefings…, he explores why European stocks have been trading at levels that make them appear historically cheap, what might cause opinion to turn, and how that relates to his pursuit of long-term exceptional growth. Topics discussed include why some companies are more resilient than others to trade tariffs and other price pressures, changing attitudes to regulation, and the importance of culture. Stephen also spotlights four categories of growth companies he believes offer huge promise: * the biological revolution: firms pioneering new treatments thanks to technological advances and deeper scientific understanding, with a focus on Novo Nordisk, Lonza and Camurus * dominant digital platforms: businesses carving out leading positions in niche markets, with special mention of Spotify and Adyen * semiconductors: companies fulfilling critical roles in the computer chip supply chain, including ASML and ASM International * luxury goods: companies deriving powerful advantages by bringing historic and prestigious brands under the same roof, including LVMH and Richemont   Resources Future stocks: our best ideas in Europe [https://www.bailliegifford.com/insights/ic-video/2024-q3-future-stocks-our-best-ideas-in-europe-10049780/] Europe’s hidden tech titans [https://www.bailliegifford.com/insights/ic-video/2024-q3-europes-growth-gems-10049500/] Benjamin Labatut: The Maniac [https://pushkinpress.com/book/the-maniac-2/] Gary Klein: Seeing What Others Don’t [https://www.hachette.co.uk/titles/gary-klein/seeing-what-others-dont/9781857886788/] Paul Kalanithi: When Breath Becomes Air [https://www.penguin.co.uk/books/431763/when-breath-becomes-air-by-kalanithi-paul/9781784701994] Richard Thomson: Apocalypse Roulette [https://books.google.co.uk/books/about/Apocalypse_Roulette.html?id=FBwMNAAACAAJ&redir_esc=y] Companies mentioned include   Adyen [https://www.adyen.com/] ASM International [https://www.asm.com/] ASML [https://www.asml.com/en] Camurus [https://www.camurus.com/] Lonza [https://www.lonza.com/] LVMH [https://www.lvmh.com/] Novo Nordisk [https://www.novonordisk.com/] Richemont [https://www.richemont.com/] Schibsted Marketplaces [https://schibsted.com/] Spotify [https://www.spotify.com/] Timecodes 00:00  Introduction 01:45  From games of chance to European equities 03:30  The valuation opportunity 04:35  Addressing uncertainty and political instability 06:35  President Trump’s trade tariffs 08:30  Regulation and innovation 10:45  Our long-term growth investment philosophy 13:00  The case for Novo Nordisk 14:35  Tackling Wegovy’s muscle mass loss 15:25  Lonza’s growing market for biologics 16:50  Camurus’s FluidCrystal technology 18:05  Dominant digital platforms with network effects 19:40  Spotify chief executive Daniel Ek’s focus on customers 21:55  The importance of Adyen’s culture and leadership 24:40  ASML and ASM International’s semiconductor tools 27:25  Luxury conglomerates LVMH and Richemont 30:00  The advantage of ‘family involved’ companies 31:10  Being patient and putting up with volatility 31:55  Book picks 32:55  Spotting inconsistencies

Three technologies – quantum computing, reusable space rockets and nuclear fusion – could change the trajectory of human progress. Investment manager Luke Ward explains how a trio of private companies are bringing them closer to fruition.   Background: Luke Ward is an investment manager in Baillie Gifford’s Private Companies Team and recently became co-manager of the Edinburgh Worldwide Investment Trust. In this episode of Short Briefings…, he discusses three companies developing groundbreaking technologies and building innovative businesses as they do so: * PsiQuantum, which aims to create the world’s first useful quantum computers * SpaceX, which is well on its way to developing the first fully reusable space rocket, with a view to ultimately transporting people to Mars * SHINE Technologies, which is commercialising applications of nuclear fusion on the path to delivering a clean and safe energy source for the future Among the topics Ward covers are how photon-based quantum computers could drive progress in agriculture and batteries, among other industries. He also discusses how the Starlink satellite broadband provides a stepping stone to SpaceX’s larger ambitions. And he explains how SHINE’s work on detecting flaws in mission-critical aerospace components and making a new cancer treatment possible bring it closer to harnessing the reaction that powers the sun.   Resources: PsiQuantum: making the leap to quantum computing [https://www.bailliegifford.com/insights/ic-article/2024-q3-trust-49-psiquantum-the-leap-to-quantum-computing-10049575/] PsiQuantum: stock story [https://www.bailliegifford.com/insights/ic-video/2024-q2-stock-story-psiquantum-10047608/] SHINE Technologies: an interview with chief executive Greg Piefer [https://www.bailliegifford.com/insights/ic-article/2023-q3-shine-lights-the-way-10036137/] SpaceX and other private company trailblazers [https://www.bailliegifford.com/insights/ic-article/2024-q4-private-companies-investing-in-trailblazers-10051127/] Starlink: broadband from above [https://www.bailliegifford.com/insights/ic-article/2024-q1-trust-48-starlink-10045464/] Edinburgh Worldwide Investment Trust [https://www.bailliegifford.com/funds/edinburgh-worldwide-investment-trust/] Your vote, EWIT’s future [https://www.bailliegifford.com/insights/ic-video/2025-q1-your-vote-ewit-s-future-10052812/] EWIT: Saba vote [https://www.trustewit.com/]     Companies mentioned include: PsiQuantum [https://www.psiquantum.com/] SHINE Technologies [https://www.shinefusion.com/] SpaceX [https://www.spacex.com/] Timecodes: 00:00 Introduction 01:50  From mechanical engineering to investment 02:55  Technological innovation informing business innovation 03:45  Quantum computing versus the ‘classical’ approach 04:55  Using quantum computers to disrupt chemical fertilisers 06:10  PsiQuantum’s semiconductor supply chain advantage 07:20  A photonic approach to computing 08:05  Signs that PsiQuantum could succeed 09:45  PsiQuantum’s potential business model 10:30  Partnering with Mitsubishi Chemical and Mercedes-Benz 11:35  SpaceX: satellite launches and advanced rockets 12:35  Starlink’s high-speed internet from orbit 13:40  Connecting smartphones directly to Starlink 15:05  The investment case for Mars 16:55  Leading Baillie Gifford’s SpaceX investment in 2018 19:35  Considering other space industry investments 10:21  Nuclear fusion v fission 22:25  SHINE Technologies’ stepping stone approach 23:20  From advanced imaging to radiopharmaceuticals 24:15  Clinical trials for prostate cancer treatment Lutetium-177 24:40  Recycling nuclear waste 25:50  Saba vote: giving the public access to private companies 27:35  Investing in geothermal energy 28:30  Seeking inspiration in Silicon Valley

One way to find great investment opportunities is to ask yourself what must change over the years ahead. In this episode, Baillie Gifford partner Stuart Dunbar explores the increased use of robotics to fill gaps in the workforce and medical advances that help keep healthcare affordable, among other transformational themes.   Background: Stuart Dunbar is a client relationship director and coordinates Baillie Gifford’s global marketing and product development activity, which includes responsibility for the firm’s Actual investors campaign [https://www.bailliegifford.com/en/uk/individual-investors/about-us/actual-investors/?utm_campaign=Actual+3&utm_medium=shortlink&utm_source=advert]. For this Short Briefings… episode, he challenged himself to identify five transformational growth drivers that are both inevitable and investable. His picks cover: * the rise of robotic systems that can make sense of their immediate environment and act autonomously * the intelligent design of drugs and other efforts to deliver less costly, more effective healthcare * the energy transition to renewables and electrification of transport * greater dependence on the infrastructure underpinning digital payment systems * the dawn of automated transport, including driverless trucks and delivery drones Dunbar explains the factors making these forces of change necessary, including the ageing populations of many developed countries, the resulting labour shortages and rising medical budgets. He also names some of the companies we have backed that could benefit, either by pioneering new or better ways of doing things or by playing critical roles in the involved supply chains. These range from John Deere & Co, whose self-driving tractors and precision-applied pesticide technologies help farmers increase yields and cut costs, to Nexans and Prysmian, whose extra-high-voltage cables connect offshore wind turbines to onshore energy grids. Resources: Actual investing: why thinking differently matters [https://www.bailliegifford.com/en/uk/individual-investors/insights/ic-article/2023-q2-actual-investing-why-thinking-differently-matters-10030238/] Christiana Figueres: stubborn optimism [https://www.globaloptimism.com/why-stubborn-optimism] Eureka Alert: Cheryl Mehrkar’s robotic surgery [https://www.eurekalert.org/news-releases/1065599] Michael Lewis: Going Infinite [https://www.penguin.co.uk/books/456895/going-infinite-by-lewis-michael/9781802063516] Stuart Dunbar on growth investing (video) [https://www.bailliegifford.com/insights/ic-video/2023-q2-investment-beliefs-global-videos-growth-investing-10020541/] Zeke Faux: Number Go Up [https://www.weidenfeldandnicolson.co.uk/titles/zeke-faux/number-go-up/9781399611343/] Past Short Briefings… episodes [https://www.bailliegifford.com/podcasts]   Companies mentioned include: Adyen [https://www.adyen.com/] Amazon [https://www.aboutamazon.com/about-us] Aurora Innovation [https://aurora.tech/] CATL [https://www.catl.com/] Coupang [https://www.aboutcoupang.com/] Deere & Company [https://www.deere.com/en/] Enphase [https://enphase.com/] Intuitive Surgical [https://www.intuitive.com/] Keyence [https://www.keyence.com/] Moderna [https://www.modernatx.com/] Netflix [https://about.netflix.com/en] Nexans [https://www.nexans.com/] Novo Nordisk [https://www.novonordisk.com/] Nubank [https://nubank.com.br/] Prysmian [https://www.prysmian.com/] Redwood Materials [https://www.redwoodmaterials.com/] Remitly [https://www.remitly.com/] Renishaw [https://www.renishaw.com/] Wise [https://wise.com/] Zipline [https://www.flyzipline.com/] Timecodes: 00:00 Introduction 1:30    Starting out in Hong Kong 2:20    Joining Baillie Gifford 3:20    The importance of optimism 4:30    Five inevitable, investable themes 5:45    Robotics and demographics 6:40    Investing in the rise of autonomous systems 8:30    Renishaw’s sensors 10:05  Intuitive Surgical and Deere & Co’s seeing robots 12:15  The intelligent design of drugs and Recursion Pharmaceuticals 15:40  Lower-cost healthcare 16:45  Selectively picking biotech winners 17:55  The energy transition and President Trump 19:40: Stubborn optimism 21:10  Undersea cables and solar installation 23:11  A new generation of payment providers 26:00  Delivery drones and self-driving vehicles 27:40  Focus on possibilities and what’s changing 28:35  Book picks – exploring cryptocurrencies

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 [https://www.bailliegifford.com/disruptionweek] Building back: the great US infrastructure opportunity [https://www.bailliegifford.com/insights/ic-article/2024-q1-revitalising-uncle-sam-10045408] Spotting the winners from the great US infrastructure renaissance [https://www.bailliegifford.com/insights/ic-article/2024-q4-spotting-the-winners-from-the-great-us-infrastructure-renaissance-10051043/]   Companies mentioned include:   Advanced Drainage Systems [https://www.adspipe.com/] Eaton [https://www.eaton.com/gb/en-gb.html] Comfort Systems USA [https://comfortsystemsusa.com/] Martin Marietta [https://www.martinmarietta.com/] NVIDIA [https://www.nvidia.com/en-us/] Stella-Jones [https://www.stella-jones.com/en]   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”