The group offers strategies across asset classes, but growth equities remain its key strength and continue to dominate in terms of assets under management.
Baillie Gifford's clientele is led by institutional investors, but in recent years the firm has continued to diversify into the retail channel. In addition to being one of the largest managers of UK-listed closed-end funds, it has been successful in gaining traction internationally over the past decade through its range of Irish UCITS and US mutual funds. The large and patient institutional investor base, closed-end presence, and partnership structure facilitate the firm's long-term approach to investing. This is further reinforced by the remuneration structure, wherein a large component of a fund manager's bonus is based on long-term performance.
The firm comprises many small, focused investment teams, but a strong culture of collaboration is encouraged, and staff turnover is among the lowest in the industry. Investors seem to genuinely like working here, and a distinctive growth philosophy permeates throughout the business. There is a scholarly discipline that promotes in-depth research, and this is accompanied by some strong ties to academic faculties and a nuanced, investor-led approach to risk management. Overall, the culture appears to be just as strong as ever, despite a handful of significant retirements in the last two years, and notable business growth over the past decade.
Manager transitions and people management are typically well-handled at Baillie Gifford, which takes a long-term view on team structures. Graduate intake remains the dominant form of recruiting new investors, and in the past many of these have gone on to work their whole careers here. When there is change, such as a retirement, it is usually telegraphed well in advance to investors.
Elsewhere, the firm remains willing to offer attractive fees and pass on economies of scale. It has demonstrated its willingness to safeguard investors' capital by capping funds approaching capacity and taken a measured approach to new product launches. In all, we think Baillie Gifford benefits from a strong investment-led culture, earning it a High Parent rating.