REG - Schiehallion Fund Schiehallion - MNTN - The Schiehallion Fund Limited Annual Results
26/03/2025 07:00
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RNS Number : 1311C Schiehallion Fund Limited (The) 26 March 2025
RNS Announcement
The Schiehallion Fund Limited
Regulated Information Classification: Annual Financial and Audit Reports
Legal Entity Identifier: 213800NQOLJA1JCWXQ56
Results for the year to 31 January 2025
For further information please contact:
Alex Blake, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Four Communications
Tel: 0203 920 0555 or 07872 495396
26 March 2025
The following is the Preliminary Results Announcement for the year to 31
January 2025 which was approved by the Board on 25 March 2025.
Chairperson's statement
The Schiehallion Fund Limited (the 'Company' or 'Schiehallion') seeks to
generate capital growth for investors through long-term minority investments
in later stage private businesses that the Company considers to have
transformational growth potential and to have the potential to become publicly
traded.
Investment performance
During the financial year to 31 January 2025, the Company's ordinary share net
asset value ('NAV') returned 12.9% and share price returned 51.0%. The share
price discount to NAV narrowed from 39.6% to 19.2%. Further commentary on
performance is included in the Investment Manager's report below.
Over the period from 27 March 2019 (launch date) to 31 January 2025, the
Company's ordinary share NAV returned 34.1% and price returned 8.0%.
Capital allocation
In November 2023, the Board announced a capital allocation update, noting
that:
• its priority is to ensure that the Company has sufficient
capital to deliver on its objectives, including supporting existing
investments and satisfying the Company's ongoing working capital requirements;
• it believed that the ordinary shares represented an
attractive investment opportunity at a deep discount to NAV;
• the Company intended to allocate up to US$20m towards
share repurchases given the limited available capital at the current time; and
• it would keep this capital allocation and associated share
buyback policy under review.
Following this announcement, over the year to 31 January 2025, the Company
bought back 5.2 million shares at a cost of approximately $4.2 million. Since
the year end, the Company has bought back an additional 2.75 million shares.
In aggregate, the Company has bought back 10.5 million shares, for
consideration of $9.1 million, since November 2023.
The Company will be seeking authority to renew the buyback authority for the
ordinary shares at the forthcoming Annual General Meeting ('AGM'). This
authority will expire at the conclusion of the AGM in 2026.
Costs and charges
The ongoing charges for the ordinary shares as at 31 January 2025 were 0.92%
(2024 - 0.85%).
The Company has a tiered management fee, which means that the benefits of
scale are shared with investors. In addition, no management fee is charged on
cash. The Managers absorb the valuation costs and legal costs associated with
making private company investments.
Earnings and dividend
The Company's priority is to generate capital growth over the long-term. The
Company therefore has no dividend target and will not seek to provide
shareholders with a particular level of distribution. This period the net
revenue return per ordinary share was negative 0.39 cents (year to 31 January
2024, negative 0.12 cents). The Board is recommending that no final dividend
be paid.
Board
Members of the Board come from a broad variety of backgrounds and the Board
can draw on a very extensive pool of knowledge and experience. Directors'
biographies can be found on pages 51 and 52 of the Annual Report and
Financial Statements.
All the Directors are subject to annual re-election at the AGM in May.
Annual General Meeting
The AGM will be held at 11.15am GMT on Thursday 22 May 2025 at the offices of
Alter Domus (Guernsey) Limited, North Suite First Floor, Regency Court,
Glategny Esplanade, GY1 1WW. Shareholders are reminded that they are able to
submit proxy voting forms before the applicable deadline on Tuesday 20 May
2025 and also to direct any questions for the Board or Managers in advance by
email to adgg-aafa-f@alterdomus.com or call Alter Domus (Guernsey) Limited on
+44 (0) 1481 742 250.
The Board is seeking approval for amendments to the Company's Articles of
Incorporation. Resolution 10 of the Notice of Annual General Meeting, which
will be proposed as a special resolution, seeks shareholder approval for the
adoption of new Articles of Incorporation (the 'New Articles'). As permitted
by section 153(2) of The Companies (Guernsey) Law, 2008, the Board is
proposing to amend article 122(5) of the existing Articles of Incorporation so
as to allow the directors (acting in their entire discretion) to determine the
location of board meetings rather than, as is currently the case, the location
of the meeting being deemed to take place from where the Chairperson
participates at the start of the meeting.
Information on the resolutions can be found on pages 57 and 58 of the Annual
Report and Financial Statements. The Directors consider that all resolutions
to be put to shareholders are in their and the Company's best interests as a
whole and recommend that shareholders vote in their favour.
Investment outlook
This past year has been another year of geo-political tensions and
uncertainties in the global economy. The decline in inflation and thus
interest rates and the cost of capital have, however, supported markets and
helped companies plan for growth.
Despite ongoing geo-economic uncertainties, the Board and the Investment
Manager are optimistic about the outlook for the Company with its focus on the
long-term and investing in companies which have exceptional growth potential.
The Company invests in companies which are not widely accessible in public
markets. The Board is also positive about the pipeline of private companies
that the Investment Manager has access to. The Board and the Investment
Manager are confident in the investment outlook for the Company.
As the Company enters into its sixth year since its initial public offering
('IPO'), the Board continually reviews its trading segment and domicile in
order to ensure that both remain appropriate to deliver shareholder value.
After carefully reviewing the Company's global portfolio, including having
taken initial professional tax advice, the Board intends to seek further legal
and tax advice on potentially becoming UK tax resident and joining the UK's
investment trust regime. The Board will provide further updates to
shareholders in due course, including seeking any necessary approvals.
Dr Linda Yueh CBE
Chairperson
25 March 2025
For a definition of terms see Glossary of terms and Alternative Performance
Measures at the end of this announcement.
Past performance is not a guide to future performance.
Investment Manager's review
Reflections
When reflecting on global developments during the twelve months to 31 January
2025, a potentially instructive historical comparison could well be the year
1968. This was a year marked by a major political realignment in the United
States, where the Democratic Party - facing internal divisions exacerbated by
the Vietnam War and civil rights issues - ceded power to the Republicans under
Richard Nixon. This would turn out to be a key shift in the political
landscape of the United States and arguably marked the rise of modern
conservatism. On the geopolitical front the Vietnam War was proving
increasingly fractious, and represented the most active theatre of the wider
Cold War which saw two superpowers vie for global ideological, technological
and military dominance. Notably the technological dimension of this conflict
extended into space, and the year 1968 saw significant developments in this
area as well, with the United States achieving a major milestone by sending
the first crewed mission, Apollo 8, to orbit the moon. This achievement was a
significant step in efforts to surpass the Soviet Union in space exploration.
Back on Earth developments were well underway in 1968 for the launch of the
Advanced Research Projects Agency Network ('ARPANET') the following year. This
was a pioneering computer network project initiated by the United States
Department of Defence in the late 1960s and laid the groundwork for the modern
internet, introducing key technologies and concepts still in use today.
Tangentially related to this was the founding - also in 1968 - of Intel by
Robert Noyce and Gordon Moore. Intel would go on to become a cornerstone of
the semiconductor industry and this development would prove crucial for the
evolution of computing technology more broadly.
So, when trying to summarise notable historical developments in 1968, we have
a year which saw a major political realignment in the United States, active
military conflicts around the globe, a tense Cold War between superpowers,
important strides in mankind's relationship with space, and technological
advancements in computing that would ultimately shape the globe in ways that
were hard to fully fathom at the time. We would posit that such a description
can just as easily be applied to 2024. This has been a year in which we have
witnessed a drastic and sudden realignment of American politics with the
arrival of Donald Trump's second term in office. We have seen the continuation
of military conflicts in the Ukraine and the Middle East, coupled with
elevated tensions between the United States and China in what can broadly be
characterised as a potentially new Cold War. Meanwhile, in the skies above us,
portfolio holding SpaceX has continued to redefine what might be possible in
space; and closer to home, continued developments in computing and artificial
intelligence are shaping the world in ways that are difficult to quantify
accurately.
But what are we to make of these historical parallels beyond the well-trodden
observation that while history does not necessarily repeat itself, it often
rhymes? We would argue that at times of significant turbulence and
uncertainty, it is natural - and sometimes necessary from a societal point of
view - to be more focused on shorter-term concerns. However, from an
investment perspective, we have the luxury to remain steadfastly focused on
the long term, knowing that short-term uncertainty can often mask long-term
opportunity. The Schiehallion Fund exists to find precisely such
opportunities, and despite the uncertain historical moment that we arguably
find ourselves in currently, we are excited about the continued progress being
made by the Company's holdings in shaping the world around us, as well as by
the range of new opportunities currently being presented to us.
Performance
The twelve months to 31 January 2025 represented a strong period for public
markets, particularly within the United States, while private markets saw an
increase in acquisitions, exits and overall deal volume compared to the prior
year. This improvement in sentiment was largely the result of a moderation of
previous headwinds such as elevated interest rates and volatile markets more
broadly. The net asset value ('NAV') total return for Schiehallion over the
period was +12.9%, while the share price total return was +51.0%. The Company
enjoyed a particularly strong final quarter of its financial year, driven in
part by a significant valuation uplift in its largest holding, SpaceX, as well
as notable share price increases among public holdings, Affirm, Wise and Warby
Parker, over this three-month period.
Performance for the full twelve-month period to 31 January 2025 was similarly
driven by a combination of valuation increases in private holdings and
positive share price movements among selected public holdings. In this regard
SpaceX (+86% valuation increase) continues to showcase remarkable operational
progress - most strikingly through the mechanised capture of its giant
Starship booster rockets in recent months. Other notable private contributors
to performance included Italian digital consumer application acquirer, Bending
Spoons (+89%), and the Chinese social media giant, ByteDance (+33%). Among the
public holdings, the US point-of-sale credit provider, Affirm (+51%), was also
a top five contributor to Company performance as it continues to expand its
offering, most notably into the United Kingdom.
The largest detractors from NAV performance over the period were German online
real estate platform, McMakler, and Swedish electric vehicle battery maker,
Northvolt. Both holdings saw their valuations close to fully written down
during the period. In the case of McMakler, the company has been facing a
challenging German macroeconomic environment which has particularly affected
the real estate market. This necessitated a recapitalisation of the business
during the second half of the year, with the focus directed towards cost
management in the pursuit of profitability. Northvolt has experienced
significant operational challenges with regards to scaling manufacturing
across its facilities. This, coupled with increased competition from China and
a slowdown in electric vehicle demand more broadly, led to the company filing
for Chapter 11 bankruptcy in the US during the fourth quarter of 2024.
Other detractors to performance included financial solutions provider, Brex
(-30% valuation decrease), Australian online pet supply company, Pet Circle
(-44%) and German bus and train operator, Flix (-27%).
Portfolio
From an overall perspective, the Company holdings remain well capitalised.
More than 80% of the private cohort within the portfolio (by capital weight)
has a cash runway of more than two years. The painful but necessary re-set
associated with the 2020-2022 capital cycle has seen businesses emerge in a
healthier state characterised by more disciplined spending and more efficient
operations. We remain confident about the resilience of the existing names
within the Company, as well as by their growth prospects going forward.
Aggregate revenue growth (weighted by capital) remains strong across the
portfolio, standing at 34%. This figure was 42% for the top ten holdings
within the Company specifically. These growth rates are accompanied by a
healthy average gross margin profile: 47% for the portfolio as a whole, and
58% for the top ten holdings. Approximately 40% of the portfolio was
EBITDA-profitable at the reporting date.
The top five holdings within the Company continue to showcase our ability to
find varying types of growth across different geographies. SpaceX remains one
of the highest conviction holdings as it pursues an enormous market
opportunity by generating large and growing revenues coupled with compelling
profitability dynamics. Its truly differentiated product, which straddles both
its core launch business and Starlink satellite business, underpins arguably
one of the most robust competitive advantages we have ever seen. Towards the
end of 2024 the company reached a publicly disclosed valuation of $350 billion
after an employee tender offer, thereby making it the most valuable private
company in the world. Having first invested in SpaceX in 2019, it has
generated a more than six times return over the course of our holding period.
ByteDance continues to generate significant news flow regarding the potential
banning of its short-form video application, TikTok, in the United States. As
always, we believe it is important to take a step back and remain focused on
the wider picture. Our investment case continues to rest on the scale of
ByteDance's domestic opportunity in China, and the company is now generating
similar revenues to public market US peer, Meta, but growing faster. Elsewhere
we see continued strong operational execution from Italian application
acquirer, Bending Spoons, as it proceeds at pace with its core strategy of
acquiring digital applications and improving the underlying products,
monetisation and growth of these applications. Public financial technology
holdings, Wise and Affirm, also continue to improve and expand their
respective offerings.
While the IPO market remained muted over the course of 2024, we continue to
believe that it is available to the right companies at the right price. One
such example during the period was medical diagnostics solution provider,
Tempus AI, which listed on the Nasdaq in June. While it is still early in its
public market journey, revenues continue to grow at more than 30%, and it has
been one of the top contributors within the Company since inception.
While we saw mostly strong operational performance across the Company's
holdings during the period, some holdings did, however, face significant
challenges. Outside the aforementioned circumstances pertaining to McMakler
and Northvolt, another detractor from performance was blockchain technology
company, Blockstream, which faced operational challenges that led to a
recapitalisation of the business that we opted not to take part in. When
reflecting on some of these individual struggles experienced by certain
holdings, we are cognisant that the pursuit of high growth opportunities -
particularly those within private markets - will at times bring about
disappointing outcomes. While it is important to take relevant learnings from
each individual instance, it should also be borne in mind that investing in
opportunities with genuine asymmetric upside carries inherent uncertainty. We
will continue to pursue precisely these opportunities.
It is inarguable that some of the most important global companies now reside
within private markets - something which is likely to increasingly be the case
in the future. At the reporting date, Schiehallion had holdings in half of the
world's ten largest private companies, namely, SpaceX, ByteDance, Stripe,
Databricks and Chime. The Company therefore offers a compelling path for
shareholders to gain exposure to some of the most important private businesses
of our time. At the same time, we continue to hunt for the next generation of
names that will make their way onto this list in the future.
Deployment
We continue to balance three capital deployment options, namely initiating new
investments, making further investments into the existing portfolio, and
conducting share buybacks. Our core task remains the efficient deployment of
capital across these three levers. In this regard our pace of deployment
stepped up during the period - largely a function of the opportunity set that
we are currently being presented with. While the broad structural change of
companies staying private for longer continues to define the shape of our
pipeline, the recent cyclical change during the 2020-2022 period is also
having an effect. On the one hand, we have seen businesses emerge stronger and
more disciplined after the previous over-abundance of capital during 2020 and
2021 particularly. However, there has also been an accompanying re-set in
valuations, meaning that we have been able to invest in better, faster growing
businesses at much more attractive prices, especially compared to public
market peers in many cases.
Over the course of 2024, we considered more than 600 financing rounds, which
led to 60 first cuts of research, followed by 30 deep dives and ultimately six
of these names making their way into the Company as new holdings. Once again
there was a range of geographies and industries on display as we continue to
find opportunities both inside and outside of traditional fertile hunting
grounds such as the United States. New US holdings comprised Tenstorrent, a
semiconductor design company, and Runway AI, a generative-AI video laboratory
assisting creators at every step of their process. Elsewhere we made
investments in Vinted (a Lithuania-based peer‑to-peer online second-hand
marketplace operating primarily across Europe), Tekever (a Portuguese
surveillance drone maker), Bolttech (a Singapore-based embedded insurance
platform), and Zetwerk (an Indian outsourced manufacturing marketplace).
In addition to these new holdings, we also made follow-on investments in
Bending Spoons and data intelligence platform, Databricks, coupled with the
recapitalisation of McMakler. Two realisations were made during the period,
comprising a listed sale of sustainable apparel maker, Allbirds, and an
acquisition of the UK semiconductor company, Graphcore, by Softbank. Allbirds
ultimately proved to be a disappointing investment as the company struggled to
diversify its offering which led to significant inventory write-offs. We sold
the shares in May. In the case of Graphcore we had historically written down
the valuation on account of lacklustre operational performance, but were
ultimately able to recover the majority of the investment on account of being
senior ranking shareholders. During the final quarter of 2024 we also trimmed
our position in SpaceX for portfolio management reasons, but we retain strong
conviction in the company's upside potential from here. Throughout the period
we also continued to execute on the share buy-back programme which was
announced during the latter part of 2023. During the year to 31 January 2025
the Company bought back a total of 5.2 million shares as part of this
programme.
The combined net result of these transactions is that Schiehallion's overall
deployment level rose during the period, with cash equivalents and cash now
only comprising approximately 6% of the Company at the reporting date.
Consequently, the bar for entry into the portfolio remains high, but we will
continue to capitalise on opportunities which clear this bar from within our
pipeline.
Looking forward
We regard the current outlook for private growth markets as extremely
compelling. At a fundamental level there are three ingredients which make up
any good investment, namely a good product; a good business model underpinned
by excellent management; and a good price. We believe we are seeing all three
in abundance. As far as products are concerned, there is an argument that
never before have so many early-stage companies brought this much innovation
to bear on creating exceptional products - whether this be satellite internet
provision, frictionless cross-border transacting, data-driven medical
diagnostics, or AI-assisted video creation, to name but a few. At the same
time, we believe we are seeing an environment which is very much conducive for
excellent business model creation, with companies having access to sufficient
financial capital as well as a dense pool of human capital in the form of
experienced entrepreneurs and business leaders. Finally, all of this is
available at compelling valuations, thereby presenting The Schiehallion Fund
with the opportunity to continue making investments in not only some of the
most transformational companies of today, but also some of the most
transformational companies of tomorrow.
Peter Singlehurst
Robert Natzler
25 March 2025
For a definition of terms see Glossary of terms and Alternative Performance
Measures at the end of this announcement.
Past performance is not a guide to future performance.
Environmental, social and governance ('ESG') considerations
Baillie Gifford's integrated approach towards the consideration of
Environmental, Social and Governance ('ESG') factors when pursuing investments
in high growth private companies is articulated below:
ESG in our philosophy
The Schiehallion Fund invests in companies with a minimum time horizon of five
years. Using a genuine long-term approach to investment means looking beyond
the narrow scope of traditional financial analysis to consider a range of
factors that may affect the ability of the fund's holdings to thrive over the
long term. In this regard good governance is crucial towards enabling
companies to deliver on their potential. Over our investment horizon, we also
believe that scalability and profitability depend not only on a company's
ability to serve customers well and execute on its business model, but also on
its ability to do this without jeopardising its social licence to operate. As
such, we do not separate consideration of a company's role in the broader
investment ecosystem from our investment work, under ESG or any other rubric.
These considerations are core to long-term investing. It is the long-term
nature of the growth ambition within our investment philosophy that leads us
to pay special attention to the external effects of a company's operations,
both positive and negative. Over periods of five years or longer these can
have a profound impact on a company's relationship with customers, regulators
and staff, ultimately serving as either a significant contributor or detractor
to the growth of a business. Our approach is not about being a moral
conscience for our clients. Instead, it is a vital part of practising the
philosophy that we believe will grow the value of their capital over the long
term.
ESG in our process
The consideration of material ESG factors - those that are likely to affect
the financial condition or operating performance of portfolio companies -
is well-suited to Baillie Gifford's approach to investing in private markets
due to its long-term investment horizon and emphasis on active ownership.
Baillie Gifford's Private Companies Team focuses its research into potential
investments through a proprietary 10-Question research framework. These
questions aim to address issues such as the scale of the opportunity, the
competitive edge and potential returns, while others focus specifically on
ESG-related elements.
For example, Question Four of the framework ("How will the leadership and
cultural attributes help this business achieve its long-term business
vision?") considers the leadership within a firm, the broader stakeholders
within the workplace and whether the firm cultivates an effective
organisational mindset capable of delivering the mission. Question Five then
focuses on external stakeholders ("Do the company's customers like them?").
This question is geared towards broader ecosystem impact and considers, among
other aspects, whether the company is listening and responding well to the
developing needs of a growing and changing customer base. Question Six of the
framework specifically explores any material environmental and social factors
in greater depth ("How do environmental and social factors create
opportunities and risks?").
Beyond the research framework we also consider how we can assist specific
companies, with the focus often being on governance. While we do not take
active board seats, we occasionally take observer seats and frequently provide
encouragement, input and introductions as companies look to evolve a stronger
governance structure that is better suited for public markets.
The Private Companies Team is also supported by a wider network within and
outside of Baillie Gifford. As far as ESG topics are concerned specifically,
we benefit from the research and expertise of Baillie Gifford's broader team
of ESG professionals, academic networks and impact and climate-focused
investment teams.
ESG engagement
The Company has given discretionary voting powers to Baillie Gifford. For
public holdings within the Company, the Investment Manager votes against
resolutions they consider may damage shareholders' rights or economic
interests.
The Company believes that it is in the shareholders' interests to consider ESG
factors when selecting and retaining investments and has asked the Investment
Manager to take these issues into account. The Investment Manager does not
exclude companies from their investment universe purely on the grounds of ESG
factors but adopts a positive engagement approach whereby matters are
discussed with management with the aim of improving the relevant policies and
management systems and enabling the Investment Manager to consider how ESG
factors could impact long-term investment returns. The Investment Manager
considers governance factors across the portfolio as part of the investment
case and addresses environmental and social factors in terms of material risks
and opportunities. The Investment Manager's Statement of Compliance with the
UK Stewardship Code can be found on the Investment Manager's website:
bailliegifford.com. The Investment Manager's policy has been reviewed and
endorsed by the Board. The Investment Manager, Baillie Gifford & Co, are
signatories to the United Nations Principles for Responsible Investment.
By engaging with both the private and public companies within Schiehallion's
portfolio, the Investment Manager seeks to build constructive relationships
with these companies to better inform investment activities and, where
necessary, effect changes within holdings, ultimately with the goal of
achieving better returns for shareholders. As owners of these companies at an
earlier point in their overall growth journey - i.e. while they are still
private - the Investment Manager is able to gain deeper and longer-term
insight due to the length of these relationships. The potential continuation
of these relationships through the Initial Public Offering ('IPO') and into
public markets is a key reason why these companies choose the Company as a
partner.
Engagement topics
Due to the private nature of the majority of companies within Schiehallion, we
are unable to disclose the exact nature of our discussions with specific
management teams. That said, there are common themes that we engage companies
on, and these can be grouped as follows:
Portfolio company board composition
Where the Investment Manager can add value is on board composition and, more
specifically, board transition. Companies within the portfolio are often
transitioning from an investor-led board to an independent board as they grow.
The Investment Manager supports companies to build a board of directors that
is useful in the long term. Owing to Baillie Gifford's decades-long experience
investing in and engaging with public companies, it has a network of potential
board members that can be introduced to relevant companies and can engage our
internal Governance team to advise on good board composition more broadly. At
a practical level Baillie Gifford recently held a Board Forum event for key
individuals representing several of our portfolio companies - including ten
holdings within the portfolio - with the aim of helping their companies
prepare for life in public markets. Participants were able to hear from a
range of stakeholders across Baillie Gifford's global network of founders,
CEOs, board members, investors and academics. Session topics included the role
of board chairpersons, share structures, compensation, and the transition from
investor-led to independent boards, among others. This event built on the CFO
forum held in 2023, and feedback was again overwhelmingly positive.
The IPO process
The Investment Manager often engages with portfolio companies that are
thinking about the IPO process. From a practical perspective Baillie Gifford
is well placed to advise on aspects such as where to list, the range of
reporting that is necessary, and employee stock options, for example. More
generally advice also pertains to what kind of public company these private
companies eventually want to be. Baillie Gifford is a useful conversation
partner in such discussions on account of its long heritage investing in
public markets.
Capital structures
The Investment Manager has continued to discuss capital structures with
investee companies that have been exploring a range of different options in
this regard. Schiehallion's long-term horizon enables the Investment Manager
to offer well-aligned advice with the intention of limiting unintended and
potentially destructive consequences that can arise from complicated capital
structures. When negotiating terms, the Investment Manager seeks
straightforward terms that are well aligned with the long-term interests of
shareholders.
One year summary
The following information illustrates how The Schiehallion Fund Limited
performed over the year ended 31 January 2025.
31 January 31 January
Ordinary shares 2025 2024 % change
Shareholders' funds US$1,369.96m US$1,219.14m
Net asset value* 133.69¢ 118.37¢ 12.9% *
Share price* 108.00¢ 71.50¢ 51.0% *
Discount(†)* (19.2%) (39.6%)
Number of shares in issue 1,024,738,907 1,029,898,907
Market capitalisation US$1,106.72m US$736.38m
Ongoing charges(†)* 0.92% 0.85%
Year ended Year ended
31 January 31 January
2025 2024
Revenue loss per share (0.39¢) (0.12¢)
Period's high and low
Year ended 31 January 2025 For the period 9 September For the period 1 February 2023
2023 to 31 January 2024 to 8 September 2023
Ordinary shares High Low High Low High Low
Net asset value per ordinary share 133.89¢ 112.90¢ 118.66¢ 103.40¢ 117.98¢ 103.94¢
Share price 120.00¢ 57.00¢ 74.00¢ 45.00¢ 92.50¢ 59.00¢
(Discount)/premium(†) (7.28%) (52.40%) (36.29%) (56.48%) (22.53%) (44.93%)
For the period 1 February 2023
to 8 September 2023
C shares¶ High Low
Net asset value per ordinary share 80.78¢ 73.83¢
Share price 49.00¢ 39.50¢
(Discount)/premium(†) (38.43%) (50.38%)
For a definition of terms see Glossary of terms and Alternative Performance
Measures at the end of this announcement.
* Key performance indicator.
† Alternative Performance Measure, see Glossary of terms and Alternative
Performance Measures at the end of this announcement.
¶ The C shares converted on 8 September 2023.
Source: Baillie Gifford/LSEG. See disclaimer at the end of this announcement.
Review of investments
A review of the Company's ten largest investments as at 31 January 2025.
Space Exploration Technologies (SpaceX)
SpaceX designs, manufactures and launches spacecraft while also operating an
internet satellite constellation known as Starlink. Towards the end of 2024
the company reached a publicly disclosed valuation of $350 billion, making it
the largest private company in the word. It has built its business around
simplicity, innovation and affordability leading to a vertically integrated,
lean and nimble organisation that can iterate and manufacture quickly.
It continues to pursue an enormous market opportunity, coupled with large and
growing revenues underpinned by compelling profitability dynamics.
Geography United States
Valuation at 31 January 2025 US$128,811,000
% of net assets 9.4%
Valuation at 31 January 2024 US$88,324,000
% of net assets 7.2%
Net purchases/(sales) in the year (US$5,451,000)
Bending Spoons
Bending Spoons is a developer and acquirer of digital consumer applications.
The company leverages its shared set of tools to use across different
applications, with the shared goal of maximising long-term value creation
while simultaneously minimising customer acquisition cost and improving the
product for consumers. Scaling its current suite of applications and
strategically acquiring new ones will be the key enabler of its continued
success.
Geography Italy
Valuation at 31 January 2025 US$111,244,000
% of net assets 8.1%
Valuation at 31 January 2024 US$48,922,000
% of net assets 4.0%
Net purchases/(sales) in the year US$9,921,000
ByteDance
ByteDance is well known for its video-sharing social networking platforms
TikTok and Douyin, as well as the news aggregator application, Toutiao.
The company uses machine learning to deliver relevant and individualised
content. Further innovations include enabling advertisers to target customers
with precision. TikTok is one of the few Chinese companies to grow a
successful overseas operation. Performance remains strong, with earnings
growth exceeding that of peers and active user numbers approaching those of US
public market peer, Meta. Some regulatory challenges remain outside of China.
Geography China
Valuation at 31 January 2025 US$85,177,000
% of net assets 6.2%
Valuation at 31 January 2024 US$63,835,000
% of net assets 5.2%
Net purchases/(sales) in the year nil
Wise(P)
Wise, the international money transfer business, enables customer and business
payments while eliminating intermediaries and limiting transaction costs. Wise
listed in July 2021 at a market capitalisation of c.US$11 billion after
successive years of successful execution. The company continues to expand its
global footprint and currently boasts six direct connections to domestic
payment systems, coupled with 65+ licenses and 90+ banking partnerships
globally.
Geography United Kingdom
Valuation at 31 January 2025 US$83,229,000
% of net assets 6.1%
Valuation at 31 January 2024 US$61,991,000
% of net assets 5.1%
Net purchases/(sales) in the year nil
Affirm(P)
Affirm is a digital financial services company that offers simple consumer
loans to buy an array of consumer goods. The company experienced impressive
growth up to its IPO in 2021 and has continued this as a public company. It
continues to expand its user base and merchant partners, most recently through
a partnership with Apple Pay launched in the latter half of 2024, as well as
through an expansion into the United Kingdom.
Geography United States
Valuation at 31 January 2025 US$79,224,000
% of net assets 5.9%
Valuation at 31 January 2024 US$52,578,000
% of net assets 4.3%
Net purchases/(sales) in the year nil
Tempus AI(P)
Healthcare technology company Tempus AI, boasts the world's largest library of
clinical and molecular data. This is a key underpinning to the company's
efforts to advance precision medicine by integrating artificial intelligence
into healthcare, enabling data-driven decisions for personalised care. The
company listed on the Nasdaq in June 2024 and has been one of the top
contributors within the portfolio since inception.
Geography United States
Valuation at 31 January 2025 US$46,435,000
% of net assets 3.4%
Valuation at 31 January 2024 US$26,402,000
% of net assets 2.2%
Net purchases/(sales) in the year nil
Stripe
Stripe, the global payments processing company, continues to focus on making
its services more accessible and beneficial for customers. Recent areas of
progress include the expansion of support for more payment providers, upgrades
to the Stripe Billing offering, as well as a new partnership with chip giant
NVIDIA. The increased interoperability, coupled with the upgrades to Stripe
Billing, are further examples of how the company continues to evolve and
improve its overall offering.
Geography United States
Valuation at 31 January 2025 US$39,796,000
% of net assets 2.9%
Valuation at 31 January 2024 US$27,468,000
% of net assets 2.3%
Net purchases/(sales) in the year nil
Databricks
Databricks is a data infrastructure, management and AI SaaS company with a
mission to democratise AI for enterprises. Its machine learning-as-a-service
platform enables any company to use this set of technologies. Usage also
extends beyond business intelligence based on historical data, but also to
predictions and automated real-time decision-making. As such the platform has
the potential to have a positive impact on every line of a user company's
profit and loss statement.
Geography United States
Valuation at 31 January 2025 US$39,029,000
% of net assets 2.8%
Valuation at 31 January 2024 US$29,873,000
% of net assets 2.5%
Net purchases/(sales) in the year US$4,350,000
Wayve Technologies
Wayve is developing software for autonomous vehicles, using end‑to-end deep
learning. Using an entirely machine-learnt approach and training their system
in central London, Wayve promises to safely meet the edge cases (i.e. uncommon
scenarios that automated systems need to be prepared for) that have previously
hampered the self-driving industry. The company also recently expanded its
operations into the United States, marking the first on‑road trials outside
the United Kingdom. Wayve's strong team, partnerships and track record put it
in a unique position to lead the commercialisation of safe autonomous driving.
Geography United Kingdom
Valuation at 31 January 2025 US$36,275,000
% of net assets 2.6%
Valuation at 31 January 2024 US$34,001,000
% of net assets 2.8%
Net purchases/(sales) in the year nil
Warby Parker(P)
Corrective eyewear retailer, Warby Parker, remains focused on increasing
revenue per customer and driving footfall into its stores through its eye test
offering. The company went public in September 2021, and after a difficult
initial journey in public markets during the market correction experienced in
2022, it saw a strong share price recovery during the most recent
twelve-month reporting period (+117%).
Geography United States
Valuation at 31 January 2025 US$35,653,000
% of net assets 2.6%
Valuation at 31 January 2024 US$16,398,000
% of net assets 1.3%
Net purchases/(sales) in the year nil
(P) Denotes listed investment previously held in the portfolio as a
private company investment.
Baillie Gifford's approach to valuing private companies
We hold our private company investments at 'fair value', i.e. the price that
would be paid in an open‑market transaction. Valuations are adjusted both
during regular valuation cycles and on an ad hoc basis in response to 'trigger
events'. Our valuation process ensures that private companies are valued
in both a fair and timely manner.
The valuation process is overseen by a valuations group at Baillie Gifford,
which takes advice from an independent third party (S&P Global). The
valuations group is independent from the investment team with all voting
members being from different operational areas of the firm, and the portfolio
managers only receive final valuation notifications once they have been
applied.
We revalue the private holdings on a three-month rolling cycle, with one-third
of the holdings reassessed each month. During stable market conditions, and
assuming all else is equal, each investment would be valued four times in a
twelve‑month period. For Schiehallion and our investment trusts, the prices
are also reviewed twice per year by the respective boards and are subject to
the scrutiny of external auditors in the annual audit process.
Beyond the regular cycle, the valuations team also monitors the portfolio for
certain 'trigger events'. These may include changes in fundamentals, a
takeover approach, an intention to carry out an Initial Public Offering
('IPO'), company news which is identified by the valuation team or by the
portfolio managers, or meaningful changes to the valuation of comparable
public companies. Any ad hoc change to the fair valuation of any holding is
implemented swiftly and reflected in the next published net asset value
('NAV'). There is no delay.
The valuations team also monitors relevant market benchmarks on a weekly basis
and updates valuations in a manner consistent with our external valuer's
(S&P Global) most recent valuation report where appropriate.
Renewed investor sentiment and improved market conditions have led to an
increase in deal activity during 2024. Whilst global markets have tended to be
more stable, isolated pockets of heightened volatility remain. The data below
quantifies the revaluations carried out during the twelve months to 31 January
2025, however it does not reflect the ongoing monitoring of the private
investment portfolio which has not resulted in a change in valuation.
The Schiehallion Fund Limited*
Instruments valued 357
Instruments held 76
Percentage of portfolio revalued up to 4 times 46.1%
Percentage of portfolio revalued 5 or more times 53.9%
* Data reflecting year to 31 January 2025.
List of investments
As at 31 January 2025
Name Business Country 2025 2025 2024 2024
Total value % of net Total % of net
US$'000 assets value assets
US$'000
Space Exploration Technologies Designs, manufactures and launches advanced rockets and spacecraft United States 128,811 9.4 88,324 7.2
Bending Spoons Mobile application software developer Italy 111,244 8.1 48,922 4.0
ByteDance Social media and news aggregation company China 85,177 6.2 63,835 5.2
Wise(P) Online platform to send and receive money United Kingdom 83,229 6.1 61,991 5.1
Affirm(P) Fintech providing lending and consumer credit services United States 79,224 5.9 52,578 4.3
Tempus AI(P) Oncological records aggregator and diagnostic testing provider United States 46,435 3.4 26,402 2.2
Stripe Online payment platform United States 39,796 2.9 27,468 2.3
Databricks Data software solutions United States 39,029 2.8 29,873 2.5
Wayve Technologies AI based software for self-driving cars United Kingdom 36,275 2.6 34,001 2.8
Warby Parker(P) Online and physical corrective eyewear retailer United States 35,653 2.6 16,398 1.3
Dailyhunt (VerSe Innovation) Telephone voice, data, text messaging, and roaming services India 34,314 2.5 41,006 3.3
Solugen Combines enzymes and metal catalysts to make chemicals United States 30,301 2.2 32,293 2.6
Brex Corporate credit cards for startups United States 28,014 2.1 40,212 3.3
Faire Wholesale Online wholesale marketplace United States 27,997 2.0 28,509 2.4
Epic Games Video game developer United States 27,018 2.0 17,565 1.4
Grammarly Online platform for checking grammar, spelling and improving written United States 25,435 1.9 23,976 2.0
communication
Chime Financial Digital current account provider United States 24,987 1.9 26,697 2.2
Flix European mobility provider Germany 24,114 1.8 32,996 2.7
PsiQuantum Silicon photonic quantum computing United States 23,536 1.7 13,996 1.1
Vinted Online marketplace Lithuania 23,430 1.7 - -
Rappi Provider of an on-demand delivery platform designed to connect consumers with United States 23,190 1.7 21,825 1.8
local stores
Oddity(P) Direct to consumer cosmetics United States 22,180 1.6 19,181 1.6
Genki Forest Technology Group Non-alcoholic beverages China 21,973 1.6 22,628 1.9
Tekever Unmanned systems technology and services manufacturer Portugal 20,790 1.5 - -
Kepler Computing Semiconductor company United States 20,221 1.5 23,137 1.9
Bolttech Global insurance platform services Singapore 20,000 1.5 - -
Zetwerk Manufacturing Fabricated metal products India 19,488 1.4 - -
HeartFlow Develops software for cardiovascular disease diagnosis and treatment United States 15,925 1.2 10,939 0.9
Tanium Online security management United States 15,698 1.2 17,974 1.5
Nuro Developer of autonomous delivery vehicles United States 14,870 1.1 13,044 1.1
Workrise Technologies Jobs marketplace for the energy sector United States 14,467 1.1 13,392 1.1
Oscar Health(P) Healthcare insurance provider United States 13,630 1.0 10,292 0.8
Merlin Labs Autonomous flight technology United States 13,483 1.0 10,632 0.9
Pet Circle (Millell) Pet food and accessories Australia 12,945 1.0 22,975 1.9
Cohesity Global Data storage United States 11,302 0.8 11,526 0.9
Airbnb(P) Online market place for travel accommodation United States 10,085 0.7 11,082 0.9
Tenstorrent Processor architecture and software solutions United States 10,000 0.7 - -
Runway AI Artificial Intelligence based applications developer United States 10,000 0.7 - -
Loft Online property platform Brazil 9,763 0.6 11,556 0.9
Bottle Planet Producer of alcoholic beverages China 8,756 0.6 8,012 0.7
Away (JRSK) Travel and lifestyle brand United States 8,411 0.6 10,590 0.9
Honor Technology Provider of home-care services United States 7,877 0.5 5,379 0.4
Carbon Manufactures and develops 3D printers United States 6,701 0.5 9,062 0.7
McMakler Real estate services Germany 2,079 0.2 37,242 3.1
MasterClass (Yanka Industries) Online education subscription platform United States 1,151 0.1 2,732 0.2
Northvolt Lithium ion battery manufacturer Sweden 600 <0.1 31,772 2.6
Illumina CVR Gene sequencing equipment and consumables United States 407 <0.1 407 <0.1
Blockstream Financial software developer Canada 339 <0.1 1,947 0.2
Indigo Agriculture Microbial seed treatments to increase crop yields and grain marketplace United States 100 <0.1 801 0.1
Total investments 1,290,450 94.2
(P) Denotes listed investment previously held in the portfolio as a
private company investment.
Name 2025 2025 2024 2024
Total value % of net Total value % of net
US$'000 assets US$'000 assets
US Treasury Bill 15/05/2025 12,963 1.0 - -
US Treasury Bill 20/03/2025 12,962 1.0 - -
US Treasury Bill 30/10/2025 12,884 0.9 - -
US Treasury Bill 07/08/2025 12,869 0.9 - -
US Treasury Bill 02/10/2025 12,832 0.9 - -
US Treasury Bill 22/01/2026 12,824 0.9 - -
US Treasury Bill 18/04/2024 - - 27,949 2.3
US Treasury Bill 22/02/2024 - - 27,948 2.3
US Treasury Bill 13/06/2024 - - 27,935 2.3
US Treasury Bill 29/11/2024 - - 27,922 2.3
US Treasury Bill 05/09/2024 - - 27,909 2.3
US Treasury Bill 31/10/2024 - - 27,859 2.2
Total US Treasury Bills 77,334 5.6 167,522 13.7
Cash 6,118 0.5 11,306 0.9
Other current assets and liabilities (3,628) (0.3) (2,638) (0.2)
Capital gains tax provision (317) 0.0 (834) 0.0
Net current assets less capital gains tax provision 79,507 5.8 175,356 14.4
Total net assets less capital gains tax provision 1,369,957 100.0 1,219,137 100.0
Listed Private Net current Net
investments company assets assets
% investments % %
%
31 January 2025 21.3 72.9 5.8 100.0
31 January 2024 14.3 71.3 14.4 100.0
Allocation of net assets
Name 2025 2025 2024 2024
Total value % of net Total value % of net
US$'000 assets US$'000 assets
Listed investments 290,843 21.3 174,072 14.3
Private company investments 999,607 72.9 869,709 71.3
US Treasury Bills 77,334 5.6 167,522 13.7
Cash and cash equivalents 6,118 0.5 11,306 0.9
Net current assets less capital gains tax provision (3,945) (0.3) (3,472) (0.2)
Total net assets 1,369,957 100.0 1,219,137 100.0
Company metrics Capital Number Number of Gross Gross
deployed * of private IPOs/listings Internal Multiple on
company Rate of Invested
acquisitions Return Capital
(IRR) * (MOIC) *
Since launch US$1,244m 55 9 4.2% 1.1
* Alternative Performance Measure, see Glossary of terms and Alternative
Performance Measures at the end of this announcement.
Distribution of net assets
Geographical
Geographical % at % at Number of
31 January 31 January investments
2025 2024 at 31 January
2025
United States 56.8 50.7 32
United Kingdom 8.7 8.4 2
China 8.4 7.7 3
Italy 8.1 4.0 1
India 3.9 3.4 2
Germany 2.0 5.8 2
Lithuania 1.7 - 1
Singapore 1.5 - 1
Portugal 1.5 - 1
Australia 1.0 1.8 1
Brazil 0.6 0.9 1
Canada <0.1 0.2 1
Sweden <0.1 2.7 1
Net current assets 5.8 14.4
Sectoral
Sectoral % at % at Number of
31 January 31 January investments
2025 2024 at 31 January
2025
Information technology 30.6 21.3 16
Financials 17.0 18.0 5
Industrials 15.9 13.0 6
Communication services 8.8 8.8 3
Consumer discretionary 8.6 10.1 7
Healthcare 5.1 3.6 4
Consumer staples 3.8 4.2 4
Materials 3.6 2.6 2
Real estate 0.8 4.0 2
Net current assets 5.8 14.4
Statement of comprehensive income
For the year ended 31 January
Notes 2025 2025 2025 2024 2024 2024
Revenue Capital Total Revenue Capital Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Gains on investments 7 - 158,543 158,543 - 69,768 69,768
Currency gains - 15 15 - 75 75
Income 2 7,509 - 7,509 8,211 - 8,211
Investment management fee 3 (9,562) - (9,562) (8,152) - (8,152)
Other administrative expenses 4 (1,956) - (1,956) (1,263) - (1,263)
Operating profit/(loss) before taxation (4,009) 158,558 154,549 (1,204) 69,843 68,639
Tax on ordinary activities - 517 517 - (834) (834)
Profit/(loss) and total comprehensive income/(loss) for the year attributable (4,009) 159,075 155,066 (1,204) 69,009 67,805
to ordinary shareholders
Earnings/(loss) per 5 (0.39¢) 15.49¢ 15.10¢ (0.12¢) 6.69¢ 6.57¢
ordinary share
The total column of this statement represents the Statement of Comprehensive
Income of the Company. The supplementary revenue and capital columns are
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing
operations.
The accompanying notes below are an integral part of the Financial Statements.
Statement of financial position
As at 31 January
Notes 2025 2025 2024 2024
US$'000 US$'000 US$'000 US$'000
Non-current assets
Investments held at fair value through profit or loss 7 1,290,450 1,043,781
Current assets
US Treasury Bills 77,334 167,522
Cash and cash equivalents 6,118 11,306
Debtors 1,427 1,743
84,879 180,571
Current liabilities
Amounts falling due within one year (5,055) (4,381)
Net current assets 79,824 176,190
Non-current liabilities
Amounts falling due after more than one year:
Provision for tax liability (317) (834)
Net assets 1,369,957 1,219,137
Capital and reserves
Share capital 8 1,209,208 1,213,903
Capital reserve 170,450 15,621
Capital redemption reserve 7,296 2,601
Revenue reserve (16,997) (12,988)
Ordinary shareholders' funds 1,369,957 1,219,137
Net asset value per ordinary share 133.69¢ 118.37¢
Number of ordinary shares in issue 8 1,024,738,907 1,029,898,907
The Financial Statements of The Schiehallion Fund Limited (Company
registration number 65915) were approved and authorised for issue by the Board
of Directors and were signed on 25 March 2025.
Dr Linda Yueh CBE
Chairperson
The accompanying notes below are an integral part of the Financial Statements.
Statement of changes in equity
For the year ended 31 January 2025
Notes Share Capital Capital Revenue Shareholders'
capital reserve redemption reserve funds
US$'000 US$'000 reserve US$'000 US$'000
US$'000
Shareholders' funds at 1 February 2024 1,213,903 15,621 2,601 (12,988) 1,219,137
Ordinary shares bought back 8 (4,695) (4,246) 4,695 - (4,246)
Total comprehensive income/(loss) - 159,075 - (4,009) 155,066
Shareholders' funds at 31 January 2025 1,209,208 170,450 7,296 (16,997) 1,369,957
For the year ended 31 January 2024
Notes Share Capital Capital Revenue Shareholders'
capital reserve redemption reserve funds
US$'000 US$'000 reserve US$'000 US$'000
US$'000
Shareholders' funds at 1 February 2023 1,216,503 (51,536) - (11,784) 1,153,183
Ordinary shares bought back 8 (2,600) (1,852) 2,601 - (1,851)
Total comprehensive income/(loss) - 69,009 - (1,204) 67,805
Shareholders' funds at 31 January 2024 1,213,903 15,621 2,601 (12,988) 1,219,137
The accompanying notes below are an integral part of the Financial Statements.
Statement of cash flows
For the year ended 31 January
Notes 2025 2025 2024 2024
US$'000 US$'000 US$'000 US$'000
Cash flows from operating activities
Operating profit before taxation 154,549 68,639
US Treasury Bills interest 2 (6,705) (5,305)
Net gains on investments (158,543) (69,768)
Currency gains (15) (75)
Changes in debtors and creditors 910 1,194
Net cash used in operating activities* (9,804) (5,315)
Cash flows from investing activities
Acquisitions of US Treasury Bills (151,064) (201,508)
Disposals of US Treasury Bills 247,928 176,088
Acquisitions of investments 7 (121,914) (75,589)
Disposals of investments 7 33,788 73,608
Net cash used in investing activities 8,738 (27,401)
Cash flows from financing activities
Ordinary shares bought back 8 (4,137) (1,852)
Net cash outflow from financing activities (4,137) (1,852)
Net decrease in cash and cash equivalents (5,203) (34,568)
Effect of exchange rate fluctuations on cash and cash equivalents 15 75
Cash and cash equivalents at 1 February 11,306 45,799
Cash and cash equivalents at 31 January 6,118 11,306
* Cash from operations includes interest received of US$412,000 (2024 -
US$2,044,000).
2025 2024
US$'000 US$'000
Cash and cash equivalents comprise the following:
Cash at bank 6,118 11,306
The accompanying notes below are an integral part of the Financial Statements.
Notes to the Financial Statements
1. Principal accounting policies
The Financial Statements for the year ended 31 January 2025 have been prepared
in accordance with International Financial Reporting Standards ('IFRS') as
issued by the International Accounting Standards Board ('IASB').
2. Income
2025 2024
US$'000 US$'000
US Treasury Bill interest 6,705 5,305
Overseas interest 392 862
Deposit interest 412 2,044
Total income 7,509 8,211
3. Investment management fee
2025 2024
US$'000 US$'000
Investment Management fee 9,562 8,152
Details of the Investment Management Agreement are set out on page 54 of the
Annual Report and Financial Statements. Under the terms of the Investment
Management Agreement and with effect from the date the Company's ordinary
shares were admitted to trading on the Specialist Fund Segment of the Main
Market of the London Stock Exchange, the Investment Manager is entitled to an
annual fee (exclusive of VAT, which shall be added where applicable) of: 0.9%
on the net asset value excluding cash or cash equivalent assets up to and
including US$650 million; 0.8% on the net asset value excluding cash or cash
equivalent assets exceeding US$650 million up to and including US$1.3 billion;
and 0.7% on the net asset value excluding cash or cash equivalent assets
exceeding US$1.3 billion. Management fees are calculated and payable
quarterly. For the purpose of calculating the management fee, cash equivalents
include US Treasury Bills.
4. Other administrative expenses
2025 2024
US$'000 US$'000
General administrative expenses 944 275
Administrator's fee 112 105
Auditor's remuneration for audit and non-audit services 260 296
Directors' fees 395 450
Depositary and custody fees 144 108
Registrar fees 39 29
Marketing* 62 -
1,956 1,263
* The Company is part of a marketing programme which includes all the
investment trusts managed by the Investment Manager. The marketing strategy
has an ongoing objective to stimulate demand for the Company's shares. The
cost of this marketing strategy is borne in partnership by the Company and the
Investment Manager. The Investment Manager matches the Company's marketing
contribution and provide the resource to manage and run the programme.
In the year to 31 January 2025 there was nil (31 January 2024 - US$21,000)
paid to the Auditor, KPMG Channel Islands Limited, in respect of non-audit
services (included within 'General administrative expenses' above). The
non-audit fees incurred in the year to 31 January 2024 of US$21,000 were
related to the engagement of KPMG Channel Islands Limited to verify that the C
share conversion ratio was calculated correctly and in accordance with the
prospectus.
5. Earnings per share
Year ended Year ended
31 January 2025
31 January 2024
Ordinary shares US$'000 ¢ US$'000 ¢
Revenue return on ordinary activities after taxation (4,009) (0.39) (1,204) (0.12)
Capital return on ordinary activities after taxation 159,075 15.49 69,009 6.69
Profit and total comprehensive income for the year 155,066 15.10 67,805 6.57
Weighted average number of ordinary shares in issue 1,027,245,710 1,032,208,365
6. Ordinary dividends
There were no dividends paid or proposed in respect of the year to 31 January
2025 (2024 - nil).
7. Financial instruments
Fair value hierarchy
The fair value hierarchy used to analyse the fair values of financial assets
is described below. The levels are determined by the lowest (that is the least
reliable or least independently observable) level of input that is significant
to the fair value measurement for the individual investment in its entirety
as follows:
Level 1 - using unadjusted quoted prices for identical instruments in an
active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is
unavailable).
The valuation techniques used by the Company are explained in the accounting
policies on pages 85 and 86 of the Annual Report and Financial Statements.
Transfers between levels of the fair value hierarchy take place when the
criteria for recognition in another level are met, such as the listing of
an investment.
As at 31 January 2025 Level 1 Level 2 Level 3 Total
US$'000 US$'000 US$'000 US$'000
Listed equities 290,843 - - 290,843
Private company ordinary shares/warrants - - 280,083 280,083
Private company preference shares* - - 712,041 712,041
Private company convertible promissory notes - - 7,483 7,483
Total financial asset investments 290,843 - 999,607 1,290,450
As at 31 January 2024 Level 1 Level 2 Level 3 Total
US$'000 US$'000 US$'000 US$'000
Listed equities 174,072 - - 174,072
Private company ordinary shares/warrants - - 172,693 172,693
Private company preference shares* - - 684,298 684,298
Private company convertible promissory notes - - 12,718 12,718
Total financial asset investments 174,072 - 869,709 1,043,781
* The investments in preference shares are not classified as equity
holdings as they include liquidation preference rights that determine the
repayment (or multiple thereof) of the original investment in the event of a
liquidation event such as a take-over.
During the year ended 31 January 2025, the investment in Tempus AI with a book
cost of $18,468,000 and a fair value (IPO price) of US$32,858,000 was
transferred from Level 3 to Level 1 on becoming listed. During the prior year
the investment in Oddity with a fair value (IPO price) of US$11,800,000 was
transferred from Level 3 to Level 1 on becoming listed.
Investments in securities are financial assets held at fair value through
profit or loss. In accordance with IFRS 13, the table above provides an
analysis of these investments based on the fair value hierarchy described
above, which reflects the reliability and significance of the information used
to measure their fair value.
Listed Private Total
securities company US$000
US$000 securities
US$000
Cost of investments at 1 February 2024 143,614 903,733 1,047,347
Investment holding gains and losses at 1 February 2024 30,458 (34,024) (3,566)
Fair value of investments at 1 February 2024 174,072 869,709 1,043,781
Movements in the period:
Purchases at cost(†) - 121,914 121,914
Sales - proceeds(†) (1,405) (32,383) (33,788)
- loss on disposal (26,583) (39,224) (65,807)
Changes in categorisation 18,468 (18,468) -
Changes in investment holding gains and losses 126,291 98,059 224,350
Fair value of investments at 31 January 2025 290,843 999,607 1,290,450
Cost of investments at 31 January 2025 134,094 935,572 1,069,666
Investment holding gains and losses at 31 January 2025 156,749 64,035 220,784
Fair value of investments at 31 January 2025* 290,843 999,607 1,290,450
* Includes holdings in preference shares, promissory notes, ordinary
shares and warrants.
† The purchases and sales figures above include transaction costs of nil
(2024 - nil).
8. Share capital
2025 2025 2024 2024
Number US$'000 Number US$'000
Allotted, called up and fully paid ordinary shares of US$1 each 1,024,738,907 1,208,743 1,029,898,907 1,213,903
Treasury shares of US$1 each 465,000 465 - -
1,025,209,907 1,209,208 1,029,898,907 1,213,903
By way of a special resolution dated 15 March 2019 the
Directors had a general authority to allot up to 720,000,000 ordinary shares
or C shares, such figure to include the ordinary shares issued at the initial
placing. 477,250,000 ordinary shares were issued at the Company's initial
placing, with a further 23,180,002 ordinary shares subsequently issued. The
remaining authority expired on 15 March 2024.
By way of a special resolution dated 18 March 2021 the
Directors have a general authority to allot up to 700,000,000 C shares. On 26
April 2021, the Company issued 700,000,000 C shares of US$1 each and raised
gross proceeds of US$700,000,000. The issue costs in respect of the C share
issue were US$5,198,000. These costs consisted of mainly broker commission
(US$4,066,000), legal fees (US$601,000) and listing fees (US$396,000). The C
shares converted on 8 September 2023 with 532,069,905 new ordinary shares
being admitted to trading on 12 September 2023. The conversion was triggered
by the C share capital deployment crossing the 85% threshold outlined in the
prospectus. The C shares were converted proportionately based on respective
NAV at the calculation date 31 August 2023, the nearest practicable date
selected by the Board. As a result the conversion ratio was calculated to be
0.7601 ordinary shares per C share in issue on 8 September 2023.
By way of a special resolution passed on 10 May 2024 the
Directors of the Company were granted a general authority to issue or sell
from treasury, ordinary or C shares, without regard to pre-emption rights up
to 102,882,390 shares. This authority will expire immediately prior to the
2029 Annual General Meeting (or, if earlier, five years from the date of the
passing of the resolution). During the year to 31 January 2025 no shares were
issued (2024 - nil). In the period from 31 January 2025 to 21 March 2025 no
shares were issued.
By way of a special resolution passed on 10 May 2024 the Directors of the
Company have general authority to make market purchases of up to 154,145,753
ordinary shares, being 14.99% of the ordinary shares in issue as at 10 May
2024, being the date the resolution passed. This will expire at the conclusion
of the Annual General Meeting to be held on 22 May 2025. 5,160,000 ordinary
shares were bought back during the year ended 31 January 2025 at a cost of
US$4,246,000 (31 January 2024 - 2,601,000 ordinary shares at a cost of
US$1,851,000) hence the remaining authority is 150,560,753 ordinary shares. At
31 January 2025 the Company held 465,000 shares in treasury (2024 - nil). In
the period from 31 January 2025 to 21 March 2025 2,750,000 ordinary shares
were bought back to treasury. The total cost of shares bought back is charged
to the capital reserve. The nominal value of the shares that were bought back
and cancelled were transferred from the share capital to the capital
redemption reserve.
Holders of ordinary shares have the right to receive income and capital from
assets attributable to such share class. Ordinary shareholders have the right
to receive notice of general meetings of the Company and have the right to
attend and vote at all general meetings.
9. The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 January 2025 but is derived
from those accounts.
10. The Annual Report and Financial Statements will be available on
the Company website schiehallionfund.com‡ on or around 9 April 2025.
‡ Neither the contents of the Company website nor the contents
of any website accessible from hyperlinks on the Company website (or any other
website) is incorporated into, or forms part of, this announcement.
Glossary of terms and Alternative Performance Measures ('APM')
An alternative performance measure is a financial measure of historical or
future financial performance, financial position, or cash flows, other than a
financial measure defined or specified in the applicable financial reporting
framework.
Total net assets
Total value of all assets held less current liabilities, other than
liabilities in the form of borrowings.
Net asset value
Also described as shareholders' funds, net asset value ('NAV') is the value of
total assets less liabilities (including borrowings). The NAV per share is
calculated by dividing this amount by the number of ordinary shares or C
shares, as applicable, in issue.
Net current assets
Net current assets comprise current assets less current liabilities excluding
borrowings.
Premium/(discount) (APM)
As stock markets and share prices vary, the Company's share price is rarely
the same as its NAV. When the share price is lower than the NAV per share it
is said to be trading at a discount. The size of the discount is calculated by
subtracting NAV per share from the share price and is usually expressed as a
percentage of the NAV per share. If the share price is higher than the NAV per
share, this situation is called a premium.
Ordinary shares 2025 2024
Closing NAV per share (a) 133.69¢ 118.37¢
Closing share price (b) 108.00¢ 71.50¢
(Discount)/premium ((b - a) ÷ (a) expressed as a percentage) (19.2%) (39.6%)
Total Return
The total return is the return to shareholders after reinvesting the net
dividend on the date that the share price goes ex-dividend. The Company does
not pay a dividend, therefore, the one year total returns for the share price
and NAV per share at book and fair value are the same as the percentage
movements in the share price and NAV per share at book and fair value as
detailed above.
Capital deployed (APM)
Capital deployed reflects cumulative amounts invested since inception of the
Company.
Internal rate of return (IRR) (APM)
The IRR indicates the annualised rate of return for the Company's investment
portfolio.
Gross multiple on invested capital (MOIC) (APM)
The MOIC expresses, as a multiple, how much return the Company has made on
investment realisations and income, relative to its book cost.
Ongoing charges (APM)
The total recurring expenses (excluding the Company's costs of dealing in
investments and borrowing costs) incurred by the Company as a percentage of
the average net asset value.
Ordinary shares 2025 2024
US$'000 US$'000
Investment management fee 9,562 8,211
Other administrative expenses 1,956 1,263
Total expenses (a) 11,518 9,474
Average net asset value (b) 1,248,889 1,108,288
Ongoing Charges ((a) ÷ (b) expressed as a percentage) 0.92% 0.85%
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers Regulations,
leverage is any method which increases the Company's exposure, including the
borrowing of cash and the use of derivatives. It is expressed as a ratio
between the Company's exposure and its net asset value and can be calculated
on a gross and a commitment method. Under the gross method, exposure
represents the sum of the Company's positions after the deduction of US dollar
cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of sterling cash balances and after certain hedging and netting
positions are offset against each other.
Average revenue growth rate (APM)
Calculated by taking an average of each investee company's last twelve months
revenue growth (as a percentage).
Average movement in company valuation/share price (APM)
Calculated by taking an average of all valuation movements (as a percentage)
by portfolio company and by line of portfolio company share class.
Contribution (APM)
Contribution to absolute performance (in US$ terms) is used to illustrate how
an individual stock has contributed to the overall return. It is calculated by
taking the average portfolio company weight for the period multiplied by the
absolute return. This is calculated on a daily basis and compounded to provide
the overall contribution of a portfolio company to the performance of the full
portfolio. The absolute return of a portfolio company is determined by
calculating the share price movements in that holding whilst taking into
account any purchase or sale transactions that have occurred in the period.
The absolute return is in US$ terms and therefore takes into account the
foreign exchange movement between the portfolio company's local currency and
US dollar.
Sustainable Finance Disclosure Regulation ('SFDR')
The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a
direct impact in the UK due to Brexit, however, it applies to third-country
products marketed in the EU. As Schiehallion is marketed in the EU by the
AIFM, Baillie Gifford & Co Limited, via the National Private Placement
Regime ('NPPR') the following disclosures have been provided to comply with
the high-level requirements of SFDR.
The AIFM has adopted Baillie Gifford & Co's Stewardship Principles and
Guidelines as its policy on integration of sustainability risks in investment
decisions.
More detail on the Investment Manager's approach to sustainability can be
found in the Stewardship Principles and Guidelines document, available
publicly on the Baillie Gifford website bailliegifford.com‡.
The Schiehallion Fund Limited is managed by Baillie Gifford, the Edinburgh
based fund management group with around £206 billion under management and
advice in active equity and bond portfolios for clients in the UK and
throughout the world (as at 21 March 2025). The Administrator, Secretary and
Designated Manager is Alter Domus (Guernsey) Limited.
‡ Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers' website
(or any other website) is incorporated into, or forms part of, this
announcement.
None of the views expressed in this document should be construed as advice to
buy or sell a particular investment.
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