REG - Scot.Mort Inv Tst - Circular re proposed change to investment policy

Scottish Mortgage Investment TrustAnnouncement

16/03/2026 07:00

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RNS Number : 6743W  Scottish Mortgage Inv Tst PLC  16 March 2026

Scottish Mortgage Investment Trust PLC

(the "Company" or "SMT")

Legal Entity Identifier: 213800G37DCS3Q9IJM38

Proposed amendment to Investment Policy and Notice of General Meeting

 

The Company announces that it has today published a circular to shareholders
(the "Circular"), setting out a proposal to amend the Company's existing
investment policy (the "Proposal") and convening a general meeting (the
"General Meeting") of the Company, to grant the Board limited additional
authority to permit up to £250 million of further investments (approximately
1.7% of total assets)(( 1  (#_ftn1) )) in companies not listed on a public
market ("Private Companies"). Pursuant to the Proposal:

·      the existing 30% limit on investments in Private Companies,
measured at the time of purchase, would continue to apply to the Manager;

·      notwithstanding this limit, the Board would be granted limited
additional capacity to permit the Manager to make up to £250 million of
additional investment in Private Companies when the Private Companies exposure
exceeds (or would exceed) the existing 30% limit; and

·      the use of such additional capacity would be subject to tight
parameters, governance oversight and annual shareholder renewal.

 

Background to and reasons for the Proposal

The Company's investment policy currently provides that the maximum amount
which may be invested by the Manager in Private Companies shall not exceed 30%
of the Company's total assets, measured at the time of purchase (the "30%
Limit").

In practice, the Company's level of exposure to Private Companies is driven by
various factors, including share buybacks as well as quoted valuations of
public investments and revaluations of private companies, which are not within
the Company's control.  The Board recognises that this can result in the
Private Companies exposure approaching, or increasing above, the 30% Limit
without any additional investment activity.

For example, the Company bought back shares for a value of approximately £3
billion across 2024 and 2025. This buyback activity had a positive impact on
the Company by limiting discount volatility, creating meaningful accretion to
net asset value, maintaining a stable shareholder register and narrowing the
discount. However, such buybacks have been predominately funded by selling
public company securities and therefore increased the portfolio weighting to
Private Companies.

Additionally, there have been several upwards revaluations of private
investments in recent months. Most notably, as announced on 16 December 2025,
the valuation of the Company's largest investment, SpaceX, was adjusted
upwards significantly. As a result, SpaceX represented a materially larger
proportion of the Company's total assets as at 31 December 2025 (approximately
15.1%) compared with 30 November 2025 (approximately 8.2%).

While these developments have been beneficial to shareholders, together with
other market movements they have resulted in the aggregate amount invested in
Private Companies exceeding the 30% Limit. As a result, the Company's ability
to make further investments in Private Companies, including follow‑on
investments, is currently constrained.

Following consultation with a broad range of shareholders, the Board considers
that there may be circumstances in which it is in shareholders' best interests
for the Board to be able to approve, to a limited degree and subject to
appropriate corporate governance oversight, additional investments in Private
Companies notwithstanding the fact that the exposure to Private Companies
exceeds the 30% Limit.

Summary of the Proposal

The Board is therefore seeking shareholder approval at the General Meeting to
amend the Company's existing investment policy.

Under the Proposal:

·      The existing 30% Limit will continue to apply to the Manager.

·      However, notwithstanding the 30% Limit, where the aggregate
amount invested in Private Companies exceeds (or would, following additional
investment, exceed) 30% of the total assets of the Company, the Board may
permit the Manager to make additional investments in Private Companies of up
to an aggregate amount of £250 million (the "Additional Private Investment
Capacity") provided that:

(i)    this discretion(( 2  (#_ftn2) )) has been renewed by shareholders at
the Company's most recently held annual general meeting;

(ii)   the £250 million cap shall apply for the duration of the period when
the 30% Limit is exceeded (in case such period persists for a number of
years); and

(iii)  an overall cap of £250 million shall also apply in any period between
one annual general meeting of the Company and the next (regardless of how many
times the 30% Limit is exceeded during that period).

Subject to shareholder approval of the revised investment policy, the Board
may exercise its discretion to permit use of the Additional Private Investment
Capacity with effect from conclusion of the General Meeting on 10 April 2026
until the conclusion of the annual general meeting to be held in 2027. Renewal
of the Board's discretion will then be put to shareholders for approval at
each annual general meeting from 2027 onwards.

If the Private Companies exposure falls below the 30% Limit (following, for
example, an IPO of a Private Company holding) but then subsequently exceeds
the 30% Limit again (following, for example, a material uplift in the
valuation of another Private Company holding), the Additional Private
Investment Capacity would reset (subject to the overall £250 million cap to
apply between one annual general meeting of the Company and the next).

 

Benefits of the Proposal and consequences of the Proposal not being approved
by shareholders

The Board believes that the Proposal offers the following key benefits to
shareholders:

·      Flexibility to facilitate a small number of new and follow-on
investments in Private Companies: the Proposal gives the Board the power to
provide the Manager with limited additional flexibility to make both follow-on
and new investments in Private Companies where, due to public market
movements, revaluations of the Company's private investments and/or share
buybacks, the aggregate amount invested in Private Companies is in excess of,
or would as a result of such investment exceed, the 30% Limit; and

·      Tight parameters and governance: the Additional Private
Investment Capacity is capped at £250 million for the duration of the period
when the 30% Limit is exceeded (and subject to an overall cap of £250 million
between one annual general meeting and the next), with shareholders being
asked to renew their approval of the Board's discretion annually from the
Company's 2027 annual general meeting onwards.

In the event that the Resolution is not passed at the General Meeting, the
Company will continue to operate in accordance with its existing investment
policy. In those circumstances, and while the aggregate amount invested in
Private Companies remains above the 30% Limit, the Company's ability to make
further investments in Private Companies (including follow-on investments)
will remain constrained.

 

General Meeting

The Board considers that the Proposal, which is conditional on shareholder
approval at the General Meeting, is in the best interests of the Company and
its shareholders as a whole.

Shareholders should read the whole of the Circular and, in particular, the
letter from the Chairman, which contains the recommendation from the Board
that shareholders vote in favour of the Resolution to be proposed at the
General Meeting.

The General Meeting has been convened for 12 noon on 10 April 2026 at the
offices of Deutsche Numis, 21 Moorfields, London EC2Y 9DB. Notice of the
General Meeting is set out at the end of the Circular.

A copy of the Circular will be made available for inspection on the Company's
website (https://www.scottishmortgage.com/en/uk/individual-investors
(https://www.scottishmortgage.com/en/uk/individual-investors) ) and  on the
National Storage Mechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism).

Capitalised terms used in this announcement shall, unless the circumstances
require otherwise, have the same meanings given to them in the Circular.

 

 Expected timetable                                                          2026
 Publication of this document                                                16 March
 Latest time and date for receipt of Forms of Proxy and the appointment of   12 noon on 8 April
 proxies by electronic means for the General Meeting
 Record date for entitlement to vote at the General Meeting                  6.00 p.m. on 8 April
 General Meeting                                                             12 noon on 10 April
 Amended investment policy becomes effective (subject to the passing of the  10 April
 Resolution)
 Publication of the results of the General Meeting                           As soon as practicable after the conclusion of the General Meeting
 Renewal of Additional Private Investment Capacity put to shareholders for   at each annual general meeting of the Company from 2027 onwards
 approval

Notes:

1.             The times and dates set out in the timetable above
and referred to throughout this document, and any accompanying document, may
(save for the shareholder renewal of the Additional Private Investment
Capacity) be subject to change. In the event of such change, the revised times
and/or dates will be notified to shareholders by an announcement through a
Regulatory Information Service.

2.             All references to times in this announcement and in
the Circular are to London (UK) time, unless otherwise stated.

 

For further information:

Baillie Gifford & Co (AIFM and Company Secretary)

Claire Shaw                          +44 (0)131 474
5115

 

Four Communications (Communications agency)

Jonathan Atkins                   +44 (0)203 920 0555 or +44
(0)7872 495396

 

Deutsche Numis (Financial Adviser and Broker)

Nathan Brown                     +44 (0)207 547 0569

 

Jefferies International (Financial Adviser and Broker)

Stuart Klein                           + 44 (0)207
029 8000

 

 

(#_ftnref1) (( 1 )) As at the Latest Practicable Date.

(#_ftnref2) (( 2 )) With effect from conclusion of the 2027 annual general
meeting onwards.

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