Our history

The Straits Mortgage and Trust Company floated the following year, with its assets managed by the newly created law firm Baillie & Gifford WS. The timing was fortuitous. The Ford Motor Company had just begun production of the Model T, whose tyres required large quantities of rubber. The car took the US by storm, causing the substance’s prices to soar.

It didn't take long for the Trust to broaden its horizons, investing in a US land deal, a Chilean railway and one of the UK's largest theatre groups, among other assets. In 1913, the Board decided to rename it Scottish Mortgage.

Its success led to other trusts, including the Edinburgh and Dundee Investment Company.

To build on this success, Scottish Mortgage and its fellow trusts increased their balance sheets by selling new shares and raising debt. They were also joined by two further launches: Scottish Central and Scottish Capital.

In 1927, the two founders wanted to add a partner from outside the legal profession. That wasn’t possible within their existing law firm. So they created a new business, Baillie Gifford & Co, to take on the trusts’ management.

Baillie Gifford & Co’s broader business also expanded. In 1931, it took over the management of three trusts previously run by a London-based bank that had failed in the turmoil. Known as ‘the ecclesiasticals’, they were Monks, Friars and Abbots. The firm then opened its first office in London to continue their business.

By 1935, stock markets were enjoying a modest revival. That allowed some of the trusts to start raising fresh capital. But another crisis was looming.

These assets were to be sold to the US to pay for military supplies. The US had been badly burnt by non-repayment of loans made to allies in the First World War, and Congress had blocked the financing of further loans to Westminster.

In November, the Treasury sent Gifford to New York to negotiate the best price for the UK’s estimated $4.4bn worth of dollar assets. Success led to his involvement in follow-up discussions in 1941 to secure a $425m loan, which Congress permitted.

Gifford then returned to Edinburgh and the skeleton staff running his business. Other employees returned from service from 1945 onwards.

The post-war investment climate was challenging. However, some British companies’ profits rose because of reduced competition from continental Europe and the Far East. And within a couple of years, the trusts’ performance had surpassed that of the early 1930s.

The firm also acquired its first pension fund clients: the Cadbury Brothers chocolate makers and the Times Newspapers.

By 1950, Carlyle Gifford was approaching 70. He still chaired some meetings but no longer oversaw day-to-day matters.

The partner in charge opted to focus on existing business rather than expansion. He blocked several trusts from borrowing more and turned down opportunities to take on new pension funds.

That’s not to say that all momentum was lost. When, in the early 1960s, Japan opened its market to overseas investors for the first time in decades, Baillie Gifford was among the early buyers of bonds from Canon, among others.

Another law, the 1967 Companies Act, increased disclosure requirements. It led to several of the trusts merging. Monks acquired its fellow ‘ecclesiasticals’, Scottish Mortgage took over Scottish Capital, and Edinburgh & Dundee absorbed Scottish Central, among other unions.

The broader investment environment worsened in the early 1970s. A Saudi-led oil embargo and rising inflation, which topped 20 per cent in the UK, sent stocks plunging.

In a further blow, Baillie Gifford lost two pension fund clients after the sale of the Times Newspapers in 1975 and the bankruptcy of another business in 1976.

That was a rude awakening. Market conditions were still poor, and discounts on trusts were wide. Baillie Gifford might have become unviable if a predator had picked off another trust.

So it decided to pursue new business.

Drawing on partners’ personal connections, the WS Widows Fund became a client, and the firm began managing a Church of Scotland Trust income fund.

The launch of BG Japan Trust in 1981 and BG Shin Nippon in 1985, focusing on smaller Japanese stocks, also signalled we were back on the front foot. So too, did our introduction of a series of open-ended funds targeted at smaller investors, including BG Income Growth, BG Europe and BG British Growth.

The other critical factor was that we built up our pensions fund business. In 1984, we won our first competitive pitch, securing lorry trailer maker Crane Fruehauf’s retirement fund. Others followed, including the drinks and pharmaceutical company Distillers, Essex County Council and the tyre maker Michelin. And in 1987, the Managed Fund launched, a unit trust designed for smaller pension funds.

Overall funds under management grew from £300m in 1979 to £3.5bn in 1989.

At home, our UK pension fund business continued to grow. It now served many Scottish and English local authorities, including Highland Council and the Royal Borough of Kensington and Chelsea. 

The Finance Act of 1997 required us to change how we administered this business. So we created Baillie Gifford Life Limited, a life assurance company owned by our partners. 

We also made gains elsewhere, including the addition of Pacific Horizon Trust in 1992 after weak performance by its previous manager.  

By the end of 1998, portfolio assets totalled £16.2bn. 

These soon attracted forward-thinking pension fund clients from far afield, including those of companies and public bodies in Australia, South Korea and Hong Kong, as well as closer to home, including the BBC.

China, India and other rising emerging markets helped boost the world’s growth rate. But the new millennium also brought the dotcom crash of internet stocks and the subprime mortgage-sparked Global Financial Crisis.

Despite all the turmoil, we continued to advance.

In 2003, the giant US investment firm Vanguard appointed us to help manage its International Growth Fund, kickstarting a long-lasting relationship.

Toyo Trust’s merger with two other banks in 2002 and subsequent absorption into Mitsubishi UFJ Trust and Banking Corporation in 2005 also played to our favour, as we continued to partner with the now enlarged business.

The boards of Edinburgh Worldwide Investment Trust and the Scottish American Investment Company (SAINTS) also switched management to us.

And we added a range of fixed-income products to our open-ended investment companies, starting with the High Yield Bond Fund and Investment Grade Bond Fund.

At the end of 2007, as we prepared to celebrate our centenary, total assets under management were £55.3bn.

But there have been challenges too. The Financial Crisis of 2008, the Covid-19 pandemic, increasing geopolitical instability and the return of high inflation all added volatility to the markets.

We have also had to adapt to the shrinking defined benefit pensions market in some countries, with many private sector employers now offering defined contribution schemes and de-risking their older plans. While we do not see the growth of our firm as an end in itself – that should naturally follow from achieving good results for clients – we have gradually built our ability to target a broader audience geographically and by client type.

We now work with clients in 46 countries, covering a wide spectrum from pension funds to other financial institutions, sovereign wealth funds, wealth managers, financial advisers and, in our home market, retail investors.

China has become an increased focus. We opened an office in Hong Kong in 2015 and in Shanghai in 2020. They help us to serve local savers and institutions looking to invest overseas and give us an edge when researching and investing in Chinese companies.

In addition, we established a Private Companies Team to support investments outside public markets, where some of the most exciting, fast-rising companies thrive.

We also continued to launch new funds, including:

• Multi Asset options that mix equities and bonds
• The Health Innovation Fund
• Our first funds with explicit sustainability goals as well as performance targets: Sustainable Growth and Positive Change

And we took over the management of two further trusts: Witan Pacific, whose board renamed it Baillie Gifford China Growth Trust, and Keystone Investment Trust, which became Keystone Positive Change.

At the end of 2023, we had over £225bn of assets under management.

As we’ve increased in size, we have also cut our fees across many products to share the benefits of our own growth with clients.

We are now the UK’s only large-scale asset manager that’s an independent, unlimited liability, private partnership. It’s a model that lets us continue to put our clients’ interests above all else.