Bending Spoons debut boosts Baillie Gifford
Bending Spoons, the Italian tech buyout specialist backed by Baillie Gifford, priced its Nasdaq IPO above range at $29 a share on 1 July, in a $1.68bn offering. Its shares rose 40% on debut, giving the company a market value of more than $25bn. The Schiehallion Fund (MNTN) and Baillie Gifford European Growth (BGEU) first took positions in August 2023 and, as at 22 June, the holdings were valued at around 9x and 12x their respective investment costs. The listing followed June’s record-breaking SpaceX IPO, another holding shared across Baillie Gifford-managed trusts, including The Schiehallion Fund, Baillie Gifford US Growth (USA) and Scottish Mortgage (SMT).
However, excitement surrounding Bending Spoons was somewhat tempered by SpaceX’s short-lived honeymoon period: after briefly trading above $225, the shares fell below the IPO price in mid-July and now sit around $115, down roughly 48% from the post-IPO peak, with the first lock-up releases due in August. Together, these developments illustrate both the value that can be created before an IPO and the volatility that may follow a listing. The Schiehallion Fund nevertheless retains substantial private-company exposure, which represented 74.1% of total assets at end-June. Anthropic, one of the trust’s largest holdings, has filed confidentially for a US listing (though an IPO date has yet to be announced), while other top holdings including Databricks, Stripe and ByteDance have all chosen to continue raising funds privately rather than list, with Revolut (which is also one of core portfolio holdings of Molten Ventures) confirming a $115bn valuation in a July secondary sale. An increasing number of high-growth businesses are choosing to remain private for longer, reinforcing the case for holding investment trusts that back private companies with the flexibility to defer a public listing.
Mixed results for Saba as corporate action accelerates
Saba Capital sent fresh tremors across the sector in July, albeit with mixed results. At Workspace Group’s AGM on 23 July, shareholders decisively rejected all six of the activist’s board nominees, backing the incumbent board’s turnaround strategy instead, despite Saba having increased its stake to become the largest shareholder on 14 July. Even so, Saba managed to force significant change elsewhere: on 20 July, the newly constituted board of Impax Environmental Markets served notice to terminate the trust’s manager. Against this backdrop, the Financial Conduct Authority (FCA) has published proposals to strengthen board independence and curb conflicts where a large shareholder is, or may become, the investment manager. On 15 July, HarbourVest Global Private Equity passed its first continuation vote with 98% support, which may indicate easing activist pressure, including from Asset Value Investors and Saba.
Corporate activity points to a sector still consolidating. NextEnergy Solar opened a formal sale process after years at a wide discount; SDCL Efficiency Income shareholders approved a managed wind-down; PrimeStone Capital urged Gresham House Energy Storage (GRID) to prepare a formal sale process for launch in September; and Alternative Income REIT is opposing a cash offer from Glenstone that includes a proposed managed wind-down.
UK AIFM proposals could ease the compliance burden
The FCA’s proposals at the end of June were welcomed across the investment trust sector. On 14 July, they were swiftly followed by a consultation paper to reform the regulatory framework for Alternative Investment Fund Managers (AIFMs). While the proposals are detailed and complex, one component is especially notable for UK fund managers: replacing leverage-inclusive assets under management (AUM) classification metrics with a three-tier size framework based on an AIFM’s aggregate NAV across all the funds it manages – small AIFMs (below £750m), medium-sized AIFMs (£750m–5bn) and large AIFMs (over £5bn). In particular, setting the small AIFM aggregate NAV threshold at £750m will meaningfully soften regulatory requirements for trusts whose managers fall in the £100–750m bracket, though the precise impact on an individual investment company depends on the total aggregate NAV managed by its AIFM rather than the size of the trust alone.
Separately, HM Treasury proposes to exempt certain small, internally managed listed investment companies from the AIFM regime based on AUM (rather than aggregate NAV), applying thresholds of £100m for leveraged companies and £500m for unleveraged companies with no redemption rights within five years. For listed closed-ended companies remaining within the regime, the FCA proposes disapplying duplicative AIFM investor-disclosure and annual-report rules, as well as redemption-related liquidity-management rules. The FCA aims to finalise the rules in 2027, with implementation envisaged in 2028.
Baker Steel Resources: Top performer in H126
Baker Steel Resources Trust (BSRT) was the best-performing investment trust in H126, delivering a 65% share price total return, ahead of Seraphim Space Investment Trust (57%) and Polar Capital Technology Trust (54%). As highlighted in our recent update note, BSRT posted a robust 15.4% NAV total return during the half, ahead of both the S&P/TSX Global Mining Index (c 5%) and MSCI World Metals & Mining Index (c 10%), bolstered by listed holdings Tungsten West, up 189% as the Hemerdon mine restart stays on track for phased commissioning from July, and Blue Moon Metals, up 84% on progress at its Nussir copper project. The trust’s discount to NAV has narrowed sharply, from 43% at end-2025 to around 20% at end-July 2026, and the board expects to declare a maiden interim dividend in September 2026, in line with its new capital allocation policy, alongside continued NAV-accretive buybacks. Reflecting growing institutional confidence in the manager’s specialist expertise, Golden Prospect Precious Metals has agreed heads of terms to appoint Baker Steel Capital Managers as its new investment manager and AIFM, expected to take effect during Q326.
