Private companies: backing tenacious trailblazers

Short Briefings on Long Term Thinking - Baillie Gifford

Many of the world’s most exciting, high-growth and disruptive companies are private. Moreover, the entrepreneurs running them are typically keeping them private for longer before trading their shares on public stock exchanges – and in some cases have no plans to do so.

Baillie Gifford’s Private Companies Team seeks out exciting businesses and founders in this space to give our clients access to an increasingly important source of long-term growth. Taking a highly selective approach, it has invested more than $9bn across over 140 firms over the past 12 years. In this podcast, Alexander Nicolier explains how it does so and discusses some of our notable holdings.

Background:

Alexander Nicolier is an investment manager in our Private Companies Team. In this Disruption Week briefing, he reveals the scale of the opportunity and the increasing impact that the sector’s restless founders and their exceptional companies are delivering.

From SpaceX to Bending Spoons, Epic Games to ByteDance, one of the distinguishing features of these pioneering firms is that they’ve been able to choose their shareholders. Nicolier reveals why Baillie Gifford’s patient approach and reputation have helped make us a favoured partner.

He also reveals how deep research helps him and his colleagues embrace the uncertainty that can be involved with backing companies at an earlier stage of growth than many public market stocks. And he introduces some of his team’s most recent investments, including the immersive experience specialist Cosm and the next-generation computing company Tenstorrent.

Resources:

Alexander Nicolier profile

Armand Spitz: seller of stars

Baillie Gifford Private Companies hub

Disruption Week

Private companies: investing in trailblazers

The hidden cost of software

Companies mentioned include:

Bending Spoons

ByteDance

Cosm

Disney

Epic Games

Loft

MercadoLibre

Meta

NuBank

Oddity

SpaceX

Starlink

Tempus

Tencent

Tenstorrent

Tesla

Timecodes:

0:00 Introduction

1:30 What’s often misunderstood about private companies

2:40 Relationship building in Brazil and Colombia

3:40 Why reputation matters

5:35 “Look out for a gringo”

6:30 Private markets’ scale

7:00 Our clients’ advantage

9:25 SpaceX and uncertainty

12:40 Dealing with setbacks

13:45 Bending Spoons’ business model

16:50 Cosm’s ‘shared reality’ experience

18:50 Tenstorrent and Jim Keller’s talent magnetism

20:20 The state of the IPO market

21:55 Why Epic Games has stayed private

25:00 Disney’s $1.5bn stake in Epic Games

26:40 “Too big to ignore”