Founded in Edinburgh in 1908, Baillie Gifford is one of the United Kingdom's largest independent investment management firms, currently investing US$293 billion (as of September 2024) on behalf of a diversified global client base, remaining a privately-owned partnership throughout.
The absence of outside shareholders is a crucial foundation which naturally aligns Baillie Gifford's interests with the best long-term interests of their clients and creates stability amongst key personnel, who typically work at Baillie Gifford for decades.
The Global Quality Growth fund, which Baillie Gifford sub-manages for AIA, looks for companies that are sustainable in both sense of the word, i.e. Enduring Growth – those that can deliver sustained earnings growth over long periods of time, and Enduring Good – those that are creating value for society as they grow.
Over the long term, Enduring Growth and Enduring Good are mutually reinforcing:
- Companies which create value for society enjoy positive feedback loops which improve their ability to recruit and retain talent, innovate and adapt, and win new customers. This gives them a competitive advantage and a strong social licence to operate, allowing them to deliver enduring growth.
- In turn, only companies that operate successfully over long periods have the opportunity to make a lasting difference for society. Profits should not be a company's primary goal, but they are a necessary condition for delivering on its purpose.
The stronger the virtuous circle, the more excited the company's long-term prospects are – which the portfolio aims to benefit from.
