Jefferies reiterates SMT 'Buy' rating following 'useful' private equity disclosures
'The overarching theme was presented that the multiple headwinds for growth stocks over the past two years, namely valuation compression, downward earning revisions and a deceleration of growth, have reversed.'
The meeting took place yesterday (11 January) and Jefferies analysts Matthew Hose and Fiona Huang said the managers' presentation regarding the trust's ten largest private equity holdings reassured them of the «robustness of the valuation process».
Scottish Mortgage top ten unlisted holdings deep dive reassures analysts
Scottish Mortgage was publicly criticised by former board member Amar Bhidé during a high-profile conflict with then chair Fiona McBain, accusing the trust of being unable to properly manage its exposure to illiquid investments.
This came after several months of analyst concerns over SMT's PE allocations after its self-imposed 30% exposure limit was breached several times during the year, due to declines in value of its listed equity portfolio.
SMT then released a deep dive into its ten largest unlisted holdings in October, and lead manager Tom Slater defended and clarified the investment methods to Investment Week.
Q&A: SMT's Tom Slater on taking over from James Anderson, ESG and private markets
The three largest PE positions in SMT are SpaceX, Northvolt and ByteDance, which comprise 10.5% of the trust's net asset value as of 30 November 2023, of which Hose and Huang noted the «conservative» carrying valuations when compared with the most recent transactional data points.
They added SpaceX's $155bn valuation contrasted with the $180bn value implied by the recent tender, while Northvolt's $10bn valuation compares to an indicated potential IPO value of $20bn.
Additionally, ByteDance's $248bn
Read more on investmentweek.co.uk
