Scottish Mortgage 'under pressure' due to stretched private assets exposure

Several possible remedies

Scottish Mortgage is sitting in an uncomfortable position with its private equity exposure at full capacity, but analysts have pointed out several ways the managers of the £14.5bn investment trust giant could relieve some of the pressure.

As a result of public equity market falls, particularly among the growth stocks that the trust focuses on, the unlisted portion of Scottish Mortgage's portfolio has risen above its self-imposed limit of 30% for the second time in nine months. While going over the 30% limit does not represent a breach of the investment policy, as it applies at the time of purchase, it means that there is little scope for the managers to make any follow-on investments or invest in new opportunities. Emma Bird, head of investment companies research at Winterflood, views this as the biggest concern for th...