Annual Report and
Financial Statements
Baillie Gifford
US Growth
Trust plc
31 May 2024
Notes
None of the views expressed in this document
should be construed as advice to buy or sell a
particular investment.
Investment trusts are UK public listed companies
and as such comply with the requirements of the
Financial Conduct Authority. They are not authorised
or regulated by the Financial Conduct Authority.
Baillie Gifford US Growth Trust plc (the ‘Company’)
currently conducts its affairs, and intends to continue
to conduct its affairs, so that the Company’s ordinary
shares can qualify to be considered as a mainstream
investment product and can be recommended
by Independent Financial Advisers to ordinary
retail investors in accordance with the rules of
the Financial Conduct Authority in relation to
non-mainstream investment products.
This document is important and requires your
immediate attention.
Investor disclosure document
The UK Alternative Investment Fund Managers
Regulations requires certain information to be
made available to investors prior to their making an
investment in the Company. The Company’s Investor
Disclosure Document is available for viewing at
bgusgrowthtrust.com.
If you are in any doubt as to the action you should
take you should consult your stockbroker, bank
manager, solicitor, accountant or other Independent
Financial Adviser authorised under the Financial
Services and Markets Act 2000 if you are in the
United Kingdom or, if not, from another appropriately
authorised financial adviser.
If you have sold or otherwise transferred all of your
ordinary shares in Baillie Gifford US Growth Trust
plc, please forward this document, together with any
accompanying documents, but not your personalised
Form of Proxy, as soon as possible to the purchaser
or transferee, or to the stockbroker, bank or other
agent through whom the sale or transfer was or
is being effected for delivery to the purchaser or
transferee.
01
Baillie Gifford US Growth Trust plc
Contents
Financial highlights 02
Purpose and investment principles 04
Strategic report
Chair's statement 07
Managers' review 09
Baillie Gifford's stewardship principles 14
Baillie Gifford proxy voting 15
Baillie Gifford environmental, social and governance engagement 16
One year summary 20
Five year summary 22
Summary of results since inception 24
Review of investments 26
Portfolio executive summary 30
Baillie Gifford – valuing private companies 34
List of investments 41
Business review 45
Governance report
Directors and management 58
Directors’ report 61
Corporate governance report 66
Audit Committee report 73
Directors’ remuneration report 76
Statement of Directors’ responsibilities 80
Financial report
Independent Auditor’s report 83
Income statement 90
Balance sheet 91
Statement of changes in equity 92
Cash flow statement 93
Notes to the Financial Statements 94
Shareholder information
Notice of Annual General Meeting 113
Further shareholder information 118
Third party data provider disclaimer 120
Sustainable Finance Disclosure Regulation 121
Communicating with shareholders 122
Glossary of terms and alternative performance measures 124
Company information 129
Introduction
Annual Report and Financial Statements 2024
02
Financial highlights
Year to 31 May 2024
* Alternative performance measure – see Glossary of terms and alternative performance measures on pages 124 to 127.
†
The comparative index is the S&P 500 Index total return (in sterling terms).
#
Net asset value per share (‘NAV’) with borrowings at fair value. At 31 May 2024 the NAV with borrowings at fair value was the same as the NAV with
borrowings at book value. For a definition of terms see Glossary of terms and alternative performance measures on pages 124 to 127.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 120.
Past performance is not a guide to future performance.
Share price
32.9%
NAV
#
16.2%
Comparative index
†
24.8%
Share price, NAV and comparative index total return*
(figures rebased to 100 at 31 May 2023)
Discount*
(figures plotted at month end dates)
Total returns
*
90
100
110
120
130
140
150
MAMFJDNOSAJJM
NAV
#
Share price Comparative index
†
2023
2024
(25
%)
(20
%)
(15
%)
(10%)
MAMFJDNOSAJJM
Discount
2023
2024
Baillie Gifford US Growth:
The American Dream made real
Baillie Gifford US Growth Trust plc
03
Introduction
Annual Report and Financial Statements 2024
04
Purpose and
investment principles
Baillie Gifford US Growth
aims to deliver above
average long-term returns
for shareholders by
keeping fees and costs
low and harnessing the
long-term growth potential
of companies.
Our purpose
Baillie Gifford US Growth aims to find, own and
support the most exceptional public and private
growth companies in America.
We believe that our investment approach of
long termism, embracing asymmetry, and global
perspective gives us an advantage in uncovering
exceptional growth companies. Our opportunity set
is wide given the Company’s structure means we can
invest in exceptional growth companies regardless of
their listed status.
Exceptional growth companies address huge market
opportunities at an early stage, possess a sustainable
competitive edge and enjoy powerful and effective
cultures that enable them to realise their long-term
potential. We believe such companies contribute to
productive innovation in society and, over the full
course of time, these companies will develop deep
competitive moats and generate abnormal profits
and unusually high shareholder returns.
We endeavour to generate returns for our
shareholders by helping in the creation and
improvement of such useful enterprises. If we are
successful in identifying these companies, we believe
that we can multiply our shareholders’ wealth over
the long term.
Baillie Gifford US Growth Trust plc
05
Our investment principles
Managing shareholders’ money is a huge privilege
and not one we take lightly. It is a relationship,
not a transaction. Relationships can only be built on
a foundation of trust and understanding. With this in
mind, we seek to lay out the fundamental principles
by which we will manage your money and the
framework for how we make decisions so that you,
our shareholders, can decide whether it aligns with
your investment philosophy.
ș We believe the fundamental measure of our
success will be the value we create for our
shareholders over the long term. It is only
over periods of five years or more that the
characteristics we look for in businesses
become apparent. Our turnover has been low,
consistent with our time horizon. We ask that
our shareholders measure our performance over
similar periods.
ș Short-term volatility is an inevitable feature of
the market, and we will not manage the portfolio
to reduce volatility at the expense of long-term
gain. Many managers are risk-averse and fear
loss more than they value gain. Therefore, they
accept smaller, more predictable risks rather
than the larger and less predictable ones.
We believe that this is harmful to long-term
returns, and we will not shy away from making
investments that are perceived to be risky if we
believe that the potential payoffs are worthwhile.
This means that our performance may be lumpy
over the short term.
ș We believe, and academic work has shown,
that long-term equity returns are dominated by
a small handful of exceptional growth companies
that deliver outsized returns. Most stocks do
not matter for long-term equity returns, and
investors will be poorly served by owning them.
In our search for exceptional growth companies,
we will make mistakes. But the asymmetry
inherent in equity markets, where we can make
far more in a company if we are right than lose
if we are wrong, tells us that the costliest of
mistakes is excessive risk aversion.
ș We do not believe that the index is the right
starting point for portfolio construction. The index
allocates capital based on size. We believe that
capital should be allocated based on marginal
return and the ability to grow at those rates
of return. Big companies are not immune to
disruption. We do not manage the portfolio to
an active share target, but we expect the active
share of the Company to be high.
ș We are largely indifferent to a company’s private
or public status. We will conduct diligent analysis
and allocate capital to where the highest returns
are likely to be.
ș We believe our duty is to maximise the long-term
wealth of our shareholders, and that placing
emphasis on short-term performance serves our
shareholders poorly.
ș We will endeavour to operate in the most
efficient, honest and economical way possible.
That means keeping our ongoing costs
including management fees low. We recognise
that even modest amounts, when allowed to
compound over long periods of time, add up to
staggering sums, and we do not wish to dilute the
compounding of returns with the compounding
of costs.
With this foundation, we aim to build Baillie Gifford
US Growth Trust into a world-class savings vehicle.
We are grateful that you have joined us on this
journey, and we look forward to a long and hopefully
prosperous relationship with you.
The Strategic report, which
includes pages 7 to 56 and
incorporates the Chair’s statement
has been prepared in accordance
with the Companies Act 2006.
Strategic
report
07
Baillie Gifford US Growth Trust plc
Chair’s
statement
Tom Burnet
Chair
Appointed
Director and Chair
5 March 2018
I am pleased to report an improvement in
performance during the financial year to
31 May 2024. The Company’s share price and net
asset value, calculated by deducting borrowings
at fair value, total returns were 32.9% and 16.2%
respectively. This compares with a total return of
24.8% for the S&P 500 Index
*
(in sterling terms).
Over the period from 23 March 2018 (launch date
and first trade date), the Company’s share price and
net asset value, calculated by deducting borrowings
at fair value, returned 91.4% and 121.2% respectively
compared to a total return of 152.0% for the
S&P 500 Index
*
(in sterling terms).
Further information about the Company’s portfolio
performance is covered by our portfolio managers,
Gary Robinson and Kirsty Gibson, in their
Managers’ review.
Share issuance and buy-backs
The Company’s shares moved from a discount of
22.4% at the start of the financial year to a discount
of 11.2% at 31 May 2024 as sentiment towards the
Company’s growth investing style and the investment
trust sector more generally improved. During the
financial year the Company deployed its buy-back
powers and 7,925,000 shares were bought back,
representing 2.6% of the Company’s issued share
capital at the start of the year. The Board recognises
the importance of the Company’s liquidity policy and
regularly discusses this topic at Board meetings.
As at 31 May 2024, the Company had authority,
which was granted at the 2023 Annual General
Meeting, to issue a further 30,515,370 shares and
to buy-back a further 45,742,539 shares. These
authorities expire in September 2024. The Company
will be seeking to renew both the issuance and
buyback authorities at the forthcoming Annual
General Meeting.
* Source: LSEG and relevant underlying index providers. See disclaimer on page 120.
For a definition of terms see Glossary of terms and alternative performance measures on pages 124 to 127.
Past performance is not a guide to future performance.
Strategic report
Annual Report and Financial Statements 2024
08
Gearing
The Company has two loan facilities in place.
The US$25 million five-year revolving credit facility
with ING Bank N.V., London Branch, which matured
on 31 July 2023, was refinanced with a US$25
million three-year revolving credit facility from ING
Bank N.V., London Branch on 26 July 2023. The
US$25 million three-year fixed rate facility with ING
Bank N.V., London Branch matured on 23 October
2023 and was refinanced with a US$25 million
three-year revolving credit facility from The Royal
Bank of Scotland International Limited on 18 October
2023. The facilities are available to be used to
fund purchases of securities as and when suitable
opportunities arise. As at 31 May 2024, the facilities
had been drawn down in full (31 May 2023 – US$50
million). Net gearing fell from 6% to 5% over the
course of the year.
Earnings and dividend
The Company’s priority is to generate capital
growth over the long term. The Company therefore
has no dividend target and will not seek to provide
shareholders with a particular level of dividend.
The net revenue return per share for the year to
31 May 2024 was a negative 2.07p (period to
31 May 2023, a negative 1.55p). As the revenue
reserve is again running at a deficit, the Board is
recommending that no final dividend be paid. Should
the level of underlying income increase in future
years, the Board will seek to distribute the minimum
permissible to maintain investment trust status
by way of a final dividend.
Private company investments
As at the Company’s year end, the portfolio weighting
in private company investments stood at 34.1%
of total assets, invested in 24 companies (2023
– 34.5% invested in 25 companies). There was
one new purchase in the year, Human Interest, and
Oddity listed during the period (the Convoy holdings
were written off during the period subsequent to the
company ceasing operations). There is commentary
on the new and existing holdings in the Managers’
review and the review of investments on pages 9 to
12 and 26 to 29. Your portfolio managers remain alert
to further special and high potential opportunities not
widely accessible through public markets.
Environmental, Social and Governance (ESG) matters
The Company’s Managers believe that sustainability
is inextricably linked to being a long-term investor,
and their thoughts on this topic are set out in more
detail on page 14. The Managers’ pursuit of long-term
growth opportunities typically involves investment
in entrepreneurial, disruptive and technology-driven
businesses. These companies are often capital-light
with a low carbon footprint.
Annual General Meeting
The Annual General Meeting of the Company
has been scheduled to be held at the offices of
Herbert Smith Freehills in London (Exchange House,
Primrose Street, London, EC2A 2EG) at 9.00am
on Friday, 27 September 2024. All shareholders
are invited to attend, and the Board looks forward
to welcoming you. The meeting will be followed
by a presentation from the Managers. I encourage
shareholders to submit their votes by proxy
before the applicable deadline ahead of the
meeting and to submit any questions for the
Board or Managers in advance by email to
trustenquiries@bailliegifford.com or by calling
0800 917 2112 (Baillie Gifford may record your call).
Outlook
In our last report I allowed myself to imagine that
peaking interest rates might see valuations begin to
recover during 2024. Clearly the Board is delighted
that we have seen an improvement in our share
price and a narrowing of our discount over the
intervening period. Perhaps more importantly though,
we continue to believe that the seismic changes in
technology that underpin many of the companies
we are invested in will continue and accelerate. We
are at an inflexion point where many verticals, from
transportation to drug discovery to communications
and many others, are all ripe for disruption and we
firmly believe that the portfolio of businesses we
own includes many that will deliver outsize returns
to long-term investors.
Tom Burnet
Chairman
21 August 2024
09
Baillie Gifford US Growth Trust plc
Managers’
review
Gary Robinson
Portfolio manager
Kirsty Gibson
Portfolio manager
In recent years, we have observed a marked shift
in emphasis among the companies in your portfolio.
There has been a pivot from prioritising growth
alone to embracing a more balanced approach that
incorporates both growth and profitability. In our
previous interim report, we characterised 2022
as the ‘year of reorientation’ and 2023 as the
‘year of execution’. We are now witnessing the
tangible benefits of this strategic shift, as evidenced
by the improved financial metrics across your
portfolio companies.
As of the end of March, 67% of the portfolio was
generating positive cash flow or positive earnings
per share (‘EPS’), a notable increase from 48% in
March 2023. Crucially, growth has remained robust
during this period of improving profitability. The
median revenue growth rate exceeded 18% over
the year to March 2024, significantly outpacing the
S&P 500 Index. This dual achievement – maintaining
strong growth while enhancing profitability – is a
testament to the quality and adaptability of our
chosen companies.
It is our view that many of your holdings are
emerging from the challenging post-Covid period
in a stronger position than when they entered it.
These businesses have not only addressed cost
bases that had become inflated during the pandemic
but have also evolved their strategies, organisational
structures and processes. Companies that were
buffeted by pandemic-induced demand fluctuations
have become leaner and more agile, positioning
themselves for higher profitability.
Strategic report
Annual Report and Financial Statements 2024
10
We see parallels between the current situation and
the period following the Global Financial Crisis.
Then, as now, many businesses faced unexpectedly
weak demand, with cyclical companies in the
consumer discretionary and industrial sectors
particularly affected. However, we observed that
the most adaptable of these businesses emerged
from that period stronger. For instance, the
multi-industrial business United Technologies
Group, which we held in our American Fund,
achieved higher margins in 2011 than in 2008,
despite sales not having fully recovered. The market
underestimated this recovery, leading to strong
share performance.
A similar pattern is now unfolding with internet-
focused companies. Consider Shopify, the
ecommerce tools platform. Its free cash flow margin
turned negative post-Covid as lockdown-driven
demand waned. However, following a period of
reorientation, margins have recovered to prior peak
levels and could potentially surpass them this year.
What drove Shopify to pursue such a rapid
turnaround? While there was some pressure to cut
costs given the shift in stock market sentiment,
the company was motivated by a more pressing
concern. Chief executive Tobi Lütke recognised that
artificial intelligence (‘AI’) would be key to Shopify’s
future, and he wanted to ensure the company was
well-positioned to capitalise on this opportunity.
This required Shopify to become leaner to move
faster. Lütke insightfully noted that companies often
become sluggish not due to their size, but because
of an accumulation of ‘side quests’ – projects
adjacent to the main mission that don’t directly serve
it. While these may be manageable during stable
economic times, they can hinder agility when the
market landscape shifts.
In response, Shopify streamlined its operations,
divesting its logistics business to focus on AI. The
company also eliminated unnecessary meetings and
cut bureaucracy, resulting in a one-third increase in
engineer productivity. Customer service efficiency
has also improved, with AI already assisting in over
half of customer service inquiries in the January
– March quarter. Shopify is optimistic that AI will
help contain costs while maintaining robust top-line
growth. The newly streamlined Shopify is emerging
better positioned to exploit the product and cost
opportunities afforded by generative AI.
The launch of ChatGPT at the end of 2022 brought
AI into the spotlight, and we believe this attention
is warranted. Indeed, recent advancements in AI
represent some of the most important technological
developments in a century. The internet and
mobile drove near universal access to computing
power. AI is rendering computers intelligent. It
is outperforming humans in certain tasks and is
improving at a remarkable rate. It has the potential to
make large swathes of the economy more efficient.
Our decision to reinvest in Meta (previously
Facebook) last year was partly driven by our view
that the company is uniquely placed to leverage AI.
AI requires substantial financial resources and data,
both of which Meta possesses in abundance. The
company also boasts a strong engineering culture
and appears well-positioned to attract top talent.
We see numerous parallels between Shopify’s
strategic shift and Meta’s ‘year of efficiency’. Both
companies, compelled by necessity, streamlined
their teams to address the complexities bred from
growth and to position themselves for the new
AI paradigm. Mark Zuckerberg optimised Meta
by trimming managerial layers, thus accelerating
decision-making. Like Shopify, he made the company
leaner by cancelling lower priority projects – the
aforementioned ‘side quests’. Zuckerberg shares
Lütke’s view that side quests can slow a company
down. For instance, side quests require IT and HR
support and, as these functions grow, they can
become less responsive to the main mission.
A leaner organisation, perhaps counterintuitively,
often executes faster.
AI is already beginning to impact Meta’s business.
It was Meta’s use of AI that enabled it to successfully
navigate Apple’s ad-targeting rule changes a few
years ago. Meta is also using AI to refine its content
recommendation algorithm and has already seen
improvements in user engagement as a result.
Investments in AI are not inexpensive. Both Meta
and Amazon have revised their capital expenditure
budgets upward due to their AI spending plans.
However, this expenditure remains manageable in
the context of their prodigious cash flows. Indeed,
Amazon’s margins are on an upward trend and, like
Shopify’s, are poised to exceed their prior peak
levels in the coming years.
11
Baillie Gifford US Growth Trust plc
NVIDIA, another holding in your portfolio, has been
a key beneficiary of this AI spending boom. Its
revenues grew by a remarkable 125% last year and
the shares responded accordingly. We reduced our
position earlier this year to reflect the change in
risk-reward profile.
As mentioned, we believe Shopify and Meta have
emerged from their periods of reorientation stronger
and better positioned for the future. Block has
undergone a similar transformation over the past
year, which was one of the key motivations for our
recent investment. Block, which owns merchant
software provider Square and financial app Cash
App, has always been an exceptional product
company. However, it historically lacked financial
discipline, and this lack of focus had begun to impact
its pace of innovation. This appears to be changing.
Founder Jack Dorsey is now managing the business
to stringent targets that balance both growth and
profitability. Employee numbers have been capped,
and he has restructured the company to refocus on
its core mission. As a result, Block is now more agile
and seems poised to become significantly more
profitable.
One feature common to Shopify, Meta and Block,
and indeed many of your other holdings, is the
presence of a founder-leader. It has long been
our contention that founder-led businesses
are more adaptable than average. This is partly
because founders wield what Ben Horowitz calls
‘moral authority’ – the credibility necessary to
make substantial strategic changes. The rapid
transformations we have witnessed at Shopify,
Meta and Block in response to changing market
conditions are rare in non-founder-led businesses.
Portfolio changes
While AI has dominated recent headlines, it is
not the only disruptive force to have emerged in
recent years. In the healthcare sector, a new class
of medicines called GLP-1s has created a stir due
to their ability to induce weight loss. While we do
not have direct exposure to manufacturers of these
drugs, the excitement surrounding GLP-1s indirectly
led to the purchase of two new healthcare holdings:
Insulet, which produces pumps for treating diabetes,
and Inspire Medical Systems, which manufactures
surgical implants for sleep apnoea. Both stocks
experienced sell-offs due to fears that GLP-1s would
shrink their addressable markets. While diabetes
and sleep apnoea are linked to obesity, making this
concern understandable, we believe that the patient
cohorts from which Insulet and Inspire derive most
of their revenues are unlikely to be significantly
impacted by GLP-1s. We had been following both
businesses for some time and used this weakness
as an opportunity to initiate positions.
Other notable new holdings in the period include:
Guardant Health, a provider of molecular diagnostic
tests for cancer; YETI, a consumer branded goods
company renowned for its durable coolers and
drinks containers; Sprout Social, a social media
management platform; and Samsara, a provider of
telematics and safety technology for the trucking
industry.
We also made several complete sales during this
period. We parted ways with communications
software provider Twilio, which had been
underperforming for some time. The catalyst for this
sale was the departure of its founder, Jeff Lawson.
We also divested our position in videoconferencing
software company Zoom, which was struggling to
grow amidst fierce competition from Microsoft’s
Teams. Other complete sales included Snap,
Chegg, Illumina, MarketAxess, Novocure, Redfin
and Warby Parker.
While this may seem like a substantial list of
changes, it’s important to note that your portfolio
turnover remains low at 14%, consistent with our
five to ten-year holding period. This underscores
our commitment to long-term investing and our
conviction in the companies we hold.
On the unlisted front, we made one additional
investment during the year: Human Interest,
which helps small and medium-sized businesses
offer retirement plans to their employees.
The IPO market is beginning to show signs of life,
although volumes remain well below pre-pandemic
levels. As mentioned in our interim report, one of
your holdings, online cosmetics company Oddity,
went public during the year. We anticipate that
more of the private businesses in your portfolio will
transition to public markets in the coming years.
At the end of the reporting period, the Company held
24 private companies, which in aggregate comprised
34.1% of total assets. The allocation to private
companies is concentrated, with the top five private
companies comprising over half of the allocation,
and the top ten comprising over three-quarters.
We have provided a summary of the operational
progress of the top ten private companies on pages
38 to 40.
Strategic report
Annual Report and Financial Statements 2024
12
Outlook
The US remains a fertile hunting ground for
growth investors. Its companies are leading in new
technological paradigms like AI, just as they led
previous innovation waves such as the internet and
mobile. Our aim is to identify the most exceptional
amongst these companies and hold them for the
long term, thereby capturing the unique upside that
such companies offer. In our experience, one of the
key features that unites such firms is adaptability.
To endure and thrive over the long term, businesses
must be able to respond effectively to changing
market circumstances and technological paradigms.
The transformations we have witnessed at holdings
including Shopify, Meta, Block and, indeed, NVIDIA
over the past few years are extremely encouraging
in this context. They have demonstrated their
adaptability and are now better positioned for
the future.
The next cohort of generationally important
companies will share this ability to adapt, innovate
and position themselves for a rapidly evolving future.
It is our conviction that many such companies are
present in your portfolio, across both your public and
private holdings.
Markets have been volatile lately, reflecting
uncertainty about the future. We believe our investee
companies have the qualities necessary to navigate
through this uncertainty. The best companies create
opportunities for themselves, even in challenging
environments. We believe this feature is structurally
underappreciated by markets and exploitable by
patient investors.
As we look ahead, we remain excited about the
prospects for your portfolio and confident in our
ability to continue identifying and investing in the
companies that will shape the future of the global
economy.
US Equity Growth Team
Baillie Gifford & Co
21 August 2024
13
Baillie Gifford US Growth Trust plc
Strategic report
Annual Report and Financial Statements 2024
14
Baillie Gifford’s
stewardship principles
Baillie Gifford’s overarching ethos is that we are
‘Actual’ investors. That means we seek to invest for
the long term. Our role as an engaged owner is core
to our mission to be effective stewards for our clients.
As an active manager, we invest in companies at
different stages of their evolution across many
industries and geographies, and focus on their unique
circumstances and opportunities. Our approach
favours a small number of simple principles rather
than overly prescriptive policies. This helps shape our
interactions with holdings and ensures our investment
teams have the freedom and retain the responsibility
to act in clients’ best interests.
Long-term value creation
We believe that companies that are run for the
long term are more likely to be better investments
over our clients’ time horizons. We encourage our
holdings to be ambitious, focusing on long-term
value creation and capital deployment for growth.
We know events will not always run according to
plan. In these instances we expect management
to act deliberately and to provide appropriate
transparency. We think helping management to
resist short-term demands from shareholders often
protects returns. We regard it as our responsibility to
encourage holdings away from destructive financial
engineering towards activities that create genuine
value over the long run. Our value will often be in
supporting management when others don’t.
Alignment in vision and practice
Alignment is at the heart of our stewardship
approach. We seek the fair and equitable treatment
of all shareholders alongside the interests of
management. While assessing alignment with
management often comes down to intangible factors
and an understanding built over time, we look for
clear evidence of alignment in everything from
capital allocation decisions in moments of stress
to the details of executive remuneration plans and
committed share ownership. We expect companies
to deepen alignment with us, rather than weaken it,
where the opportunity presents itself.
Governance fit for purpose
Corporate governance is a combination of structures
and behaviours; a careful balance between systems,
processes and people. Good governance is the
essential foundation for long-term company
success. We firmly believe that there is no single
governance model that delivers the best long-term
outcomes. We therefore strive to push back against
one-dimensional global governance principles in
favour of a deep understanding of each company
we invest in. We look, very simply, for structures,
people and processes which we think can maximise
the likelihood of long-term success. We expect to
trust the boards and management teams of the
companies we select, but demand accountability
if that trust is broken.
Sustainable business practices
A company’s ability to grow and generate value for
our clients relies on a network of interdependencies
between the company and the economy, society and
environment in which it operates. We expect holdings
to consider how their actions impact and rely on these
relationships. We believe long-term success depends
on maintaining a social licence to operate and look
for holdings to work within the spirit and not just the
letter of the laws and regulations that govern them.
Material factors should be addressed at the board
level as appropriate.
15
Baillie Gifford US Growth Trust plc
Baillie Gifford
proxy voting
We believe that ‘active ownership’ of our clients’
holdings is as important as selecting the right
investments in the first instance. These guidelines
are aligned with our stewardship principles and
describe our approach to proxy voting and company
engagement, the key levers of active ownership,
often described as ‘stewardship’.
While these guidelines are intended to provide an
insight into how we approach voting on our clients’
behalf, it is important to note that we assess every
company individually. In voting, we will always
evaluate proposals on a case-by-case basis, based
on what we believe to be in the best long-term
interests of our clients, rather than rigidly applying
a policy.
A broad cross section of our investment staff are
involved in our ongoing work on stewardship. In the
same way that our investment approach is based
around empowered and independent teams, our
voting and engagement is led by the individual
investment teams. In keeping with our decentralised
and autonomous culture, our investment teams will,
on occasion, elect to vote differently on the same
general meeting resolutions. Where this happens, we
report accordingly in the proxy voting disclosure on
our website. We also have clear processes in place
to identify, prevent and manage potential proxy
voting-related conflicts of interest to ensure that in
all cases the firm acts in the clients’ best interest.
Baillie Gifford’s firm-wide conflict of interest
disclosure is available on our website at
bailliegifford.com
Prior to taking any voting action, we usually address
specific ESG concerns by engaging directly with the
company, using voting as an escalation mechanism
if we have not seen sufficient progress. Voting
activity and the reasons for any resolutions voted
against in the period is disclosed on the Company
website and can be viewed at bgusgrowthtrust.com
Company meeting record
Voting distribution
Number of meetings voted
with management
100
Number of meetings with at least
one vote against, withhold or abstain
14
Meetings not voted –
Votes for 92.4%
Votes against 6.6%
Votes abstained 1.0%
Strategic report
Annual Report and Financial Statements 2024
16
Baillie Gifford environmental,
social and governance
engagement
By engaging with companies, we seek to build
constructive relationships with them, to better inform
our investment activities and, where necessary,
effect change within our holdings, ultimately with the
goal of achieving better returns for our shareholders.
The examples on the following pages demonstrate
our stewardship approach through constructive,
ongoing engagement.
Engagements in the year to 31 May 2024 Environmental Social Governance
10X Genomics
Affirm
Alnylam Pharmaceuticals
Amazon
Aurora Innovation
Cloudflare
CoStar Group
Coursera
Guardant Health
HashiCorp
Moderna
Netflix
NVIDIA
Penumbra
Pinterest
Rivian Automotive
Roblox
Roku
Solugen
Shopify
Snowflake
Sprout Social
Sweetgreen
Tesla
The Trade Desk
Watsco
Wayfair
Workday
17
Baillie Gifford US Growth Trust plc
Guardant Health
Objectives
In March 2024, we met with the co-Founders and
co-CEOs of Guardant Health, Helmy Eltoukhy
and AmirAli Talasaz. We wanted to deepen our
relationship with the founders and further explore
their long-term strategy to grow Guardant’s liquid
biopsy business.
Discussions
The discussion was wide ranging. Areas of focus
included: how Guardant could grow the therapy
selection part of the business to expand across the
patient journey, rather than the single point it is used
at today; the company’s international expansion
plans; and the potential scale and opportunity of its
screening business, which could be revolutionary
but is at an early stage. In particular, we explored the
FDA approval pathway for it to become reality.
Outcomes
Overall, we gained a greater understanding of
Guardant’s market opportunity, the approach of the
co-founders, as well as some further insight into
the culture they foster at the company. The meeting
served to deepen our relationship in what we
hope to be a multi-year investment and was thesis
supportive.
Strategic report
Annual Report and Financial Statements 2024
18
Solugen
Objectives
We spent several days visiting Solugen’s headquarters
in Houston, Texas in September 2023. As mentioned
last year, we have an observer board seat at
Solugen, which helps us gain significant insight
into the company’s progress. The purpose of this
visit was to see how this progress is translating
into action on the ground. We were taken on a tour
of various manufacturing facilities by the chief
technical officer and co-founder, Sean Hunt.
Discussions
Sean Hunt showed us much of the original
manufacturing equipment and the control room
for Solugen’s innovative bioforge in Houston.
The bioforge is a biomanufacturing platform to
produce organic acids (used in concrete, cleaning,
agricultural and energy industries) via a novel
technology that leverages enzymes and metal
catalysts. The highly efficient production process
has significantly lower carbon emissions and higher
yield than existing methods of chemical production.
Solugen’s bioforge in Houston has been operating
since 2021. We also visited the bioforge itself and
were taken through the groundbreaking process the
company has developed.
Outcomes
This visit served to enhance our understanding
of Solugen’s processes and potential competitive
advantages as well as confirm its progress in
developing the next generation of sustainable
chemical production. The Houston bioforge is the
proof of concept that helped Solugen to recently
win a contract with the US Department of Energy
to begin construction of a second, larger bioforge
in Marshall, Minnesota.
19
Baillie Gifford US Growth Trust plc
CoStar Group
Objectives
CoStar provides information, analytics and online
marketplaces to the commercial real estate industry
in North America and the UK. The objective of our
meeting in August 2023 was to explore aspects
of sustainability most material to CoStar, namely,
human capital, social issues and data privacy.
Discussions
CoStar balanced people’s needs and the imperative
for growth during our discussion about human
capital and social issues. They believe the answer to
these concerns can be found in people leadership.
The board spends a lot of time on strategy
alongside acquisitions and integrations, while the
head of HR presents to CoStar’s board at least
twice yearly. CoStar also conducted a materiality
assessment several years ago, identifying attrition
and engagement as concerns. They believe they
have addressed some of this as attrition rates have
fallen and engagement scores have subsequently
risen. Data privacy has always been on top of
CoStar’s priority list due to its large dataset,
which is a source of competitive advantage. The
engagement highlighted CoStar’s continued focus
on strengthening its data and cyber security as it
integrates AI further into its business.
Outcomes
Through ongoing discussions with company
leadership, it has become clear that CoStar sees
human capital, social and data privacy issues
as among the most material to the long-term
sustainability of their businesses. We agree.
This was another positive conversation. CoStar
has been proactive in reaching out to us on many
topics, and we invited them to continue to do so.
We will follow CoStar’s progress through future
engagements.
Strategic report
Annual Report and Financial Statements 2024
20
31 May 2024 31 May 2023 % change
Shareholders’ funds
#
£643.9m £568.6m 13.2
Gearing*
5% 6%
Net asset value per ordinary share
‡
216.65p 186.48p 16.2
Share price 192.40p 144.80p 32.9
Comparative index (in sterling terms)
†
24.8
Ongoing charges* 0.70% 0.69%
Discount* 11.2% 22.4%
Active share (relative to S&P 500 Index)* 86% 92%
Number of shares in issue 297,228,700 305,153,700
Market capitalisation £571.9m £441.9m
One year
summary
Year to 31 May 2024 2023
Total returns (%)*
Net asset value 16.2% (2.7%)
Share price 32.9% (13.8%)
Comparative index (in sterling terms)
†
24.8% 4.7%
*
Alternative performance measure – see Glossary of terms and alternative performance measures on pages 124 to 127.
†
S&P 500 Index total return (in sterling terms). See disclaimer on page 120.
#
For a definition of terms see Glossary of terms and alternative performance measures on pages 124 to 127.
‡
Net asset value per share (‘NAV’) with borrowings at fair value. At 31 May 2024 the NAV with borrowings at fair value was the same as the NAV with
borrowings at book value. For a definition of terms see Glossary of terms and alternative performance measures on pages 124 to 127.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 120.
Past performance is not a guide to future performance.
21
Baillie Gifford US Growth Trust plc
Year to 31 May 2024 2024 2023 2023
Year’s high and low High Low High Low
Net asset value per ordinary share
‡
228.97p 176.10p 223.16p 169.35p
Share price 204.00p 135.6p 197.00p 132.80p
Discount* 9.6% 24.5% 9.7% 23.7%
2024 2023
Net return per ordinary share
Revenue (2.07p) (1.55p)
Capital 31.73p (3.56p)
Total
29.66p (5.11p)
*
Alternative performance measure – see Glossary of terms and alternative performance measures on pages 124 to 127.
‡
Net asset value per share (‘NAV’) with borrowings at fair value. At 31 May 2024 the NAV with borrowings at fair value was the same as the NAV with
borrowings at book value. For a definition of terms see Glossary of terms and alternative performance measures on pages 124 to 127.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 120.
Past performance is not a guide to future performance.
Strategic report
Annual Report and Financial Statements 2024
22
Five year
summary
Total return
*
performance
(figures rebased to 100 at 31 May 2019)
The following charts indicate
how an investment in
Baillie Gifford US Growth
has performed relative to its
comparative index and its
underlying net asset value
over the five year period to
31 May 2024.
Premium/(discount)
*
to net asset value
(figures plotted on a monthly basis)
*
Alternative performance measure – see Glossary of terms and alternative performance measures on pages 124 to 127.
†
S&P 500 Index total return (in sterling terms). See disclaimer on page 120.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 120.
Past performance is not a guide to future performance.
2024
2019 2020 2021 2022 2023
Cumulative to 31 May
●
NAV per share (after deducting borrowings at fair value)
●
Share price
●
Comparative index
†
100
300
150
250
200
2024
2019 2020 2021 2022 2023
Years to 31 May
●
Premium/(discount) (after deducting borrowings at fair value)
(25%)
15%
(15%)
5%
(5%)
23
Baillie Gifford US Growth Trust plc
Annual net asset value and share price total return
*
(after deducting borrowings at fair value)
Relative annual net asset value and share price
total return
*
(relative to the comparative index
†
total return)
Active share
*
(compared to the comparative index
†
)
Portfolio turnover
*
(plotted on a quarterly basis)
*
Alternative performance measure – see Glossary of terms and alternative performance measures on pages 124 to 127.
†
S&P 500 Index total return (in sterling terms). See disclaimer on page 120.
Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 120.
Past performance is not a guide to future performance.
2024
2020
2021 2022 2023
Years to 31 May
●
NAV per share return ● Share price return
(50%)
100%
50%
0%
2024
2020
2021 2022 2023
Years to 31 May
●
NAV per share return ● Share price return
(75%)
(50%)
50%
25%
(25%)
0%
2024
2019
2020
2021 2022 2023
Years to 31 May
●
Active share
0%
100%
40%
60%
80%
20%
2024
2019 2020 2021 2022 2023
Years to 31 May
●
Turnover
0%
30%
20%
10%
Strategic report
Annual Report and Financial Statements 2024
24
Summary of results
since inception
*
Capital
At 31 May
Total
assets
£’000
Borrowings
£’000
Shareholders’
funds
£’000
Shareholders’
funds/net
asset value
(book)
per share
p
Net asset
value (fair)
per share
†
p
Share
price
p
Premium/
(discount)
(book)
†
%
Premium/
(discount)
(fair)
†
%
23 March
2018
#
169,466 – 169,466 97.96 97.96 100.50 2.6 2.6
2019 301,830 11,901 289,929 126.17 126.17 129.00 2.2 2.2
2020 490,762 14,560 476,202 181.92 181.92 189.00 3.9 3.9
2021 935,222
26,339
908,883
296.21
296.12
308.00
4.0
4.0
2022 623,860 39,674 584,186 191.44 191.63 168.00 (12.2) (12.3)
2023 608,941 40,342 568,599 186.33 186.48 144.80 (22.3) (22.4)
2024 683,204 39,271 643,933 216.65 216.65 192.40 (11.2) (11.2)
Revenue
Period/year
to 31 May
Income
£’000
Net return
after tax
£’000
Revenue
earnings
per ordinary
share
p
‡
Ongoing
charges
†
%
Gearing
†
%
Gross
gearing
†
%
2019
¶
699 (2,054) (1.09) 0.77 2 4
2020 595 (2,555) (1.05) 0.75 (1) 3
2021 648 (5,066) (1.78) 0.68 1 3
2022 568 (5,781) (1.88) 0.62 6 7
2023 850 (4,718) (1.55) 0.69 6 7
2024 603 (6,282) (2.07) 0.70 5 6
*
For a definition of terms used see Glossary of terms and alternative performance measures on pages 124 to 127.
†
Alternative performance measure. See Glossary of terms and alternative performance measures on pages 124 to 127.
# Close of business on 23 March 2018, launch date and first trade date.
‡ The calculation of revenue earnings per share is based on the revenue from ordinary activities after taxation and the weighted average number of
ordinary shares in issue (see note 7 to the Financial Statements on page 98).
¶ For the period 7 February 2018, date of incorporation of the Company, to 31 May 2019.
Past performance is not a guide to future performance.
Gearing ratios
25
Baillie Gifford US Growth Trust plc
Cumulative performance (taking 23 March 2018 as 100)
At 31 May
Net asset value (fair) total return
†
Share price total return
†
Comparative index total return
§
23 March 2018
#
100 100 100
2019 129 128 122
2020 186 188 141
2021 302 306 172
2022 196 167 193
2023 190 144 202
2024 221 191 252
†
Alternative performance measure. See Glossary of terms and alternative performance measures on pages 124 to 127.
# Close of business on 23 March 2018, launch date and first trade date.
§ S&P 500 Index total return (in sterling terms). Source: LSEG and relevant underlying index providers. See disclaimer on page 120.
Absolute performance
1 year
%
3 years
%
5 years
%
Since inception
#
%
Share price
32.9
(37.5)
49.1
91.4
NAV
‡
16.2 (26.8) 71.7 121.2
Comparative index* 24.8 46.5 106.2 152.0
All figures are stated on a total return basis
†
for the period to 31 May 2024.
*
Comparative index: S&P 500 Index (total return and in sterling terms).
†
Alternative performance measure – see Glossary of terms and alternative performance measures on pages 124 to 127.
# Close of business on 23 March 2018, launch date and first trade date.
‡
Net asset value per share (‘NAV’) with borrowings at fair value. At 31 May 2024 the NAV with borrowings at fair value was the same as the NAV with
borrowings at book value. For a definition of terms see Glossary of terms and alternative performance measures on pages 124 to 127.
Source: Baillie Gifford/LSEG and relevant underlying index providers. See disclaimer on page 120.
Past performance is not a guide to future performance.
Strategic report
Annual Report and Financial Statements 2024
26
Review of
investments
A review of the Company’s
ten largest investments and
additions to the private company
investments as at 31 May 2024.
Space Exploration
Technologies
An aerospace and space
transportation company that
manufactures advanced rockets,
like the Falcon 9, and satellites,
like Starlink, which provides
global broadband services. We are
excited by its pursuit of reduced
launch costs, thus opening
avenues for growth, such as
tourism and transportation. A clear
segment leader, it looks positioned
to capture an attractive share of
the growing space industry, while
Starlink may become the first
globally relevant utility.
NVIDIA
NVIDIA designs and manufactures
graphics processing units for the
gaming and professional markets.
They are highly specialised
semiconductor chips that can be
used for a range of applications,
from gaming to artificial intelligence
(‘AI’). After years of investment
into both hardware and software,
NVIDIA is well positioned to benefit
from the rise of generative AI, as
its chips form the infrastructure
layer to power large language
models. NVIDIA is using its scale to
further reinvest in its opportunity;
designing new hardware to make
data centres more powerful and
energy efficient, while building
software to help companies adopt
AI more quickly.
Valuation at
31 May 2024
£44,715,000
% of total assets* 6.5%
Valuation at
31 May 2023
£24,334,000
% of total assets* 4.0%
Net purchases/(sales)
in the year
(£1,399,000)
Valuation at
31 May 2024
£51,864,000
% of total assets* 7.6%
Valuation at
31 May 2023
£39,220,000
% of total assets* 6.5%
Net purchases/(sales)
in the year
Nil
© Copyright (c) 2022 Nor Gal/Shutterstock© SpaceX
Denotes private company investment.
* Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
Top ten holdings
27
Baillie Gifford US Growth Trust plc
Stripe
Stripe is a payments technology
company. Founded in 2010 by Irish
brothers Patrick and John Collison,
the company is in the process of
developing a platform for sending
money seamlessly and compliantly
between any two internet-
connected nodes in the world.
The company processes massive
volumes of payments from a broad
customer base, ranging from US
start-ups to global giants. Stripe’s
long-term ambition is to make
entrepreneurship easier and thus
significantly increase the amount
of business conducted online.
Amazon
In retail, Amazon competes on
price, selection and convenience
and is improving all three as
it gets bigger. Amazon’s AWS
(Amazon Web Services) division
is in a clear position of leadership
in what could turn out to be one
of the largest and most important
market shifts of our time. Both
opportunities are outputs of what
is perhaps most distinctive of all
about Amazon – its culture. The
company is run with a uniquely
long-term perspective. It is
willing to be bold and scale its
experiments (and failures) as it
grows. These cultural distinctions
allow Amazon to possess the rare
and attractive combination of scale
and immaturity.
The Trade Desk
The advertising industry is
undergoing a wholesale shift. In the
past advertising was bought and
sold in bundles. In the digital world,
advertising can be transacted on
a one-to-one basis, targeting only
the audiences that are relevant.
The Trade Desk provides the
technology that enables this
targeted buying of advertising
through real-time auctions.
This is known as programmatic
advertising. Programmatic
advertising is growing rapidly,
supported by higher efficacy and
a tangible demonstration of return
on investment. We believe that
The Trade Desk will emerge as the
leading buying platform for the
independent internet.
Valuation at
31 May 2024
£34,288,000
% of total assets* 5.0%
Valuation at
31 May 2023
£32,448,000
% of total assets* 5.3%
Net purchases/(sales)
in the year
(£1,040,000)
Valuation at
31 May 2024
£32,007,000
% of total assets* 4.6%
Valuation at
31 May 2023
£25,681,000
% of total assets* 4.2%
Net purchases/(sales)
in the year
Nil
Valuation at
31 May 2024
£35,710,000
% of total assets* 5.2%
Valuation at
31 May 2023
£22,361,000
% of total assets* 3.7%
Net purchases/(sales)
in the year
£3,626,000
© Stripe
Denotes private company investment.
* Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
Strategic report
Annual Report and Financial Statements 2024
28
© DIEGO AZUBEL/EPA-EFE/Shutterstock© Shutterstock / Melnikov Dmitriy
Meta Platforms
Meta Platforms is the owner
of Facebook, WhatsApp and
Instagram. We think that AI could
be a significant growth driver. In
the nearer term, it should facilitate
revenue growth as AI systems
allow adverts to be targeted
more effectively despite Apple’s
privacy restrictions. Facebook
may be unique in having the
engineering resources to take
advantage of this opportunity. The
company addressed its cost base
last year, leaving it well-placed
to take on this challenge. In the
longer term, AI should facilitate
the monetisation of WhatsApp, a
platform that enjoys widespread
usage but has struggled to find a
revenue model.
Moderna
Moderna is a leader in the field
of mRNA therapeutics. mRNA is
a foundational technology that
theoretically has the potential
to induce the production of just
about any protein – human or
non-human – inside our cells. This
versatility opens up a wide range
of therapeutic opportunities for
mRNA. mRNA is in a sense digital,
and is therefore programmable.
In moving from one drug to the
next, the delivery mechanism
and building blocks remain the
same. The only thing that changes
is the code. Because of this,
Moderna’s mRNA platform ought
to be more scalable than past
drug development approaches.
Moderna may have more in
common with a software company
than a biotech business.
Netflix
Netflix has the potential to
become the first truly global
content and distribution media
brand. Its base of more than
230 million subscribers allows
it to invest in building a strong
customer proposition through its
library of exclusive and desirable
content. This in turn attracts more
subscribers, creating a powerful
flywheel that distances itself
from other likely competitors.
The shift from linear TV to on-
demand streaming is still in the
early stages, and Netflix is a prime
beneficiary.
Valuation at
31 May 2024
£23,441,000
% of total assets* 3.4%
Valuation at
31 May 2023
£17,247,000
% of total assets* 2.8%
Net purchases/(sales)
in the year
(£1,588,000)
Valuation at
31 May 2024
£23,506,000
% of total assets* 3.4%
Valuation at
31 May 2023
£21,025,000
% of total assets* 3.5%
Net purchases/(sales)
in the year
£973,000
Valuation at
31 May 2024
£25,369,000
% of total assets* 3.7%
Valuation at
31 May 2023
–
% of total assets* –
Net purchases/(sales)
in the year
£18,391,000
* Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
29
Baillie Gifford US Growth Trust plc
Shopify
Shopify provides software tools
which allow merchants to easily set
up and manage their businesses
across an increasingly complex
and fragmented retail landscape.
Shopify’s software helps to
make merchants more efficient
by automating large swathes of
their operations (e.g. marketing,
inventory management, payments,
order processing, shipping) thus
allowing them to focus on product
market fit. The company maintains
a rapid pace of innovation and is
run by an impressive founder who
has built a distinctive merchant
focused culture.
Brex
Brex is building an all-in-one
platform for businesses to manage
their finances. It started by offering
a corporate card for venture-
backed business. It has expanded
into larger businesses and is now
offering a broader suite of products
including business accounts,
expense management and bill
pay software. Existing options are
expensive and do not work well
with one another. Brex is aiming to
build a fully integrated suite which
will act as the financial operating
system for growing businesses. Its
business model and approach have
demonstrated strong alignment
with its customers, a rarity in
this sector. This customer focus,
coupled with the strength of the
founding team and breadth of their
ambition, leave Brex well placed to
exploit this opportunity.
Valuation at
31 May 2024
£20,666,000
% of total assets* 3.1%
Valuation at
31 May 2023
£15,624,000
% of total assets* 2.6%
Net purchases/(sales)
in the year
Nil
Valuation at
31 May 2024
£21,747,000
% of total assets* 3.1%
Valuation at
31 May 2023
£33,135,000
% of total assets* 5.4%
Net purchases/(sales)
in the year
(£5,042,000)
© NetPhotos/Alamy Stock Photo
Human Interest
Human Interest is a digital
retirement account manager giving
SME employers the ability to offer
employees 401(k) pension and
IRA (individual retirement
account) plans. This is a massively
underserved part of the market
– 50% of American households
have no retirement accounts. The
possibilities of real-time payroll
SaaS (software as a service)
integrations enable automated
and therefore very low cost 401(k)
administration. Human Interest
has become the clear leader in the
space. It has: a large end market;
a rapidly growing product that has
a plausible regulatory tailwind; a
business model that shows clear
signs of operating leverage; and
a decent argument for business
model innovation against the
incumbents.
Valuation at
31 May 2024
£4,713,000
% of total assets* 0.7%
Valuation at
31 May 2023
–
% of total assets* –
Net purchases/(sales)
in the year
£4,658,000
Denotes private company investment.
* Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
Private company new buy
Strategic report
Annual Report and Financial Statements 2024
30
Portfolio executive
summary
Contributors
Contribution to
absolute performance
% *
Absolute
performance
%
†
NVIDIA 6.4 182.7
Space
Exploration
Technologies
2.0 32.2
Amazon 1.9 42.4
Netflix 1.6 58.0
DoorDash 1.4 64.1
Detractors
Contribution to
absolute performance
% *
Absolute
performance
%
†
Convoy (1.3) (100.0)
Novocure (1.0) (80.0)
Denali
Therapeutics
(0.4) (40.2)
Indigo
Agriculture
(0.4) (94.5)
Solugen
(0.4) (19.2)
Key contributors to and detractors from performance – year to 31 May 2024
* Contribution to absolute performance (in sterling terms) has been calculated to illustrate how an individual stock has contributed to the overall return.
It is influenced by both share price performance and the weighting of the stock in the portfolio, taking account of any purchases or sales over the period.
†
Absolute performance (in sterling terms) has been calculated on a total return basis over the period 1 June 2023 to 31 May 2024.
For the definition of total return see Glossary of terms and alternative performance measures on pages 124 to 127. Table ordered by contribution
to performance.
Denotes private company investment.
Source: Revolution.
Distribution of total assets
*
by sector 2024
3
4
5
2
6
1
Industry 2024
%
2023
%
1 Information technology 29.9 31.3
2 Consumer discretionary 19.0 18.8
3 Communication services 15.6 11.7
4 Industrials 12.5 16.2
5 Healthcare 12.1 13.7
6 Financials 6.2 3.9
7 Real estate 1.6 0.3
8 Materials 1.4 2.3
9 Consumer staples 1.0 1.3
10 Net liquid assets 0.7 0.5
Source: Baillie Gifford/LSEG and relevant underlying index providers. See disclaimer on page 120.
* For a definition of terms see Glossary of terms and alternative performance measures on pages 124 to 127.
31
Baillie Gifford US Growth Trust plc
New buys
Block
Guardant Health
Human Interest
Inspire Medical Systems
Insulet
Meta Platforms
Samsara
Sprout Social
YETI Holdings
Amazon
Aurora Innovation
BillionToOne
Cloudflare
Coursera
Databricks
Doximity
Honor Technology
Moderna
Pinterest
Roblox
Sana Biotechnology
Sweetgreen
Additions
10X Genomics
Affirm
Alnylam Pharmaceuticals
Chewy
CoStar Group
Datadog
Denali Therapeutics
DoorDash
Duolingo
Ginkgo Bioworks
HashiCorp
Lemonade
Netflix
NVIDIA
Oddity
Penumbra
Recursion Pharmaceuticals
Rivian Automotive
Roku
Shopify
Snowflake
Tesla
The Trade Desk
Watsco
Wayfair
Workday
ReductionsComplete sales
Convoy
*
Chegg
Illumina
MarketAxess
Novocure
Redfin
Snap
Twilio
Warby Parker
Zoom Video Communications
Assets highlighted in bold indicate an investment decision.
* The Convoy holdings were written off during the period subsequent to the company ceasing operations.
Denotes private company investment.
Denotes listed investment previously held in the portfolio as a private company investment.
Strategic report
Annual Report and Financial Statements 2024
32
This thematic risk analysis is reflective of the Managers’ views. Companies may appear in more than one circle if they are exposed to the same thematic
risk. Figures represent percentage of total investments excluding cash.
Source: Baillie Gifford.
Growth drivers 2024
The illustration below groups companies by the long-term growth drivers identified during investment
research. This is a subjective process, but we believe it is more consistent with our view that the real
risk in the portfolio lies in the growth opportunities identified for individual companies not playing out,
rather than how index providers choose to classify companies.
Capital
Allocators
2.9%
New
Enterprise
17.2%
Evolution of
Transportation
6.3%
Future of
Commerce
22.7%
Change in
Education
2.0%
Innovation
Healthcare
11.8%
Battle for
Our Attention
16.4%
Commercialisation
of Space
7.6%
Digitisation
of Finance
10.8%
Therapies
(Commercial Stage)
4.2%
Therapies
(Development Stage)
0.7%
Data meets
Healthcare
3.4%
Industrialisation
of Biology
1.4%
Devices
3.5%
Watsco
CoStar
YETI
Amazon.com
HashiCorp
Snyk
Workday
PsiQuantum
Tanium
Datadog
Cloudflare
Sprout Social
Samsara
Snowflake
NVIDIA
Databricks
The Trade Desk
Shopify
Wayfair
Workrise
Faire Wholesale
Oddity
Thumbtack
Away (JRSK)
Sweetgreen
Pinterest
Epic Games
Meta
Discord
Netflix
Niantic
Roku
Roblox
Rivian
Nuro
Brex
Block
Solugen
Denali
Therapeutics
Sana
Biotechnology
Moderna
Alnylam
Pharmaceuticals
10x Genomics
Lyra Health
Doximity
Honor
Capsule
Guardant
Perumbra
Insulet
Inspire
Recursion
Pharmaceuticals
Ginkgo
BioWorks
Indigo
Agriculture
Lemonade
Blockstream
Stripe
Human Interest
TeslaAurora
Convoy
Zipline
Coursera
Duolingo
SpaceX
Chewy Airbnb
DoorDash
BillionToOne
33
Baillie Gifford US Growth Trust plc
Strategic report
Annual Report and Financial Statements 2024
34
We hold our private company investments at ‘fair
value’ i.e. the price that would be paid in an open-
market transaction. Valuations are adjusted both
during regular valuation cycles and on an ad hoc
basis in response to ‘trigger events’. Our valuation
process ensures that private companies are valued
in both a fair and timely manner.
The valuation process is overseen by a valuations
group at Baillie Gifford, which takes advice from an
independent third party (S&P Global). The valuations
group is independent from the investment team with
all voting members being from different operational
areas of the firm, and the portfolio managers only
receive final notifications once they have been
applied.
We revalue the private holdings on a three-month
rolling cycle, with one third of the holdings
reassessed each month. During stable market
conditions, and assuming all else is equal, each
investment would be valued four times in a
twelve-month period. For investment trusts,
the prices are also reviewed twice per year by the
respective investment trust boards and are subject
to the scrutiny of external auditors in the annual
audit process.
Beyond the regular cycle, the valuations team also
monitors the portfolio for certain ‘trigger events’.
These may include: changes in fundamentals;
a takeover approach; an intention to carry out an
Initial Public Offering (‘IPO’); company news which
is identified by the valuation team or by the portfolio
managers; or meaningful changes to the valuation of
comparable public companies. Any ad hoc change
to the fair valuation of any holding is implemented
swiftly and reflected in the next published net asset
value.
The valuations group also monitors relevant market
indices on a weekly basis and updates valuations
in a manner consistent with our external valuer’s
(S&P Global) most recent valuation report where
appropriate.
Periods of market volatility during the year have
meant that valuations continue to be reviewed
much more frequently, in some instances resulting
in a further valuation movement. The data below
quantifies the revaluations carried out during the
year to 31 May 2024, but does not reflect the
ongoing monitoring of the private investment
portfolio that has not resulted in a change in
valuation.
Baillie Gifford US Growth Trust*
Instruments held 56
Number of revaluations 288
Percentage of portfolio valued up to 4 times 30.4%
Percentage of portfolio valued 5+ times 69.6%
*
Data reflecting period 1 June 2023 to 31 May 2024 to align with the
Company’s reporting period end.
Whilst pockets of heightened volatility remain,
the general improvement in market sentiment is
reflected in the private company valuations at
31 May 2024. The average movement in company
valuations and share prices across the portfolio
are shown below.
Average
movement
in company
valuation
Average
movement in
share price
Baillie Gifford US Growth Trust* 15.7% 22.2%
*
Data reflecting period 1 June 2023 to 31 May 2024 to align with the
Company’s reporting period end.
Baillie Gifford – valuing
private companies
35
Baillie Gifford US Growth Trust plc
Private companies summary
Historical snapshot
Since our first investment in private companies in 2018, Baillie Gifford US Growth has deployed £242.5m
of capital in this area.
Transaction value
Showing all transactions prior to 31 May 2024 (£’000).
(Graph plotted in calendar years)
Portfolio activity – year to 31 May 2024
£8.2m of new capital was deployed in private companies during the year.
New buys
Human Interest
Oddity listed during the period. Subsequent to Convoy ceasing operations the holdings in it were
written off during the year (see note 9 of the Financial Statements on page 100).
Follow on funding rounds
BillionToOne Databricks
Honor Technology
Concentration
At 31 May 2024 we held 24 private companies which
equated to 34.1% of total assets.
ș Five companies account for 57.3% of the private
company exposure.
ș Ten companies account for 78.1% of the private
company exposure.
All figures stated as percentage of total assets, as at 31 May 2024.
34.1%
Total private company exposure
Top 10 – 26.5%
Top 5 – 19.3%
3 Listed – SPAC
8 Listed
24 Held
1 Liquidated
0
120,000
100,000
80,000
60,000
40,000
20,000
● Buy ● Follow on ● Listed ● Listed-SPAC (special purpose acquisition company)
2018 2019 2020 2021 2022 2023 2024
Strategic report
Annual Report and Financial Statements 2024
36
Performance of listed holdings at 31 May 2024 held previously as private company investments from date of
initial investment of each holding to 31 May 2024
(absolute performance in sterling terms %)
400(100) 0 200100 300
● Absolute performance from initial public offering to 31 May 2024 %
● Absolute performance from initial investment to initial public offering %
● Total absolute performance from initial investment to 31 May 2024 %
Affirm
Airbnb
Ginkgo Bioworks
Aurora
Oddity
Snowflake
3
4
5
2
6
1
Private exposure 31 May 2024
%
31 May 2023
%
1 Space Exploration Technologies 7. 6 6.5
2 Stripe 4.6 4.2
3 Brex 3.1 2.6
4 Zipline 2.1 2.3
5 Faire Wholesale 1.9 2.2
6 Other 14.8 16.7
Source: Revolution/Baillie Gifford.
Note: Absolute performance returns cannot be added together as they are geometric.
37
Baillie Gifford US Growth Trust plc
Size
Our private company exposure tends to be weighted to the upper end
of the maturity curve, focused on late stage private companies which
are scaling up and becoming profitable.
Cap
Total equity
value (USD)
% of total
assets
*
Number of
holdings
Micro <300m 0.5 3
Small 300m–2bn 5.2 7
Medium 2bn–10bn 10.3 9
Large >10bn 18.1 5
34.1 24
Source: Baillie Gifford. Baillie Gifford US Growth private company valuation changes, year to 31 May 2024.
Valuation movements – year to 31 May 2024
Valuation changes %
● Private companies – the bars in the chart above represent individual company valuations
(100)
200
100
150
0
50
(50)
Source: Baillie Gifford.
Private company investments and listed investments previously held as private company investments as
a percentage of total assets
*
(plotted quarterly from March 2018)
£m
20242019 2021 20232018 2020 2022
%
● Private company investments as a % of total assets (right hand axis)
● Total assets in sterling (left hand axis)
● Private company investments and listed investments previously held in the portfolio as private company investments as a % of total assets (right hand axis)
0
1,200
1,000
600
800
200
400
0
50
40
20
30
10
*Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
Strategic report
Annual Report and Financial Statements 2024
38
Operational highlights Financial highlights
ș World record number of launches in a single year
with 96 launches made in 2023.
ș Starlink now has 3 million customers in 99
countries.
ș Starship flight test 4 took place in June 2024
and both the booster and the upper stage ship
completed a successful splashdown.
ș In November 2023, Elon Musk confirmed via X
that Starlink had achieved cash flow breakeven.
The company has ample liquidity to fund the
business over the medium term.
ș In 2023, Stripe passed the milestone of $1
trillion in total payment volume (‘TPV’), up 25%
versus the prior year.
ș At $1 trillion TPV, the output of businesses that
run on Stripe equates to roughly 1% of global
gross domestic product (‘GDP’).
ș Tender offer in March 2024 valued the company
at $65 billion.
ș Fintech company Brex has enhanced its
offerings with features like Auto Transfers for
business accounts, new card management tools,
budget notification options and enhancements
for Brex travel.
ș The company also launched Brex Assistant,
an AI-powered expense management tool,
and announced a new iteration of the Brex
business account with features like AI-powered
accounting in 2024.
ș In January 2024, Brex announced it was
laying off about 20% of its staff in an effort to
innovate and streamline its services amidst a
more challenging economic environment.
ș The changes announced in January 2024
are designed to “make Brex more agile and
accelerate our path to profitability, building on
the growth we had in 2023. We grew our revenue
35%+ in 2023 while gross profit increased by
75%. This reduction in force puts us on a clear
path towards profitability.”
ș “Brex’s financial plan is to be well above cash
flow positive with the current cash we have,
which calls for around 4 years of runway.”
ș Zipline’s drones have now logged 70 million
miles, making more than 1 million deliveries.
ș In early 2023, Zipline unveiled the next
generation platform, dubbed Platform 2
or P2 Zip.
ș In September 2023, Zipline obtained
authorisation from the Federal Aviation
Administration (‘FAA’) to operate ‘beyond
the visual line of sight’ flights.
ș In April 2023, Zipline announced a funding round
raising $330 million at a $4.2 billion post money
valuation – this was a 55% increase from its
2021 round which valued the company at
$2.7 billion.
Top 10 private companies progress – year to 31 May 2024
39
Baillie Gifford US Growth Trust plc
Operational highlights Financial highlights
ș Faire Market, the company’s summer virtual
trade show, was the largest so far. Nearly
53,000 retailers bought stock during the show,
with around 290,000 orders placed. There are
over 100,000 brands on Faire’s platform.
ș Faire is building more tools for its brands and
retailers. It is rolling out analytics tools for its top
brands and has improved its ‘Collections’ tool to
help brands curate their products.
ș The e-commerce platform Shopify invested
in Faire in September 2023. Faire is now the
recommended wholesale marketplace for Shopify
merchants, bringing a huge customer network to
the brands selling via Faire.
ș Faire trimmed its workforce by 20% in November
2023 to operate with a leaner management
structure.
ș In June 2023, Databricks acquired generative
AI company MosaicML for $1.3 billion.
The company will help make generative AI
accessible for all organisations enabling it to
build, own and secure AI models with its own
proprietary data.
ș In March 2024, Databricks and NVIDIA
announced an expanded collaboration
to optimise data and AI workloads on the
Databricks platform (NVIDIA also participated
in the September 2023 funding round).
ș In September 2023, Databricks announced the
closing of its Series I funding round which raised
over $500 million and valued the company at
$43 billion.
ș Financials continue to be impressive – at the end
of July 2023, the company confirmed that it had
crossed $1.5 billion revenue run rate with over
50% year on year growth.
ș As at May 2024 Discord had 200 million
monthly active users (from 152 million in
January 2023), rolling out several speed and
feature improvements.
ș Over 90% of users play games on the platform,
spending a total of 1.5 billion hours gaming
each month.
ș October 2023 saw the company launch an app-
store allowing subscribers to purchase digital
items for their avatar and accounts. Discord
plans to open this new revenue stream to non-
Nitro subscribers.
ș It will also begin inviting eligible developers in the
UK and Europe to share in company revenue by
building apps on top of the platform and letting
users subscribe to them (this is already available
in the US).
Top 10 private companies progress – year to 31 May 2024 (continued)
Strategic report
Annual Report and Financial Statements 2024
40
Operational highlights Financial highlights
ș Over 500,000 people have now received
BillionToOne tests. Its Northstar cancer
screening tests have been available for
patient use since early 2023.
ș Announced a collaboration with Johnson &
Johnson that will see its UNITY tests used as
part of a Johnson & Johnson clinical trial. This
important validation opens up the opportunity
to support more clinical trials.
ș Annual recurring revenue has grown to
$125 million, from zero four years ago.
ș As of May 2024, Lyra, the leading provider of
innovative Workforce Mental Health solutions
for employers, had more than 300 companies
partnered to offer Lyra’s mental health benefits
to their employees, giving 15 million people
access to this care.
ș In May 2024, a four-year independent study
from AON showed that employers offering
Lyra’s workforce mental health solutions saw an
average annual health care cost reduction of
26%, sustained consistently over four years.
ș As of May 2024, Lyra has raised a total of
$907 million, with the last funding round being
a $235 million round in January 2022.
ș In April 2024, Solugen broke ground on its
new biomanufacturing facility in Minnesota –
‘Bioforge Marshall’.
ș Solugen’s first commercial production plan
‘Bioforge Houston’ opened in 2021 and it
has demonstrated an over 80% reduction
in greenhouse gas emissions compared to
conventional petroleum-based methods.
Bioforge Marshall will be six times the size
of Bioforge Houston and aims to produce
bio-based chemical products for use in
wastewater treatment, construction,
agriculture and energy sectors.
ș In August 2023 CEO Gaurab Chakrabarti noted
Solugen’s Houston facilities were producing
over 10,000 tons of chemicals per year,
removing more carbon from the environment
than they put in.
ș In August 2023 Chakrabati noted its
10,000 gallon Bioforge Houston “can
produce the chemicals at enormous
volumes, and do so profitably.”
ș Solugen secured a $214 million loan from
the Department of Energy to support the
construction of Bioforge Marshall.
Top 10 private companies progress – year to 31 May 2024 (continued)
41
Baillie Gifford US Growth Trust plc
List of investments
as at 31 May 2024
Name
Business
2024
Value
£’000
% of
total
assets*
2023
Value
£’000
Space Exploration Technologies
Series J Preferred
Rocket and spacecraft company 26,502 3.9 20,041
Space Exploration Technologies
Series N Preferred
Rocket and spacecraft company 15,214 2.2 11,505
Space Exploration Technologies
Series K Preferred
Rocket and spacecraft company 6,040 0.9 4,568
Space Exploration Technologies
Class A Common
Rocket and spacecraft company 3,139 0.5 2,374
Space Exploration Technologies
Class C Common
Rocket and spacecraft company 969 0.1 732
51,864 7. 6 39,220
NVIDIA Graphics chips 44,715 6.5 24,334
Amazon Online retailer and cloud computing provider 35,710 5.2 22,361
The Trade Desk Advertising technology company 34,288 5.0 32,448
Stripe Series G Preferred
Online payment platform 13,984 2.0 11,110
Stripe Series I Preferred
Online payment platform 13,625 2.0 10,860
Stripe Class B Common
Online payment platform 2,871 0.4 2,281
Stripe Series H Preferred
Online payment platform 1,527 0.2 1,430
32,007 4.6 25,681
Meta Platforms Social networking websites 25,369 3.7 –
Moderna Therapeutic messenger RNA 23,506 3.4 21,025
Netflix Subscription service for TV shows and movies 23,441 3.4 17,247
Shopify Cloud-based commerce platform provider 21,747 3.1 33,135
Brex Class B Common
Corporate credit cards for start-ups 10,648 1.6 8,050
Brex Series D Preferred
Corporate credit cards for start-ups 10,018 1.5 7,574
20,666 3.1 15,624
DoorDash Online local delivery 17,845 2.6 11,482
Tesla Electric cars, autonomous driving and solar energy 17,239 2.4 24,967
Zipline International Series C Preferred
Drone-based medical delivery 8,910 1.3 8,771
Zipline International Series E Preferred
Drone-based medical delivery 5,049 0.7 4,970
Zipline International Series F Preferred
Drone-based medical delivery 820 0.1 807
14,779 2.1 14,548
*
Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
Denotes private company investment.
Denotes listed investment previously held in the portfolio as a private company investment.
Past performance is not a guide to future performance.
Strategic report
Annual Report and Financial Statements 2024
42
* Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
Denotes private company investment.
Denotes listed investment previously held in the portfolio as a private company investment.
Past performance is not a guide to future performance.
Name
Business
2024
Value
£’000
% of
total
assets*
2023
Value
£’000
Cloudflare Cloud-based provider of network services 13,357 1.9 12,589
Faire Wholesale Series F Preferred
Online wholesale marketplace 4,972 0.7 5,114
Faire Wholesale
Online wholesale marketplace 4,429 0.6 4,546
Faire Wholesale Series G Preferred
Online wholesale marketplace 3,684 0.6 3,789
13,085 1.9 13,449
Workday Enterprise information technology 12,450 1.8 13,548
Pinterest Image sharing and social media company 12,273 1.8 5,698
Databricks Series H Preferred
Data and AI platform 11,647 1.7 7,974
Databricks Series I Preferred
Data and AI platform 435 0.1 –
12,082 1.8 7,974
CoStar Group Commercial property information provider 10,776 1.6 15,817
Duolingo Mobile learning platform 10,743 1.6 11,944
Watsco Air conditioning, heating and refrigeration
equipment distributor
10,611 1.5 11,076
Discord Series I Preferred
Communication software 9,448 1.4 11,006
Sweetgreen Salad fast food chain 9,370 1.4 1,212
BillionToOne Series C Preferred
Molecular diagnostics technology platform 3,984 0.6 3,438
BillionToOne Series D Preferred
Molecular diagnostics technology platform 2,749 0.4 –
BillionToOne Series C-1 Preferred
Molecular diagnostics technology platform 2,533 0.4 –
9,266 1.4 3,438
Lyra Health Series E Preferred
Digital mental health platform for enterprises 7,136 1.1 6,688
Lyra Health Series F Preferred
Digital mental health platform for enterprises 1,664 0.2 1,591
8,800 1.3 8,279
Datadog IT monitoring and analytics platform 8,768 1.3 8,193
Solugen Series C-1 Preferred
Combines enzymes and metal catalysts
to make chemicals
5,821 0.9 7,257
Solugen Series D Preferred
Combines enzymes and metal catalysts
to make chemicals
2,827 0.4 3,487
8,648 1.3 10,744
Snyk Series F Preferred
Developer security software 5,055 0.8 4,061
Snyk Ordinary Shares
Developer security software 3,016 0.4 2,424
8,071 1.2 6,485
Affirm Class B
Consumer finance 4,543 0.7 2,373
Affirm
Consumer finance 3,477 0.5 2,116
8,020 1.2 4,489
Oddity
Online cosmetics and skincare company 7,072 1.0 5,648
Roblox User generated content game company 6,900 1.0 8,115
Epic Games
Video game platform and software developer 6,741 1.0 6,060
Wayfair Online furniture and homeware retailer 6,552 0.9 4,831
Block Financial services merchant and mobile
payment company
6,127 0.9 –
Inspire Medical Systems Medical technology company 6,054 0.9 –
43
Baillie Gifford US Growth Trust plc
Name
Business
2024
Value
£’000
% of
total
assets*
2023
Value
£’000
Snowflake
Developer of a SaaS-based cloud data warehousing
platform
5,771 0.8 7,598
Insulet Medical device company 5,736 0.8 –
Samsara Connected operations cloud software company 5,430 0.8 –
Alnylam Pharmaceuticals Therapeutic gene silencing 5,248 0.8 11,066
Human Interest Series E Preferred
Retirement benefits platform 4,713 0.7 –
Human Interest Warrants for
Series E/E-1
Retirement benefits platform – – –
4,713 0.7 –
Guardant Health Biotechnology company 4,645 0.7 –
Tanium Class B Common
Online security management 4,548 0.7 3,814
Roku Online media player 4,451 0.7 4,895
Nuro Series C Preferred
Self-driving vehicles for local delivery 2,509 0.4 2,040
Nuro Series D Preferred
Self-driving vehicles for local delivery 1,939 0.3 1,645
4,448 0.7 3,685
HashiCorp Open source infrastructure software 4,360 0.6 4,709
Workrise Technologies
Series E Preferred
Jobs marketplace for the energy sector 1,975 0.3 2,741
Workrise Technologies
Series D Preferred
Jobs marketplace for the energy sector 1,895 0.3 2,662
Workrise Technologies
Series D-1 Preferred
Jobs marketplace for the energy sector 421 <0.1 592
4,291 0.6 5,995
Chewy Online pet supplies retailer 4,084 0.6 6,168
Thumbtack Class A Common
Online directory service for local businesses 2,437 0.4 810
Thumbtack Series I Preferred
Online directory service for local businesses 1,293 0.2 1,113
Thumbtack Series A Preferred
Online directory service for local businesses 174 <0.1 58
Thumbtack Series C Preferred
Online directory service for local businesses 51 <0.1 17
Thumbtack Series B Preferred
Online directory service for local businesses 12 <0.1 4
3,967 0.6 2,002
PsiQuantum
Series D Preferred
Silicon photonic quantum computing 3,872 0.6 3,535
YETI Holdings Consumer products for the outdoor and recreation
markets
3,726 0.6 –
Airbnb Class B Common
Online market place for travel accommodation 3,501 0.6 2,725
Away (JRSK) Series D Preferred
Travel and lifestyle brand 1,072 0.2 1,698
Away (JRSK) Convertible
Promissory Note
Travel and lifestyle brand 1,039 0.2 1,075
Away (JRSK) Convertible
Promissory Note 2021
Travel and lifestyle brand 1,039 0.2 1,075
Away (JRSK) Series Seed Preferred
Travel and lifestyle brand 234 <0.1 1,165
3,384 0.6 5,013
Denali Therapeutics Clinical stage neurodegeneration company 3,321 0.5 5,803
Penumbra Medical tools to treat vascular diseases 3,178 0.5 5,696
*
Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
Denotes private company investment.
Denotes listed investment previously held in the portfolio as a private company investment.
Past performance is not a guide to future performance.
Strategic report
Annual Report and Financial Statements 2024
44
Name
Business
2024
Value
£’000
% of
total
assets*
2023
Value
£’000
Doximity Social network and digital workflow tools for
medical professionals
3,136 0.5 2,680
Niantic Series C Preferred
Augmented reality games 3,026 0.4 2,608
Aurora Innovation
Self-driving technology 1,668 0.2 368
Aurora Innovation Class B Common
Self-driving technology 1,317 0.2 785
2,985 0.4 1,153
Coursera Online educational services provider 2,842 0.4 4,176
Sprout Social Social media management firm 2,777 0.4 –
Lemonade Insurance company 2,068 0.3 2,335
Recursion Pharmaceuticals Drug discovery platform 1,891 0.3 2,111
Honor Technology Series D Preferred
Home care provider 1,158 0.2 609
Honor Technology Series E Preferred
Home care provider 502 0.1 264
Honor Technology Subordinated
Convertible Promissory Note
Home care provider 198 <0.1 –
1,858 0.3 873
10X Genomics Single cell sequencing company 1,714 0.3 4,361
Capsule Series 1-D Preferred
Digital pharmacy 824 0.1 1,305
Capsule Series E Preferred
Digital pharmacy 509 0.1 807
1,333 0.2 2,112
Sana Biotechnology Gene editing technology 1,239 0.2 929
Rivian Automotive Electric vehicle manufacturer 1,078 0.2 1,560
Ginkgo Bioworks
Bioengineering company developing micro organisms
that produce various proteins
930 0.1 2,946
Blockstream Series B-1 Preferred
Bitcoin and digital asset infrastructure 163 <0.1 1,140
Indigo Agriculture Class A Common
Agricultural technology company 130 <0.1 2,375
Abiomed CVR
Manufacturer of heart pumps – – –
Total investments 678,234 99.3
Net liquid assets† 4,970 0.7
Total assets* 683,204 100.0
*
Total assets less current liabilities, before deduction of borrowings. See Glossary of terms and alternative performance measures on pages 124 to 127.
†
See Glossary of terms and alternative performance measures on pages 124 to 127.
#
Includes holdings in ordinary shares, preference shares and convertible promissory notes.
Denotes private company investment.
Denotes listed investment previously held in the portfolio as a private company investment.
Past performance is not a guide to future performance.
Listed
equities
%
Private
company
investments
#
%
Net liquid
assets †
%
Total
assets *
%
31 May 2024
65.2 34.1 0.7 100.0
31 May 2023
65.0 34.5 0.5 100.0
45
Baillie Gifford US Growth Trust plc
Business
review
Business model
Business and status
Baillie Gifford US Growth Trust plc is a public
company limited by shares and is incorporated in
England and Wales. The Company is an investment
company within the meaning of section 833 of the
Companies Act 2006 and carries on business as an
investment trust. Investment trusts are UK public
listed companies and their shares are traded on the
London Stock Exchange. They invest
in a portfolio of assets in order to spread risk.
The Company has a fixed share capital although,
subject to shareholder approval, it may purchase
its own shares or issue shares. The price of the
Company’s shares is determined, like other
listed shares, by supply and demand.
The Company has been approved as an investment
trust by HM Revenue & Customs subject to the
Company continuing to meet the eligibility
conditions. The Directors are of the opinion
that the Company has continued to conduct
its affairs so as to enable it to comply with the
ongoing requirements of section 1158 of the
Corporation Tax Act 2010 and the Investment Trust
(Approved Company) (Tax) Regulations 2011.
The Company is an Alternative Investment
Fund for the purposes of the UK Alternative
Investment Fund Managers Regulations.
Purpose
Baillie Gifford US Growth aims to deliver above
average long-term returns for shareholders by
keeping fees and costs low and harnessing the
long-term growth potential of companies.
Objective and policy
The Company’s investment objective is to produce
long-term capital growth.
The Company invests predominantly in equities of
companies which are incorporated or domiciled, or
which conduct a significant portion of their business,
in the United States and which the Company
believes have the potential to grow substantially
faster than the average company over the long
term. Such investment is typically direct, but may
be indirect, including through investment in funds.
The maximum direct investment in any one company
or fund is limited to 10% of the Company’s total
assets measured at the time of investment.
The portfolio consists of direct holdings in listed
securities and unlisted securities in up to a combined
maximum of 90 companies or funds, typically with
30 or more listed security holdings. The maximum
amount which may be invested directly in unlisted
securities shall not exceed 50% of the total assets
of the Company, measured at the time of investment.
The Company will at all times be invested in several
sectors. While there are no specific limits placed
on exposure to any one sector, the Company will
at all times invest and manage the portfolio in a
manner consistent with spreading investment risk.
With prior approval of the Board, the Company
may use derivatives for the purposes of efficient
portfolio management (in order to reduce,
transfer or eliminate investment risk in the
Company’s portfolio). Derivative instruments
in which the Company may invest may include
foreign exchange forwards, exchange-listed
and over-the-counter options, futures, options
on futures, swaps and similar instruments. The
Board, however, currently does not expect to
enter into derivative or hedging transactions to
mitigate against currency or interest rate risk.
Strategic report
Annual Report and Financial Statements 2024
46
The Board intends to employ gearing in the
normal course of events. The Company may in
aggregate borrow amounts equalling up to 30%
of the net asset value of the listed securities
held by the Company, calculated at the time
of drawdown, although the Board expects that
borrowings will typically represent an amount in
the range of 10% to 20% of the net asset value
of the listed securities held by the Company.
While it is intended that the Company will be fully
invested in normal market conditions, the Company
may hold cash on deposit or invest on a temporary
basis in a range of cash equivalent instruments.
The Board does not expect that the Company will
hold cash or cash equivalent instruments, but there
is no restriction on the amount of cash or cash
equivalent instruments that the Company may hold.
Culture and values
In the context of a company with no employees,
culture and values are expressed by the Company’s
Directors and the service providers with whom
shareholders and other stakeholders interact, and
through the relationships between the Board and
those service providers, including the Managers.
As noted in more detail in the section 172 statement
on pages 53 to 56, the Board seeks to engage
with its Managers and other service providers in a
collaborative and collegiate manner, and to maintain
the highest standards of business conduct.
Dividend policy
The Company’s priority is to produce capital growth
over the long term. The Company therefore has
no dividend target and will not seek to provide
shareholders with a particular level of distribution.
However, the Company intends to comply with
the requirements for maintaining investment trust
status for the purposes of section 1158 of the UK
Corporation Tax Act 2010 regarding distributable
income. The Company will therefore distribute as a
final dividend amounts such that it does not retain,
in respect of an accounting period, an amount
greater than 15% of its income (as calculated for
UK tax purposes) for that period. As the revenue
account is again running at a deficit, the Board is
recommending that no final dividend be paid.
Liquidity policy
The Board recognises the need to address any
sustained and significant imbalance of buyers and
sellers which might otherwise lead to shares trading
at a material discount or premium to net asset value
per share. While it has not adopted any formal
discount or premium targets which would dictate
the point at which the Company would seek to
purchase shares or issue further shares, the Board is
committed to utilising its share purchase and share
issuance authorities where appropriate in such a way
as to mitigate the effects of any such imbalance. In
considering whether buy-back or issuance might be
appropriate in any particular set of circumstances, the
Board will take into account, inter alia: the prevailing
market conditions; whether the discount is substantial
relative to the Company’s peers; the degree of net
asset value accretion that will result from the buy-
back or issuance; the cash resources readily available
to the Company; the immediate pipeline of investment
opportunities open to the Company; the level of the
Company’s existing borrowings; and the working
capital requirements of the Company. The Board will
continue to monitor the discount and the application
of the liquidity policy and will amend the approach to
discount management in response to the prevailing
market conditions and other factors noted above.
The Board will keep shareholders appraised, on
a regular and ongoing basis, of the approach
which it has adopted in implementing this
liquidity policy, principally through commentary
in its Annual and Interim reports.
Share buy-backs – at the Annual General Meeting
held on 18 September 2023 the Company was
granted a general authority to make purchases
of up to 45,742,539 shares, being approximately
14.99% of the issued ordinary share capital as
at 4 August 2023. This authority expires at the
forthcoming Annual General Meeting. In exercising
the Company’s power to buy back shares, the
Board has complete discretion as to the timing,
price and volume of shares so purchased. If the
Company does purchase its own shares it may hold
them in treasury rather than purchase them for
cancellation. Shares may only be sold from treasury
at a price which, after costs, is not less than the
net asset value per share at the relevant time.
All share repurchases are conducted in accordance
with the Companies Act 2006 and the UK Listing
Rules applicable to closed-ended investment funds
from time to time and are announced to the market
via a Regulatory Information System on the same
or the following business day.
47
Baillie Gifford US Growth Trust plc
7,925,000 were bought back during the year under
review. At 31 May 2024 10,131,300 shares were
held in treasury. Between 1 June 2024 and 16
August 2024 1,950,000 shares were bought back.
The Directors are seeking shareholders’ approval
at the Annual General Meeting to renew the
authority to purchase up to 14.99% of the ordinary
shares in issue as at 16 August 2024 (being the
latest practicable date prior to the publication of
this document) or, if less, up to 14.99% of the
ordinary shares in issue (excluding treasury shares)
on the date on which the authority is granted,
such authority to expire at the date of the Annual
General Meeting in 2025. Such purchases will only
be made at a discount to the prevailing net asset
value. Any such shares which are bought back
may be held in treasury and may subsequently
then either be sold for cash or cancelled.
Share issuance – the Directors will again be seeking
authorities at the forthcoming Annual General
Meeting for issuance and disapplication of pre-
emption rights to sell any shares held in treasury
and allot new shares at a premium to the net asset
value per share with debt valued at fair value.
These authorities will expire at the conclusion of
the 2025 Annual General Meeting or on the expiry
of 15 months from the passing of the resolutions,
whichever is earlier. Should shareholder approval
be granted it will allow the Directors to issue new
ordinary shares at a premium to net asset value
or C shares convertible into ordinary shares, in
order to satisfy investor demand over the year
should the Company be in a position to do so.
No new ordinary shares will be issued at a price
which (after costs and expenses) is less than the
net asset value per existing ordinary share at the
time of the issue of the new shares, unless the new
shares are first offered pro-rata to shareholders
on a pre-emptive basis. C shares will be issued at
a price of £1 per C share. As mentioned above,
the Company has the authority to raise further
funds through the issue of C shares rather than
ordinary shares. C shares are designed to overcome
the potential disadvantages that may arise out
of a fixed price issue of further shares for cash.
These disadvantages relate primarily to the effect
that an injection of substantial uninvested cash
may have on the net asset value per ordinary
share performance of an otherwise fully invested
portfolio (commonly referred to as ‘cash drag’).
During the year to 31 May 2024 the Company
issued no shares. Between 1 June 2024 and
16 August 2024 no shares were issued.
Borrowings
Borrowings are typically invested in securities when
it is considered that investment grounds merit the
Company taking a geared position to securities.
Gearing levels, and the extent of equity gearing, are
discussed by the Board and Managers at every Board
meeting. The Managers are tasked with ensuring
that gearing is managed efficiently and within the
parameters set by the Board and any loan covenants.
Facility
amount
Facility
type Lender Maturing Drawings
$25
million
Revolving
credit
ING Bank N.V. 31 July 2026 Fully
drawn
$25
million
Revolving
credit
The Royal
Bank of
Scotland
International
Limited
18 October
2026
Fully
drawn
Performance
At each Board meeting, the Directors consider a
number of performance measures to assess the
Company’s success in achieving its objectives.
Key performance indicators
The key performance indicators (‘KPIs’) used
to measure the progress and performance
of the Company over time are established
industry measures and are as follows:
ș the movement in the net asset value per ordinary
share;
ș the movement in the share price;
ș performance compared to the comparative
index;
ș the premium/discount of the share price to the
net asset value per share; and
ș the ongoing charges ratio.
An explanation of these measures can be found in
the Glossary of terms and alternative performance
measures on pages 124 to 127.
The KPIs for the year to 31 May 2024 and since
inception, 28 March 2018, are shown on pages
20 to 25.
In addition to the above, the Board considers peer
group comparative performance.
Strategic report
Annual Report and Financial Statements 2024
48
Decreasing RiskIncreasing Risk No Change
Value assessment
Baillie Gifford & Co Limited undertakes regular value assessments of its products. Following the
assessment in 2024, it was concluded that the Company was expected to provide fair value for a
reasonably foreseeable period.
Principal and emerging risks
As explained on pages 70 and 71 there is an ongoing process for identifying, evaluating and managing the
risks faced by the Company on a regular basis. The Directors have carried out a robust assessment of the
principal and emerging risks facing the Company, including those that would threaten its business model,
future performance, regulatory compliance, solvency or liquidity. There have been no material changes to
the principal risks during the year. A description of these risks and how they are being managed or mitigated
is set out below.
The Board considers the heightened macroeconomic and geopolitical concerns to be factors which
exacerbate existing risks, rather than discrete risks, within the context of an investment trust.
Their impact is considered within the relevant risks.
Financial
risk
What is the risk?
The Company’s assets consist
mainly of listed securities and
its principal financial risks are
therefore market related and
include market risk (comprising
currency risk, interest rate
risk and other price risk),
liquidity risk and credit risk.
An explanation of those risks
and how they are managed
is contained in note 17 to the
Financial Statements on pages
104 to 111.
How is it managed?
The Board has, in particular,
considered the impact of
heightened market volatility
during recent months due to
macroeconomic factors such as
higher inflation, interest
rates and geopolitical concerns.
To mitigate this risk the Board
considers at each meeting various
portfolio metrics including
individual stock performance and
weightings, the top and bottom
contributors to performance,
purchases and sales of
investments and relative sector
weightings against the
comparative index. The portfolio
managers provide their rationale
for stock selection decisions. A
comprehensive strategy meeting
is held annually to facilitate
challenge of the Company’s
strategy. The value of the
Company’s investment portfolio
would be affected by any impact,
positively or negatively, on sterling
but such impact would be partially
offset by the effect of exchange
rate movements on the Company’s
dollar denominated borrowings.
Current assessment of risk
This risk is considered to
be high but unchanged
as a result of heightened
macroeconomic and
geopolitical concerns
which continue to create
a challenging environment
for businesses, but with
some signs that interest rate
pressures, for example, may
be starting to recede.
49
Baillie Gifford US Growth Trust plc
Decreasing RiskIncreasing Risk No Change
Private
company
investment
risk
What is the risk?
The Company’s liquidity risk
could be increased by its
investment in private company
securities. These assets may
be more difficult to buy or
sell, so changes in their prices
may be greater than for listed
investments.
How is it managed?
To mitigate this risk, the Board
considers the private company
securities in the context of the
overall investment strategy and
provides guidance to the Managers
on the maximum exposure to
private company securities. The
investment policy limits the amount
which may be invested in private
company securities to 50% of
the total assets of the Company in
aggregate, measured at the time
of investment.
Current assessment of risk
There has been no significant
change to the number of
private company investments
during the period. At 31
May 2024, private company
investments comprised
34.1% of total assets.
Investment
strategy risk
What is the risk?
Pursuit of an investment
strategy to fulfil the Company’s
objective which the market
perceives to be unattractive or
inappropriate, or the ineffective
implementation of an attractive
or appropriate strategy, may
lead to reduced returns for
shareholders and, as a result,
a decreased demand for the
Company’s shares. This may
lead to the Company’s shares
trading at a wide discount to
their net asset value.
How is it managed?
To mitigate this risk, the Board
regularly reviews and monitors
the Company’s objective and
investment policy and strategy,
the investment portfolio and
its performance, the level of
discount/premium to net asset
value at which the shares trade
and movements in the share
register and raises any matters
of concern with the Managers.
Current assessment of risk
This risk is considered to
be stable as there are signs
that the market’s appetite for
growth stocks, typically held
by the Company, is recovering
following the recent period of
heightened macroeconomic
and geopolitical concerns.
Environmental
social and
governance
risk
What is the risk?
Perceived problems on
environmental, social and
governance (‘ESG’) matters
in an investee company
could lead to that company’s
shares being less attractive to
investors, adversely affecting
its share price, in addition
to potential valuation issues
arising from any direct impact
of the failure to address
the ESG weakness on the
operations or management
of the investee company
(for example a failure to
identify a pathway to Net
Zero or poor employment
practices). Repeated failure
by the Managers to identify
ESG weaknesses in investee
companies could lead to the
Company’s own shares being
less attractive to investors,
adversely affecting its own
share price.
How is it managed?
This is mitigated by the Managers’
strong ESG stewardship and
engagement policies which are
available to view on the Managers’
website, bailliegifford.com, and
which have been reviewed and
endorsed by the Company, and
which have been fully integrated
into the investment process as
well as the extensive up-front
and ongoing due diligence which
the Managers undertake on each
investee company. Due diligence
includes assessment of the risks
inherent in climate change as well
as ongoing positive engagement
on ESG-related issues (see pages
17 to 19).
Current assessment of risk
The Managers continue
to embed analysis of ESG
factors within the investment
process. Although climate
activists have recently
targeted the Managers’
sponsorship of cultural
events, media coverage
has been balanced and
has largely recognised
that the objective is not
to seek perfection but to
focus on materiality and
the direction of travel, with
the understanding that
engagement can encourage
responsibility and meaningful
change.
Strategic report
Annual Report and Financial Statements 2024
50
Decreasing RiskIncreasing Risk No Change
Discount
risk
What is the risk?
The discount/premium at
which the Company’s shares
trade relative to its net asset
value can change. The risk
of a wide discount is that
it may undermine investor
confidence in the Company and
shareholders selling their shares
will get less than the net asset
value of those shares.
How is it managed?
To manage this risk, the
Board monitors the level of
discount/premium at which the
shares trade and the Company
has authority to buy back its
existing shares, when deemed
by the Board to be in the best
interests of the Company and
its shareholders. The liquidity
policy is set out on page 46.
Current assessment of risk
The Company’s discount
narrowed during the year.
Over the year to 31 May 2024
the Company bought back
7,925,000 shares to be
held in treasury. The Board
continues to monitor closely
the discount and the impact
of the current liquidity policy
being applied.
Regulatory
risk
What is the risk?
Failure to comply with
applicable legal and regulatory
requirements such as the
tax rules for investment trust
companies, the UK Listing
Rules and the Companies Act
could lead to suspension of the
Company’s Stock Exchange
listing, financial penalties, a
qualified audit report or the
Company being subject to tax
on capital gains.
How is it managed?
To mitigate this risk,
Baillie Gifford’s Business Risk,
Internal Audit and Compliance
departments provide regular
reports to the Audit Committee
on Baillie Gifford’s monitoring
programmes. Major regulatory
change could impose
disproportionate compliance
burdens on the Company. In such
circumstances representation is
made to ensure that the special
circumstances of investment
trusts are recognised. Shareholder
documents and announcements,
including the Company’s published
Interim and Annual Report and
Financial Statements, are subject
to stringent review processes and
procedures are in place to ensure
adherence to the Transparency
Directive and the Market Abuse
Directive with reference to inside
information.
Current assessment of risk
All control procedures are
working effectively. There
have been no material
regulatory changes that
impacted the Company
during the year.
Custody and
Depositary
risk
What is the risk?
Safe custody of the Company’s
assets may be compromised
through control failures by the
Depositary, including breaches
of cyber security.
How is it managed?
To mitigate this risk, the Audit
Committee receives six-monthly
reports from the Depositary
confirming safe custody of the
Company’s assets held by the
Custodian. Cash and portfolio
holdings are independently
reconciled to the Custodian’s
records by the Managers who
also agree uncertificated private
portfolio holdings to confirmations
from investee companies. The
Custodian’s assured internal
controls reports are reviewed
by Baillie Gifford’s Business Risk
department and a summary
of the key points is reported
to the Audit Committee and
any concerns investigated.
Current assessment of risk
All control procedures are
working effectively.
51
Baillie Gifford US Growth Trust plc
Decreasing RiskIncreasing Risk No Change
Operational
risk
What is the risk?
Failure of Baillie Gifford’s
systems or those of other
third party service providers
could lead to an inability to
provide accurate reporting
and monitoring or a
misappropriation of assets.
How is it managed?
To mitigate this risk, Baillie Gifford
has a comprehensive business
continuity plan which facilitates
continued operation of the
business in the event of a service
disruption. The Audit Committee
reviews Baillie Gifford’s Report
on Internal Controls and reports
by other key third party providers
are reviewed by Baillie Gifford
on behalf of the Board and a
summary of the key points is
reported to the Audit Committee
and any concerns investigated.
Current assessment of risk
All control procedures
are working effectively.
The other key third party
service providers have not
experienced significant
operational difficulties
affecting their respective
services to the Company.
Cyber
security risk
What is the risk?
A cyber attack on Baillie Gifford’s
network or that of a third party
service provider could impact
the confidentiality, integrity or
availability of data and systems.
How is it managed?
To mitigate this risk, the Audit
Committee reviews reports on
Internal Controls published
by Baillie Gifford and other
third party service providers.
Baillie Gifford’s Business Risk
department reports to the Audit
Committee on the effectiveness
of information security controls
in place at Baillie Gifford and its
business continuity framework.
Cyber security due diligence
is performed by Baillie Gifford
on third party service providers
which includes a review of crisis
management and business
continuity frameworks.
Current assessment of risk
This risk is seen as increasing
due to recent indications
that the continuation of
geopolitical tensions could
lead to cyber attacks.
Emerging technologies,
including AI, could potentially
increase information security
risks.
Strategic report
Annual Report and Financial Statements 2024
52
Decreasing RiskIncreasing Risk No Change
Leverage risk
What is the risk?
The Company may borrow
money for investment purposes.
If the investments fall in value,
any borrowings will magnify
the impact of this loss. If
borrowing facilities are not
renewed, the Company may
have to sell investments
to repay borrowings. The
Company can also make use of
derivative contracts. The use
of such contracts may have a
gearing effect so as to enhance,
or worsen, returns relative to
the amount invested in this way.
How is it managed?
To mitigate this risk, all borrowings
require the prior approval of
the Board and leverage levels
are discussed by the Board and
Managers at every meeting.
Covenant levels are monitored
regularly. The majority of the
Company’s investments are in
quoted securities that are readily
realisable. Further information
on leverage can be found on
page 119 and the Glossary of
terms and alternative performance
measures on pages 124 to 127.
Current assessment of risk
No significant change in
risk level. The Company
refinanced its existing loan
facilities with revolving credit
facilities during the period.
Political and
associated
economic risk
What is the risk?
The Board is of the view that
political change in areas in
which the Company invests or
may invest may have financial
consequences for the Company.
How is it managed?
Political developments are closely
monitored and considered by the
Board. The Board has particular
regard to macroeconomic and
geopolitical tensions, and
monitors portfolio diversification.
Current assessment of risk
This risk is increasing as
governments and consumers
around the world continue
to assess the impact of
heightened geopolitical
tensions and conflicts
as well as challenging
macroeconomic conditions.
Emerging risk
As explained on pages 70 and 71 the Board has regular discussions on principal risks and uncertainties,
including any risks which are not an immediate threat but could arise in the longer term. The Board considers
that the key emerging risks arise from the interconnectedness of global economies and the related exposure
of the investment portfolio to external and emerging threats such as the societal and financial implications of
escalating geopolitical tensions, cyber security risks including developing AI and quantum computing
capabilities and new infectious diseases or similar public health threats. This is mitigated by the Managers’
close links to the investee companies and their ability to ask questions on contingency plans. The Managers
believe the impact of such events may be to slow growth rather than to invalidate the investment rationale
over the long term.
53
Baillie Gifford US Growth Trust plc
Viability statement
Having regard to provision 31 of the UK Corporate
Governance Code, the Directors have assessed
the prospects of the Company over a five year
period. The Directors continue to consider
this period to be appropriate, as it is reflective
of the longer-term investment strategy of the
Company, and to be a period during which, in the
absence of any adverse change to the regulatory
environment and to the favourable tax treatment
afforded to UK investment trusts, they do not
expect there to be any significant change to the
current principal risks facing the Company nor to
the adequacy of the mitigating controls in place.
Furthermore, the Directors do not reasonably
envisage any change in strategy or objectives
or any events that would prevent the Company
from continuing to operate over that period.
In considering the viability of the Company, the
Directors have conducted a robust assessment
of each of the Company’s principal and emerging
risks and uncertainties as detailed on pages 70
and 71 and in particular the impact of market risk
where a significant fall in American equity markets
would adversely impact the value of the Company’s
investment portfolio. The Directors have also
considered the Company’s leverage and liquidity
in the context of the unsecured floating rate loan
facilities which expire in July and October 2026, the
income and expenditure projections and the fact that
the Company’s investments comprise mainly readily
realisable quoted equity securities which can be sold
to meet funding requirements if necessary. Specific
leverage and liquidity stress testing was conducted
during the year, including consideration of the
risk of further market deterioration. The leverage
stress testing identified the impact on leverage in
scenarios where gross assets fall by 25% and 50%,
reflecting a range of market conditions that may
adversely impact the portfolio. The liquidity stress
testing identified the reduction in the value of assets
that can be liquidated within one month that would
result in the value of those assets falling below the
value of the borrowings. The stress testing did not
indicate any matters of concern. In addition, as
substantially all of the essential services required by
the Company are outsourced to third party service
providers, this allows key service providers to be
replaced at relatively short notice where necessary.
Based on the Company’s processes for monitoring
operating costs, share price discount/premium,
the Managers’ compliance with the investment
objective, asset allocation, the portfolio risk
profile, leverage, counterparty exposure, liquidity
risk and financial controls, the Directors have
concluded that there is a reasonable expectation
that the Company will be able to continue in
operation and meet its liabilities as they fall
due over the next five years as a minimum.
Promoting the success of the Company
(section 172 statement)
Under section 172 of the Companies Act 2006,
the directors of a company must act in the way
they consider, in good faith, would be most likely
to promote the success of the company for the
benefit of its members as a whole, and in doing
so have regard (amongst other matters and to the
extent applicable) to: a) the likely consequences
of any decision in the long term, b) the interests
of the company’s employees, c) the need to
foster the company’s business relationships with
suppliers, customers and others, d) the impact of
the company’s operations on the community and
the environment, e) the desirability of the company
maintaining a reputation for high standards of
business conduct and f) the need to act fairly
as between members of the company.
In this context and having regard to Baillie Gifford
US Growth being an externally-managed investment
company with no employees, the Board considers
that the Company’s key stakeholders are its
existing and potential new shareholders, its
externally-appointed Managers (Baillie Gifford)
and other professional service providers (corporate
broker, registrar, Auditor, Custodian and Depositary),
lenders, portfolio companies, AIC/industry
peers, investment platforms, wider society
and the environment.
The Board considers that the interests of the
Company’s key stakeholders are aligned, in terms
of wishing to see the Company deliver sustainable
long-term growth, in line with the Company’s
stated objective and strategy, and meet the highest
standards of legal, regulatory, and commercial
conduct, with the differences between stakeholders
being merely a matter of emphasis on those elements.
The Board’s methods for assessing the Company’s
progress in the context of its stakeholders’ interests
are set out on the following pages.
Strategic report
Annual Report and Financial Statements 2024
54
Stakeholder Why we engage How we engage and what we do
Shareholders Shareholders are, collectively, the Company’s
owners: providing them with a return for their
investment in accordance with the Company’s
investment policy and objective is the reason
for its existence.
The Board places great importance on communication
with shareholders. The Annual General Meeting provides
an opportunity for the Board and Managers to present to
shareholders on the Company’s performance, future plans
and prospects. It also allows shareholders the opportunity to
meet with the Board and Managers and raise questions and
concerns. The Chair is available to meet with shareholders as
appropriate. The Managers meet regularly with shareholders
and their representatives, reporting their views back
to the Board. Directors also attend certain shareholder
presentations, in order to gauge shareholder sentiment first
hand. Shareholders may also communicate with members of
the Board at any time by writing to them at the Company’s
registered office or to the Company’s broker. These
communication opportunities help inform the Board when
considering how best to promote the success of the Company
for the benefit of all shareholders over the long term.
Baillie Gifford –
Managers and
Secretaries
The Company’s Board has delegated the
management of the Company’s portfolio,
and the administration of the Company’s
operations including fulfilment of regulatory
and taxation reporting requirements, to
Baillie Gifford. Baillie Gifford is therefore
responsible for the substantial activities of
the Company and has the most immediate
influence on its conduct towards the other
stakeholders, subject to the oversight and
strategic direction provided by the Board.
The Board seeks to engage with its Managers, in a
collaborative and collegiate manner, encouraging open and
constructive discussion and debate, while also ensuring that
appropriate and regular challenge is brought and evaluation
conducted. This approach aims to enhance service levels
and strengthen relationships with the Managers, with a view
to ensuring the interests of the Company’s shareholders
are best served, by keeping cost levels proportionate and
competitive, and by maintaining the highest standards of
business conduct.
Portfolio companies As all of the Company’s operations are
conducted by third party service providers,
it is the companies held in its investment
portfolio which have the primary real-world
impact in terms of social and environmental
change, both positively and negatively, as
well as generating, through their commercial
success, the investment growth sought by
the Company’s shareholders. The investee
companies have an interest in understanding
their shareholders’ investment rationale in
order to assure themselves that long-term
business strategies will be supported.
The Board is cognisant of the need to consider the impact
of the Company’s investment strategy and policy on wider
society and the environment. The Board considers that its
oversight of environmental, social and governance (‘ESG’)
matters is an important part of its responsibility to all
stakeholders. The Board’s review of the Managers includes
an assessment of their ESG approach and its application in
making investment decisions. The Board regularly reviews
Governance Engagement reports, which document the
Managers’ interactions with investee companies on ESG
matters (see pages 14 to 19).
Broker The Company’s broker provides an interface
between the Company’s Board and its
institutional shareholders.
The Company’s broker regularly attends Board meetings,
and provides reports to those meetings, in order to keep the
Board apprised of shareholder and wider market sentiment
regarding the Company. They also arrange forums for
shareholders to meet the Chair, or other Directors, outwith
the normal general meeting cycle.
Registrar The Company’s registrar provides an
interface with those shareholders who
hold the Company’s shares directly.
The Company Secretaries liaise with the registrar to
ensure the frequency and accuracy of communications
to shareholders is appropriate, and monitor shareholder
correspondence to ensure that the level of service provided
by the registrar is acceptable. The Managers’ risk function
reviews the registrars’ internal controls report and reports on
the outcome of this review to the Board.
55
Baillie Gifford US Growth Trust plc
Stakeholder Why we engage How we engage and what we do
Auditor The Company’s Auditor has a responsibility
to provide an opinion on the Financial
Statements as set out in the Auditor’s report
to the members on pages 83 to 89.
The Company’s Auditor meets with the Audit Committee
Chair and the Board, in the absence of the Managers where
deemed necessary, and the Managers undertake to provide
all information requested by the Auditor in connection with
the Company’s annual audit promptly and to ensure that it is
complete and accurate in all respects.
Depositary
and Custodian
The Depositary is responsible for the
safekeeping of the Company’s financial
instruments, as set out in more detail on
page 62.
The Depositary provides the Audit Committee with a report
on its monitoring activities. The Board and Managers seek to
engage with the Depositary and Custodian in a collaborative
and collegiate manner, encouraging open and constructive
discussion and debate, while also ensuring that appropriate
and regular challenge is brought and evaluation conducted.
This approach aims to enhance service levels and strengthen
relationships with the Depositary and Custodian, with a view
to ensuring the interests of the Company’s shareholders are
best served by keeping cost levels proportionate and
competitive, and by maintaining the highest standards of
business conduct.
Lenders Lenders such as banks providing fixed
or revolving credit facilities provide the
Company’s gearing as described on page 47
and have an interest in the Company’s ongoing
financial health and viability.
The Company’s legal advisers review all legal agreements
in connection with the Company’s debt arrangements
and advise the Board on the appropriateness of the terms
and covenants therein. The Managers and Secretaries
ensure that the frequency and accuracy of reporting on,
for example, covenant certification is appropriate and
that correspondence from the lenders receives a prompt
response.
AIC/industry peers The Association of Investment Companies
(‘AIC’) and the Company’s investment
trust industry peers have an interest in the
Company’s conduct and performance,
as adverse market sentiment towards
one investment trust can affect attitudes
towards the wider industry.
The Company is a member of the AIC, and the Directors
and/or the Managers and Secretaries (as appropriate)
participate in technical reviews, requests for feedback on
proposed legislation or regulatory developments, corporate
governance discussions and/or training.
Investment platforms Investment platforms provide an interface
with shareholders who invest in the
Company indirectly.
The Managers liaise with the various investment platforms on
strategies for improving communications with the Company’s
shareholders who hold their shares via these platforms. An
annual timetable of key dates is published on the Company’s
website, for the ease of reference of such shareholders.
Wider society and
the environment
No entity, corporate or otherwise, can exist
without having an influence on the society
in which it operates or utilising the planet’s
resources. Through its third-party relationships,
as noted above, the Company seeks to be
a positive influence and, in circumstances
where that is not possible, to mitigate its
negative impacts insofar as is possible.
The Board’s and Managers’ interactions with the various
stakeholders as noted above form the principal forms of
direct engagement with wider society and in respect of the
environment (commercial, financial and in terms of planetary
health and resources).
Strategic report
Annual Report and Financial Statements 2024
56
The Board recognises the importance of keeping
the interests of the Company and its stakeholders,
in aggregate, firmly front of mind in its key decision
making. The Company Secretaries are available at all
times to the Board to ensure that suitable consideration
is given to the range of factors to which the Directors
should have regard. In addition to ensuring that the
Company’s stated investment objective was being
pursued, key decisions and actions during the year
which required the Directors to have regard to
applicable section 172 factors included:
ș the buying back of 7,925,000 of the Company’s
own shares into treasury at a discount to net asset
value, for subsequent reissue, in order to ensure
the Company’s shareholders found liquidity for
their shares when natural market demand was
insufficient, and on terms that enhance net asset
value for remaining shareholders; and
ș refinancing the expiring revolving credit facilities
from ING Bank N.V. with a three-year US$25
million unsecured revolving credit facility from
ING Bank N.V. and a three-year US$25 million
unsecured revolving credit facility from The
Royal Bank of Scotland International Limited,
for the purpose of investing in exciting growth
opportunities, which the Board believes will
enhance long-term returns for shareholders.
Employees, human rights and community
issues
The Board recognises the requirement to provide
information about employees, human rights and
community issues. The Company has no employees.
All its Directors are non-executive and all its functions
are outsourced. There are, therefore, no disclosures
to be made in respect of employees, human rights
and community issues.
Board representation
At 31 May 2024 the Board comprises five Directors,
three male and two female. The Company has no
employees. The Board’s policy and disclosures on
diversity are set out on page 69.
Environmental, social and governance policy
Details of the Company’s policy on socially responsible
investment can be found under ‘Corporate governance
and stewardship’ on page 72 and the Managers’
approach to stewardship and examples of portfolio
company engagement are set out on pages 14 to 19.
The Company considers that it does not fall within
the scope of the Modern Slavery Act 2015 and it
is not, therefore, obliged to make a slavery and
human trafficking statement. In any event, the
Company considers its supply chains to be of low
risk as its suppliers are typically professional
advisers. A statement by the Managers under the
Act has been published on the Managers’ website
at bailliegifford.com.
Future developments of the Company
The outlook for the Company for the next year is set
out in the Chair’s statement on pages 7 and 8 and in
the Managers’ review on pages 9 to 12.
The Strategic report which includes pages 7 to 56
was approved by the Board on 21 August 2024.
Tom Burnet
Chair
This Governance report, which
includes pages 58 to 81 outlines
the Board’s approach to the
governance of your Company.
We believe that good governance
builds better outcomes and we
are committed to high standards
of corporate governance and
transparency.
Governance
report
Governance report
Annual Report and Financial Statements 2024
58
Directors and
management
Tom Burnet
Chair
Appointed 2018
Tom Burnet was appointed a Director and Chair on 5 March 2018 and
is also Chair of the Nomination Committee. He is chair of Kainos Group
plc, a London listed IT services business, and a non-executive director
of CT Private Equity Trust PLC. Tom is also chair of two privately owned
technology businesses. Previously, Tom was managing director of
Serco’s Defence Services division. He started his career as an Army
Officer serving in the Black Watch (R.H.R.), having graduated with an
MBA from the University of Edinburgh.
Sue Inglis
Director
Appointed 2018
Sue Inglis was appointed a Director on 5 March 2018 and is the
Senior Independent Director. She has a wealth of experience from
more than 30 years advising listed investment companies and
financial institutions. Before embarking on a non-executive career, her
executive roles included managing director – Corporate Finance in the
Investment Companies teams at Cantor Fitzgerald Europe (2012–2018)
and Canaccord Genuity (2009–2012). Sue is a qualified lawyer, and
was a partner and head of the funds and financial services group at
Shepherd & Wedderburn, a leading Scottish law firm. In 1999 she was a
founding partner of Intelli Corporate Finance, an advisory boutique firm
focusing on the asset management and investment company sectors,
which was acquired by Canaccord Genuity in 2009. Sue is currently a
non-executive director of CT Global Managed Portfolio Trust PLC and
Seraphim Space Investment Trust PLC.
Graham Paterson
Director
Appointed 2018
Graham Paterson was appointed a Director on 5 March 2018 and is
Chair of the Audit Committee. He is an investment and financial services
professional with over 20 years’ experience in the private equity industry.
A chartered accountant, Graham was one of the founding partners of SL
Capital Partners LLP (formerly Standard Life Investments (Private Equity)
Ltd), where he was a partner and board member until 2010. During his 13
years at SL Capital, he was one of the managers of Standard Life Private
Equity Trust plc and was a member of the advisory boards to a number
of leading private equity fund managers. In 2013, Graham co-founded
TopQ Software Ltd, a technology company which develops software for
the private equity industry. TopQ Software was acquired by eVestment
Inc (now part of NASDAQ Inc) in 2015, where Graham was a director of
the private markets data and analytics business until early 2018. Graham
is currently Senior Independent Director of The Income & Growth
VCT plc and a non-executive director of Invesco Perpetual UK Smaller
Companies Investment Trust plc and Diaceutics PLC.
59
Baillie Gifford US Growth Trust plc
Chris van der Kuyl
Director
Appointed 2021
Chris van der Kuyl was appointed a Director on 1 June 2021. He is one of
Scotland’s leading entrepreneurs working across the technology, media,
gaming and entertainment sectors. Chris is most notably co-founder
and chair of multiple award-winning games developer 4J Studios, best
known for developing Minecraft for Microsoft, Sony and Nintendo games
consoles. He and fellow co-founder, Paddy Burns, launched Chroma
Ventures, the investment arm of 4J Studios, in 2021. Chris is also chair
of Puny Astronaut, Broker Insights, Stormcloud Games and Ace Aquatec
and sits on the boards of Blippar, Ant Workshop, Parsley Box Plc and
Chroma Developments. Alongside his commercial roles, he was the
founding chair of Entrepreneurial Scotland and is currently a member
of multiple advisory and local charity boards.
Rachael Palmer
Director
Appointed 2021
Rachael Palmer was appointed a Director on 1 June 2021. She is an
experienced strategy, marketing and business development professional
with extensive experience working within the technology sector.
Most recently, Rachael led Google’s VC and Startup Partnerships for
the Europe, Middle East and Africa region. Before Google, Rachael
consulted to numerous start-ups and led marketing and business
development efforts for EY’s world famous Entrepreneur of the Year
Program. Rachael has also held positions at American Express and
Microsoft where she held various product, marketing and business
development roles. Rachael received her MBA from The Wharton School
and her BSE in Computer Science & Engineering from the University
of Pennsylvania.
All the Directors above and on the prior page served on the Board
throughout the year. All Directors are non-executive and, in the opinion
of the Board, are independent of the Managers. All Directors are
members of the Nomination and Audit Committees.
Governance report
Annual Report and Financial Statements 2024
60
Managers and secretaries
The Company has appointed Baillie Gifford & Co Limited, a wholly
owned subsidiary of Baillie Gifford & Co, as its Alternative Investment
Fund Manager and Company Secretaries. Baillie Gifford & Co Limited
has delegated portfolio management services to Baillie Gifford & Co.
Dealing activity and transaction reporting have been further
sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford
Asia (Hong Kong) Limited. Baillie Gifford & Co is an investment
management firm formed in 1927 out of the legal firm Baillie & Gifford,
WS, which had been involved in investment management since 1908.
Baillie Gifford is one of the largest investment trust managers in the
UK and currently manages thirteen closed-ended investment
companies. Baillie Gifford also manages open-ended investment
companies, together with investment portfolios on behalf of pension
funds, charities and other institutional clients, both in the UK and
overseas. Funds under the management or advice of Baillie Gifford
totalled around £217.8 billion. Based in Edinburgh, it is one of the
leading privately owned investment management firms in the UK,
with 58 partners and a staff of around 1,700.
Baillie Gifford & Co Limited and Baillie Gifford & Co are both
authorised and regulated by the Financial Conduct Authority.
Gary Robinson
Portfolio manager
Appointed 2018
Gary is a partner and US Equity Growth investment manager. Gary
joined Baillie Gifford in 2003 and spent time working in the Japanese,
UK and European Equity teams before moving to the US Equity Team
in 2008. Gary is a generalist investor but retains a special interest in
the healthcare sector, dating back to his undergraduate degree. He
graduated MBiochem in Biochemistry from Oxford University in 2003.
Kirsty Gibson
Portfolio manager
Appointed 2021
Kirsty is a portfolio manager in the US Equity Growth team. Kirsty
joined Baillie Gifford in 2012 and began her career on the US Equity
team, moving on to spend several years in the small and large cap
global equities departments, before returning to the US Equity team.
She graduated MA (Hons) in Economics in 2011 and MSc in Carbon
Management in 2012, both from the University of Edinburgh.
Portfolio managers
61
Baillie Gifford US Growth Trust plc
Directors’
report
The Directors present their
report together with the Financial
Statements of the Company for
the year to 31 May 2024.
Corporate governance
The Corporate governance report is set out on pages
66 to 72 and forms part of this report.
Managers and Company Secretaries
Baillie Gifford & Co Limited, a wholly owned
subsidiary of Baillie Gifford & Co, has been
appointed as the Company’s Alternative Investment
Fund Manager (‘AIFM’) and Company Secretaries.
Baillie Gifford & Co Limited has delegated portfolio
management services to Baillie Gifford & Co. Dealing
activity and transaction reporting have been further
sub-delegated to Baillie Gifford Overseas Limited and
Baillie Gifford Asia (Hong Kong) Limited.
The Investment Management Agreement between
the AIFM and the Company sets out the matters over
which the Managers have authority in accordance
with the policies and directions of, and subject to
restrictions imposed by, the Board. The Investment
Management Agreement is terminable on not less
than six months’ notice. Compensation fees would
only be payable in respect of the notice period if
termination by the Company were to occur within
a shorter notice period.
The annual management fee is 0.70% on the first
£100 million of net assets, 0.55% on the next
£900 million of net assets and 0.50% on the
remaining net assets. Management fees are
calculated and payable quarterly. The Board is of
the view that calculating the fee with reference to
performance would be unlikely to exert a positive
influence on performance.
The Board as a whole fulfils the functions of the
Management Engagement Committee. The Board
considers the Company’s investment management
and secretarial arrangements on a continuing basis
and a formal review is conducted at least annually.
Governance report
Annual Report and Financial Statements 2024
62
The Board considers, amongst others, the following
topics in its review:
ș the quality of the personnel assigned to handle
the Company’s affairs;
ș the investment process and the results achieved
to date;
ș the administrative services provided by the
Secretaries; and
ș the marketing effort undertaken by the Managers.
Following the most recent review, it is the opinion
of the Directors that the continuing appointment of
Baillie Gifford & Co Limited as AIFM and Company
Secretaries and the delegation of the investment
management services to Baillie Gifford & Co, and
the further sub-delegation of dealing activity and
transaction reporting to Baillie Gifford Overseas
Limited and Baillie Gifford Asia (Hong Kong)
Limited, on the terms agreed, is in the interests
of the Company and the shareholders as a whole
due to the strength of the investment management
team, the Managers’ commitment to the investment
trust sector, the quality of the secretarial and
administrative functions and the marketing efforts
undertaken by the Managers.
Depositary
In accordance with the Alternative Investment
Fund Managers Directive, the AIFM must appoint a
Depositary to the Company. The Bank of New York
Mellon (International) Limited has been appointed
as the Company’s Depository.
The Depositary’s responsibilities include cash
monitoring, safe keeping of the Company’s financial
instruments, verifying ownership and maintaining
a record of other assets and monitoring the
Company’s compliance with investment limits and
leverage requirements. The custody function is
also undertaken by The Bank of New York Mellon
(International) Limited (the ‘Custodian’).
Directors
The names and biographical details of the Board
members who served on the Board as at the year
end and up to the date the Financial Statements
were signed can be found on pages 58 and 59.
Each Director shall retire from office at each
Annual General Meeting and offer themselves
for re-election.
Following formal performance evaluation, the
Board concluded that the performance of the
Directors continues to be effective and each remains
committed to the Company. Their contribution to the
Board is greatly valued and the Board recommends
their re-election to shareholders.
Directors’ indemnity and insurance
The Company has entered into qualifying third party
deeds of indemnity in favour of each of its Directors.
The deeds, which were in force during the year
to 31 May 2024 and up to the date of approval of
this report, cover any liabilities that may arise to a
third party, other than the Company, for negligence,
default or breach of trust or duty. The Directors
are not indemnified in respect of liabilities to the
Company, any regulatory or criminal fines, any costs
incurred in connection with criminal proceedings in
which the Director is convicted or civil proceedings
brought by the Company in which judgement is
given against him or her. In addition, the indemnity
does not apply to any liability to the extent that it is
recovered from another person.
The Company maintains Directors’ and Officers’
liability insurance.
Conflicts of interest
Each Director submits a list of potential conflicts of
interest to the Nomination Committee on an annual
basis. The Committee considers these carefully,
taking into account the circumstances surrounding
them, and makes a recommendation to the Board
on whether or not the potential conflicts should be
authorised. Board authorisation is for a period of
one year.
Having considered the lists of potential conflicts
there were no situations which gave rise to a direct
or indirect interest of a Director which conflicted
with the interests of the Company.
63
Baillie Gifford US Growth Trust plc
Share capital
Capital structure
The Company’s capital structure (excluding
treasury shares) as at 31 May 2024 consisted of
297,228,700 ordinary shares of 1p each (see note 12
to the Financial Statements on page 102). At 31 May
2024, 10,131,300 shares were held in treasury. There
are no restrictions concerning the holding or transfer
of the Company’s ordinary shares and there are no
special rights attached to any of the shares.
Dividends
The ordinary shares carry a right to receive
dividends. Interim dividends are determined by the
Directors, whereas any proposed final dividend is
subject to shareholder approval. The Company’s
objective is to produce capital growth and the policy
is only to distribute, by way of a final dividend, the
minimum permissible to maintain investment trust
status. No dividends were declared during, or in
respect of, the period.
Capital entitlement
On a winding up, after meeting the liabilities of the
Company, the surplus assets will be paid to ordinary
shareholders in proportion to their shareholdings.
Voting
Each ordinary shareholder present in person or by
proxy is entitled to one vote on a show of hands and,
on a poll, to one vote for every share held.
Information on the deadlines for proxy appointments
for the forthcoming AGM can be found on pages 116
and 117.
Major interests disclosed in the Company’s shares
Name
Ordinary
1p shares
held at
31 May 2024
% of issue
at 31 May
2024
Saba Capital Management,
L.P. (indirect)
39,339,754 13.2
Brewin Dolphin Limited (indirect) 27,039,346 9.1
Quilter plc (indirect) 14,967,518 5.0
Subsequent to the year end on 12 June 2024 the
Company received notification that Quilter plc held
14,812,038 shares, being 4.98% of the shares in
issue. On 19 June 2024 the Company received
notification Saba Capital Management, L.P. held
41,894,682 shares, being 14.1% of the shares in
issue. The Company received further notification
on 13 August 2024 that Saba Capital Management,
L.P. held 44,308,785, being 15.0% of the shares in
issue. There have been no further notifications of
major interests in the Company’s shares intimated
up to 16 August 2024.
Analysis of shareholders at 31 May
2024
Number of
shares held
2024
%
2023
Number of
shares held
2023
%
Institutions 36,077,259 12.1 45,557,960 14.9
Intermediaries 218,868,169 73.6 240,643,562 78.9
Individuals 432,785 0.2 1,552,388 0.5
Marketmakers 41,850,487 14.1 17,399,790 5.7
297,228,700 100.0 305,153,700 100.0
Annual General Meeting
Issuance of shares
At the last Annual General Meeting, the Directors
were granted shareholders’ approval for a general
authority to allot shares and also an authority to
issue shares or sell shares held in treasury
on a non pre-emptive basis (without first offering
such shares to existing shareholders pro rata to their
existing holdings). No shares were issued during the
year (2023 – no shares were issued).
Both authorities expire at the forthcoming Annual
General Meeting and the Directors are seeking
shareholders’ approval to renew them for a further
year, as detailed below.
Resolution 10 in the Notice of Annual General
Meeting seeks a general authority in substitution to
the Company’s existing authorities for the Directors
to issue ordinary shares or C shares up to an
aggregate nominal amount of £984,262.33. This
amount represents one-third of the Company’s total
ordinary share capital in issue (excluding treasury
shares) at 16 August 2024 and meets institutional
guidelines. This authority would be in substitution
for the existing authority and will continue until the
conclusion of the Annual General Meeting to be
held in 2025 or on the expiry of 15 months from the
passing of the resolution, if earlier.
Governance report
Annual Report and Financial Statements 2024
64
Resolution 11, which is proposed as a special
resolution, seeks authority for the Directors to
allot equity securities or sell treasury shares on
a non pre-emptive basis for cash up to an aggregate
nominal amount of £295,278.70 (representing
10% of the issued ordinary share capital of the
Company excluding treasury shares as at
16 August 2024). This authority would be in
substitution for the existing authority and will
continue until the conclusion of the Annual General
Meeting to be held in 2025 or on the expiry of 15
months from the passing of the resolution, if earlier.
The Directors consider that the authorities proposed
to be granted by Resolutions 10 and 11 continue
to be advantageous when the Company’s shares
trade at a premium to net asset value and the level
of natural liquidity in the market is unable to meet
demand.
Such authorities will only be used to issue ordinary
shares or sell ordinary shares from treasury at
a premium to net asset value and only when the
Directors believe that it would be in the best
interests of the Company to do so. The Directors
believe that the ability to buyback shares at a
discount and re-sell them or issue new ordinary
shares at a premium are useful tools in smoothing
supply and demand.
12,081,300 shares were held in treasury as at
16 August 2024.
Market purchases of shares by the Company
At the last Annual General Meeting the Company
was granted authority to purchase up to 45,742,539
ordinary shares (equivalent to approximately 14.99%
of the ordinary shares in issue (excluding treasury
shares) as at 14 August 2023). This authority
expires at the forthcoming Annual General Meeting.
7,925,000 shares were bought back during the
year under review and 10,131,300 shares are held in
treasury at 31 May 2024. Between 1 June 2024 and
16 August 2024 a further 1,950,000 shares were
bought back.
Share buy-backs may be made principally:
i. to enhance net asset value for continuing
shareholders by purchasing shares at a discount
to the prevailing net asset value; and
ii. to address any imbalance between the supply of
and the demand for the Company’s shares that
results in a discount of the quoted market price
to the published net asset value per share.
The Company may hold bought back shares in
treasury and then:
i. sell such shares (or any of them) for cash (or its
equivalent under the Companies Act 2006); or
ii. cancel the shares (or any of them).
Shares will only be re-sold from treasury at a
premium to net asset value per ordinary share.
Treasury shares do not receive distributions and the
Company is not entitled to exercise voting rights
attaching to them.
The Directors are seeking shareholders’ approval
at the Annual General Meeting to renew the
authority to purchase up to 44,262,277 ordinary
shares in issue (excluding treasury shares) as at
16 August 2024, being the latest practicable date
prior to the publication of this document (or, if less,
the number representing approximately 14.99% of
the Company’s ordinary shares in issue (excluding
treasury shares) at the date of passing of the
resolution, such authority to expire at the Annual
General Meeting of the Company to be held in 2025.
In accordance with the UK Listing Rules, the
maximum price (excluding expenses) that may be
paid on the exercise of the authority must not exceed
the higher of:
i. 5% above the average closing price on the
London Stock Exchange of an ordinary share over
the five business days immediately preceding the
date of purchase; and
ii. an amount equal to the higher of the price of
the last independent trade of an ordinary share
and the highest current independent bid for an
ordinary share on the trading venue where the
purchase is carried out.
The minimum price (exclusive of expenses) that
may be paid will be the nominal value of an ordinary
share. Purchases of shares will be made within
guidelines established, from time to time, by the
Board. Your attention is drawn to Resolution 12 in
the Notice of Annual General Meeting.
Recommendation
The Directors consider each resolution being
proposed at the Annual General Meeting to be in the
best interests of the Company and its shareholders
as a whole and they unanimously recommend that
all shareholders vote in favour of them, as they
intend to do where possible in respect of their own
beneficial shareholdings.
65
Baillie Gifford US Growth Trust plc
Financial instruments
The Company’s financial instruments comprise
its investment portfolio, cash balances, bank
borrowings and debtors and creditors that arise
directly from its operations such as sales and
purchases awaiting settlement and accrued income.
The financial risk management objectives and
policies arising from its financial instruments and
the exposure of the Company to risk are disclosed
in note 17 to the Financial Statements on pages 104
to 111.
Articles of Association
The Company’s Articles of Association may only be
amended by special resolution at a general meeting
of shareholders.
Disclosure of information to Auditor
The Directors confirm that so far as each of
the Directors is aware there is no relevant audit
information of which the Company’s Auditor is
unaware and the Directors have taken all the steps
that they ought to have taken as Directors in order
to make themselves aware of any relevant audit
information and to establish that the Company’s
Auditor is aware of that information.
Independent Auditor
The Auditor, Ernst & Young LLP, is willing to
continue in office and, in accordance with section
489 and section 491(1) of the Companies Act
2006, resolutions concerning Ernst & Young LLP’s
reappointment and remuneration will be submitted
to the Annual General Meeting.
Post balance sheet events
The Directors confirm that there have been no post
Balance Sheet events which require adjustment of
in, the Financial Statements or notes thereto up to
21 August 2024.
Greenhouse Gas Emissions and Streamlined
Energy and Carbon Report (‘SECR’)
All of the Company’s activities are outsourced
to third parties. The Company therefore has no
greenhouse gas emissions to report from its
operations, nor does it have responsibility for any
other emissions producing sources under the
Companies Act 2006 (Strategic report and Directors’
reports) Regulations 2013. For the reasons set
out above, the Company considers itself to be a
low energy user and, therefore, is not required to
disclose energy and carbon information under the
SECR regulations.
Bribery Act
The Company has a zero tolerance policy towards
bribery and is committed to carrying out business
fairly, honestly and openly. The Managers also adopt
a zero tolerance approach and have policies and
procedures in place to prevent bribery.
Criminal Finances Act 2017
The Company has a commitment to zero tolerance
towards the criminal facilitation of tax evasion.
On behalf of the Board
Tom Burnet
Chair
21 August 2024
Governance report
Annual Report and Financial Statements 2024
66
Corporate
governance report
Compliance
The Board confirms that the Company has complied throughout the
year under review with the relevant provisions of the Code (with the
exception of the membership of the Audit Committee noted below) and
the recommendations of the AIC Code. The Code includes provisions
relating to the role of the chief executive, executive directors’
remuneration and the need for an internal audit function. Given that
the Company is an externally managed investment trust, the Board
considers these provisions are not relevant to the Company. The
need for an internal audit function specific to the Company has been
addressed on page 73. Although the AIC Code permits the Chair of
the Board to be a member of the Audit Committee, the Code does not.
The Board believes it is appropriate for Mr TJW Burnet to be a member
of the Audit Committee due to the small size of the Board and his
knowledge, experience and professional expertise being a significant
benefit to the Committee. Mr TJW Burnet was and continues to be
considered independent.
The Board
The Board has overall responsibility for the Company’s affairs. It has a
number of matters formally reserved for its approval including strategy,
investment policy, currency hedging, gearing, treasury matters,
dividend and corporate governance policy. A separate strategy session
is held annually. The Board also reviews the Financial Statements,
investment transactions, revenue budgets and performance of the
Company. Full and timely information is provided to the Board to enable
the Board to function effectively and to allow Directors to discharge
their responsibilities.
At 31 May 2024 the Board comprised five Directors all of whom are
non-executive.
The Chair, Mr TJW Burnet, is responsible for organising the business of
the Board, ensuring its effectiveness and setting its agenda.
The executive responsibilities for investment management have been
delegated to the Company’s Alternative Investment Fund Manager
(‘AIFM’), Baillie Gifford & Co Limited, and, in the context of a Board
comprising entirely non-executive Directors, there is no chief executive
officer. The Senior Independent Director is Ms SP Inglis.
The Directors believe that the Board has a balance of skills and
experience which enable it to provide effective strategic leadership and
proper governance of the Company. Information about the Directors,
including their relevant experience, can be found on pages 58 and 59.
The Board is committed to
achieving and demonstrating
high standards of corporate
governance. The Association of
Investment Companies (‘AIC’)
Code of Corporate Governance
(‘AIC Code’) provides a framework
of best practice for investment
companies and can be found
at theaic.co.uk. The Financial
Reporting Council (‘FRC’) has
confirmed that AIC members who
report against the AIC Code, as is
the case with the Company, will
be meeting their obligations in
relation to the 2018 UK Corporate
Governance Code (the UK ‘Code’),
which can be found at frc.org.uk.
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Baillie Gifford US Growth Trust plc
Board of Directors
Comprises independent
non-executive directors*
Chair: Tom Burnet
Senior Independent Director:
Sue Inglis
Audit
Committee
Chair: Graham Paterson
Purpose: The primary purpose of the
Company’s Audit Committee is to provide
oversight of the financial reporting process,
the audit process, the Company’s system
of internal controls and compliance with
laws and regulations.
Nomination
Committee
Chair: Tom Burnet
Purpose: The main purpose of the
Nomination Committee is to oversee Board
recruitment and succession planning as
well as Board appraisals including
identifying training needs.
Third-party service providers
appointed by the Board
Alternative Investment Fund Managers and Company Secretaries:
Baillie Gifford & Co Limited (wholly owned
subsidiary of Baillie Gifford & Co)
Dealing activity and transaction reporting:
Baillie Gifford Overseas Limited and
Baillie Gifford Asia (Hong Kong) Limited
Portfolio management:
Baillie Gifford & Co
Ernst & Young
LLP
Auditor
The Bank of
New York Mellon
(International) Limited
Depositary and Custodian
Computershare
Investor Services
PLC
Registrar
Panmure Liberum
Limited
Company broker
*
The independent non-executive directors are made up of Tom Burnet, Sue Inglis, Chris van der Kuyl, Rachael Palmer and Graham Paterson.
Further details on their experience and contribution to the Board can be found on pages 58 and 59.
Governance report
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68
There is an agreed procedure for Directors to seek
independent professional advice if necessary at the
Company’s expense. No such advice was sought in
the year to 31 May 2024 or 31 May 2023.
Appointments to the Board
The terms and conditions of Directors’ appointments
are set out in formal letters of appointment which are
available for inspection on request.
Under the provisions of the Company’s Articles
of Association, a Director appointed during the
period is required to retire and seek election by
shareholders at the next Annual General Meeting.
In accordance with the Code, all Directors will retire
from office at each Annual General Meeting and,
if appropriate, offer themselves for re-election.
The reasons why the Board supports the Directors
re-election are set out on page 62.
Directors are not entitled to any termination
payments in relation to their appointment.
Chair and Directors’ tenure
The Nomination Committee has considered the
question of tenure for Directors and has concluded
that there should not be a set maximum time
limit for a Director or Chair to serve on the Board.
The Nomination Committee keeps under review
the balance of skills, knowledge, experience,
performance and length of service of the Directors
ensuring the Board has the right combination of
skills and preservation of knowledge and experience
balanced with the appointment of new Directors
bringing in fresh ideas and perspective.
Independence of Directors
All of the Directors are considered by the Board to
be independent of the Managers and free of any
business or other relationship which could interfere
with the exercise of their independent judgement.
The Directors recognise the importance of
succession planning for company boards and
reviews the Board composition annually. The
Board is of the view that length of service will not
necessarily compromise the independence or
contribution of Directors of an investment trust
company, where continuity and experience can be
a benefit to the Board.
Following formal performance evaluation the
Board considers that each Director continues to
be independent in character and judgement and
their skills and experience are a significant benefit
to the Board.
Meetings
There is an annual cycle of Board meetings which
is designed to address, in a systematic way, overall
strategy, review of investment policy, investment
performance, marketing, revenue budgets, dividend
policy and communication with shareholders. The
Board considers that it meets sufficiently regularly
to discharge its duties effectively. The following
table shows the attendance record for the Board and
Committee meetings held during the year, excluding
ancillary and sub-committee meetings. The Annual
General Meeting was attended by all the Directors
with the exception of Mr van der Kuyl.
Directors’ attendance at meetings
Board
Audit
Committee
Nomination
Committee
Number of meetings 4 4 1
TJW Burnet 4 4 1
SP Inglis 4 4 1
GD Paterson 4 4 1
CRD van der Kuyl 3 4 1
RL Palmer 4 4 1
Nomination Committee
The Nomination Committee consists of the whole
Board due to its relatively modest size. The Chair
of the Board is Chair of the Committee. The
Committee meets on an annual basis and at such
other times as may be required. The Committee has
written terms of reference which include reviewing
the composition of the Board, identifying and
nominating new candidates for appointment to
the Board, Board appraisal, Board independence,
succession planning and training. The Committee
also considers whether Directors should be
recommended for re-election by shareholders. The
Committee is responsible for considering Directors’
potential conflicts of interest and for making
recommendations to the Board on whether or not
the potential conflicts should be authorised.
The Committee’s terms of reference are available
on request from the Company and on the Company
website: bgusgrowthtrust.com.
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Baillie Gifford US Growth Trust plc
Board diversity
Diversity policy
Appointments to the Board are made on merit with
due regard for the benefits of diversity including
gender, social and ethnic backgrounds and cognitive
and personal strengths. The priority in appointing
new Directors is to identify the candidate with the
best range of skills and experience to complement
existing Directors, with a view to ensuring that the
Board remains well placed to help the Company
achieve its investment and governance objectives.
The following disclosures are provided in respect
of the UK Listing Rules targets that: i) 40% of a
board should be women; ii) at least one senior role
should be held by a woman; and iii) at least one
board member should be from a non-white ethnic
background, as defined by the Office of National
Statistics (ONS) criteria.
The breakdown of gender diversity and ethnic
background on the Board is shown below.
Gender Number
% of the
Board
Senior
roles
Men 3 60% 1 *
Women 2 40% 1
5 100%
*
The Board Chair, being a senior position in accordance with the UK
Listing Rules. The Board also considers the Nomination Committee
and Audit Committee Chairs to be senior positions. The Nomination
Committee Chair is also the Board Chair. The Audit Committee Chair
is a man.
Ethnic background Number
% of the
Board
Senior
roles
White British or
Other White (including
minority white groups)
4 80% 2 *
Black/African/
Caribbean/Black British
1 20% –
5 100%
*
The Board Chair and SID, being senior positions in accordance with the
UK Listing Rules. The Board also considers the Nomination Committee
and Audit Committee Chairs to be senior positions. The Nomination
Committee Chair is also the Board Chair. The Audit Committee Chair’s
ethnic background is White.
As at 31 May 2024, the Board complied with
the UK Listing Rule target with respect to ethnic
background and the 40% target for women. The
Board also meets the UK Listing Rules target for a
woman holding a senior role on the Board (Ms SP
Inglis is the Senior Independent Director).
As an externally managed investment company with
no chief executive officer (CEO) or chief financial
officer (CFO), the Board considers the Chairs of
the Audit Committee and Nomination Committee
to be senior roles in addition to the roles of Senior
Independent Director and Board Chair identified as
such by the FCA.
Board composition
In order to fulfil its obligations, the Board recognises
the importance of having a range of skilled and
experienced Directors, balancing the benefits of
length of service and knowledge of the Company
with the desirability of ensuring regular refreshment
of the Board.
The Board reviewed the composition of the Board
during the year in consideration of succession
planning and developing a diverse pipeline.
In line with the AIC Corporate Governance Code
principle that ‘a successful company is led by
an effective Board, whose role is to promote the
long-term sustainable success of the company,
generating value for shareholders and contributing
to wider society’ the Board will be undertaking a
recruitment process in the coming years to allow
time for an appropriate transition period. The
intention of the Board is that Director retirements
will be staggered, ensuring the experience and
diversity of the Board is maintained and effective
succession planning occurs.
Performance evaluation
An appraisal of the Chair, each Director and a
performance evaluation and review of the Board
as a whole and its Committees was carried out during
the year. After completing an evaluation questionnaire
the results were discussed and reviewed by the
Board. The appraisal of the Chair was led by Ms SP
Inglis, the Senior Independent Director.
The appraisals and evaluations considered,
amongst other criteria, the balance of skills of the
Board, training and development requirements, the
contribution of individual Directors and the overall
effectiveness of the Board and its Committees.
Following this process it was concluded that the
performance of each Director, the Chair, the Board
and its Committees continues to be effective and
the Chair and each of the other Directors remains
committed to the Company.
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70
A review of the Chair’s and the other Directors’
commitments was carried out and the Nomination
Committee is satisfied that they are capable of
devoting sufficient time to the Company. There
were no significant changes to the Chair’s other
commitments during the year.
The Company became a constituent of the FTSE
350 Index in January 2024. The Board intends that
an independent external agency will be engaged
to carry out the evaluation following the third
anniversary of the Company’s addition to the
FTSE 350 Index.
Induction and training
New Directors are provided with an induction
programme which is tailored to the particular
circumstances of the appointee. Regular briefings
were provided during the year on industry and
regulatory matters. Directors receive other relevant
training as necessary.
Remuneration
As all the Directors are non-executive, there is
no requirement for a separate Remuneration
Committee. Directors’ fees are considered by the
Board as a whole within the limits approved
by shareholders. The Company’s policy on
remuneration is set out in the Directors’
Remuneration report on page 77.
Audit Committee
The report of the Audit Committee is set out on
pages 73 to 75.
Internal controls and risk management
The Directors acknowledge their responsibility
for the Company’s risk management and
internal controls systems and for reviewing their
effectiveness. The systems are designed to manage
rather than eliminate the risk of failure to achieve
business objectives and can only provide reasonable
but not absolute assurance against material
misstatement or loss.
The Board confirms that there is a continuing
process for identifying, evaluating and managing
the significant risks faced by the Company in
accordance with the FRC ‘Guidance on Risk
Management, Internal Control and Related Financial
and Business Reporting’. No significant weaknesses
were identified in the year under review and up to
the date of this report.
The practical measures in relation to the design,
implementation and maintenance of control policies
and procedures to safeguard the Company’s
assets and to manage its affairs properly, including
the maintenance of effective operational and
compliance controls, have been delegated to the
Managers and Secretaries.
The Board oversees the functions delegated to the
Managers and Secretaries and the controls managed
by the AIFM in accordance with the UK Alternative
Investment Fund Managers Regulations (as detailed
below). Baillie Gifford & Co’s Internal Audit and
Compliance Departments and the AIFM’s permanent
risk function provide the Audit Committee with
regular reports on their monitoring programmes.
The reporting procedures for these departments
are defined and formalised within a service level
agreement. Baillie Gifford & Co conducts an annual
review of its system of internal controls which is
documented within an internal controls report which
complies with ISAE 3402 – Assurance Reports on
Internal Controls of Service Organisations made
available to Third Parties. This report is independently
reviewed by Baillie Gifford & Co’s auditor and a copy
is submitted to the Audit Committee.
A report identifying the material risks faced by the
Company and the key controls employed to manage
these risks is reviewed by the Audit Committee.
These procedures ensure that consideration is
given regularly to the nature and extent of risks
facing the Company and that they are being
actively monitored. Where changes in risk have
been identified during the year they also provide
a mechanism to assess whether further action is
required to manage these risks.
The Board confirms that these procedures have
been in place throughout the Company’s financial
year and continue to be in place up to the date of
approval of this report.
To comply with the UK Alternative Investment Fund
Managers Regulations, The Bank of New York
Mellon (International) Limited acts as the Company’s
Depositary and Baillie Gifford & Co Limited as its
AIFM.
The Depositary’s responsibilities include cash
monitoring, safe keeping of the Company’s financial
instruments, verifying ownership and maintaining a
record of other assets and monitoring the Company’s
compliance with investment limits and leverage
requirements. The Depositary is liable for the loss of
financial instruments held in custody. The Depositary
will ensure that any delegate segregates the assets
71
Baillie Gifford US Growth Trust plc
of the Company. The Company’s Depositary also
acts as the Company’s Custodian. The Custodian
prepares reports on its key controls and safeguards
which are independently reviewed by its appointed
auditor. The reports are reviewed by Baillie Gifford’s
Business Risk Department and a summary of the key
points is reported to the Audit Committee and any
concerns are investigated.
The Depositary provides the Audit Committee with a
report on its monitoring activities.
The AIFM has established a permanent risk
management function to ensure that effective risk
management policies and procedures are in place
and to monitor compliance with risk limits. The AIFM
has a risk management policy which covers the risks
associated with the management of the portfolio,
and the adequacy and effectiveness of this policy
is reviewed and approved at least annually. This
review includes the risk management processes and
systems and limits for each risk area.
The risk limits, which are set by the AIFM and
approved by the Board, take into account the
objectives, strategy and risk profile of the portfolio.
These limits, including leverage (see page 119) are
monitored and the sensitivity of the portfolio to key
risks is undertaken periodically as appropriate to
ascertain the impact of changes in key variables
in the portfolio. Exceptions from limits monitoring
and stress testing undertaken by Baillie Gifford’s
Business Risk Department are escalated to the AIFM
and reported to the Board along with any remedial
measures being taken. No exceptions occurred
during the year.
Going concern
In accordance with the Financial Reporting Council’s
guidance on going concern and liquidity risk, the
Directors have undertaken a rigorous review of the
Company’s ability to continue as a going concern.
The Company’s principal risks are market related
and include market risk, liquidity risk and credit
risk. An explanation of these risks and how they are
managed is set out on pages 48 to 52 and contained
in note 17 to the Financial Statements on pages 104
to 111.
The Board has considered in particular, the impact of
heightened market volatility due to macroeconomic
and geopolitical concerns, but does not believe the
Company’s going concern status is affected.
The Company’s assets, the majority of which are
investments in quoted securities which are readily
realisable, exceed its liabilities significantly. All
borrowings require the prior approval of the Board.
Gearing levels and compliance with borrowing
covenants are reviewed by the Board on a regular
basis. As at 31 May 2024, the Company had a net
current liability of £34.3 million primarily as a result
of the two US$25 million revolving credit facilities.
The Company has continued to comply with the
investment trust status requirements of section 1158
of the Corporation Tax Act 2010 and the Investment
Trust (Approved Company) (Tax) Regulations 2011.
Accordingly, the Financial Statements have been
prepared on the going concern basis as it is the
Directors’ opinion, having assessed the principal
and emerging risks and other matters set out in
the viability statement on page 53, which assesses
the prospects of the Company over a period of five
years, that the Company will continue in operational
existence for a period of at least twelve months from
the date of approval of the Financial Statements.
Relations with shareholders
The Board places great importance on
communication with shareholders. The Company’s
Managers meet regularly with shareholders and
their representatives and report shareholders’ views
to the Board. The Chair is available to meet with
shareholders as appropriate. Shareholders wishing
to communicate with any member of the Board may
do so by writing to them at the Company’s registered
office or through the Company’s broker, Panmure
Liberum Limited (see contact details on page 129).
The Company’s Annual General Meeting provides
a forum for communication with all shareholders.
The level of proxies lodged for each resolution
will be announced at the Meeting and is published
on the Company website bgusgrowthtrust.com
subsequent to the meeting.
The notice period for the Annual General Meeting
is at least twenty working days.
Shareholders and potential investors may obtain
up-to-date information on the Company at
bgusgrowthtrust.com.
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72
Corporate governance and stewardship
The Company has given discretionary voting powers
to Baillie Gifford & Co. The Managers vote against
resolutions they consider may damage shareholders’
rights or economic interests and report their actions
to the Board.
The Company believes that it is in the shareholders’
interests to consider environmental, social and
governance (‘ESG’) factors, including climate
change, when selecting and retaining investments
and has asked the Managers to take these issues
into account as long as the investment objectives
are not compromised. The Managers do not exclude
companies from their investment universe purely
on the grounds of ESG factors but adopt a positive
engagement approach whereby matters
are discussed with management with the aim of
improving the relevant policies and management
systems and enabling the Managers to consider
how ESG factors could impact long term investment
returns. The Managers’ statement of compliance
with the UK Stewardship Code can be found on
the Managers’ website at bailliegifford.com. The
Managers’ policy has been reviewed and endorsed
by the Board. Baillie Gifford & Co has considered the
Sustainable Finance Disclosure Regulation (‘SFDR’)
and further details can be found on page 121.
Climate change
The Board recognises that climate change poses
a serious threat to our environment, our society
and economies and companies around the globe.
Addressing the underlying causes is likely to result
in companies that are high emitters of carbon facing
greater societal and regulatory scrutiny and higher
costs to account for the true environmental impact
of their activities. The Managers pursuit of long-term
growth opportunities typically involves investment
in entrepreneurial, disruptive and technology-driven
businesses. These companies are often capital-light
with a low carbon footprint.
The Managers’ utilise data sourced from a third
party provider to map the carbon footprint of the
equity portfolio, using the information to prioritise
engagement and understand what higher emitting
companies are doing to manage climate risk better.
Best practice in this area is evolving rapidly, and
it is therefore challenging to establish reliable
comparisons company-to-company and year-on-
year. Based on the most recent analysis, as at 31
May 2024 the carbon intensity of Baillie Gifford
US Growth Trust’s portfolio was 89.4% lower than
the Company’s benchmark (S&P 500 Index). This
analysis estimate is based on the 64% of the value
of the Company’s portfolio which reports on carbon
emissions and other carbon-related characteristics
and Scope 1&2 Weighted Average Carbon Intensity
(WACI) by Revenue. Carbon intensity measures the
carbon efficiency of the portfolio per unit of output
and assesses the portfolio’s exposure to carbon-
intensive companies.
Baillie Gifford’s Task Force on Climate-Related
Financial Disclosures (‘TCFD’) Climate report
is available on the Managers’ website at
bailliegifford.com. A TCFD climate report for
Baillie Gifford US Growth is available on the
Company website at bgusgrowthtrust.com.
The Managers, Baillie Gifford & Co, are signatories
to the Principles for Responsible Investment, the
Net Zero Asset Managers initiative and the Carbon
Disclosure Project and are also members of the
Asian Corporate Governance Association and the
International Corporate Governance Network.
On behalf of the Board
Tom Burnet
Chair
21 August 2024
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Baillie Gifford US Growth Trust plc
The Audit Committee consists of all the independent
Directors. The 2019 AIC Code of Corporate
Governance permits the Chair of the Board to be a
member of the Audit Committee. The Board believes
that Mr TJW Burnet’s knowledge, experience and
professional expertise is a significant benefit to
the Committee. The members of the Committee
consider that they have the requisite financial
skills and experience to fulfil the responsibilities
of the Committee. Mr GD Paterson, Chair of the
Committee, is a Chartered Accountant.
The Committee’s authority and duties are clearly
defined within its written terms of reference
which are available on request from the Company
Secretaries and at bgusgrowthtrust.com. The terms
of reference are reviewed annually.
The Committee’s effectiveness is reviewed on an
annual basis as part of the Board’s performance
evaluation process.
At least once a year, where deemed necessary,
the Committee meets with the external Auditor
without any representative of the Managers being
present.
Main activities of the Committee
The Committee met twice during the year, and the
external Auditor, Ernst & Young LLP, attended both
meetings. Baillie Gifford & Co’s Internal Audit and
Compliance Departments and the AIFM’s permanent
risk function provided reports on their monitoring
programmes for these meetings. In addition, the
external Auditor met with the Audit Committee Chair
on an ad hoc basis to discuss matters pertinent to
the Committee as they arose.
The matters considered, monitored and reviewed
by the Committee during the course of the year
included the following:
ș the results announcements and the
Annual and Interim Reports;
Audit
Committee report
ș the Company’s accounting policies and
practices and the implementation of the
Managers’ valuation policy for investments
in unlisted (private) companies;
ș the regulatory changes impacting the Company;
ș the fairness, balance and understandability of
the Annual Report and Financial Statements and
whether it provided the information necessary
for shareholders to assess the Company’s
performance, business model and strategy;
ș the effectiveness of the Company’s
internal control environment;
ș the appointment, remuneration and terms of
engagement of the external Auditor;
ș the policy on the engagement of the external
Auditor to supply non-audit services;
ș the independence and objectivity of the
external Auditor and the effectiveness of
the audit process;
ș the need for the Company to have
its own internal audit function;
ș internal controls reports received from the
Managers and other service providers; and
ș the arrangements in place within Baillie Gifford
& Co whereby its staff may, in confidence,
raise concerns about possible improprieties in
matters of financial reporting or other matters.
Internal audit
The Committee continues to believe that the
compliance and internal controls systems and the
internal audit function in place within the Managers
provide sufficient assurance that a sound system
of internal control, which safeguards shareholders’
investment and the Company’s assets, is maintained.
An internal audit function, specific to the Company,
is therefore considered unnecessary.
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74
Financial reporting
The Committee considers that the most significant
area of risk likely to impact the Financial Statements
is the existence, ownership and valuation of
investments as they represent 99.3% of total assets.
Unlisted (private company) investments
The Committee reviewed the Managers’ valuation
approach for investments in unquoted companies
(as described on pages 34, 95 and 96) and approved
the valuations of the unlisted investments following
a detailed review of the valuation of each investment
and relevant challenge where appropriate.
The Auditor agreed the holdings in certificated form
to confirmations from the Company’s Custodian and
holdings of uncertificated unlisted investments to
confirmations from the relevant investee companies.
Listed investments
The majority of the investments are in quoted
securities and market prices are readily available
from independent external pricing sources. The
Committee reviewed Baillie Gifford’s report on
Internal Controls which details the controls in place
regarding the recording and pricing of investments.
The Managers agreed the prices of all the
listed investments at 31 May 2024 to external
price sources and the holdings were agreed to
confirmations from the Company’s Custodian or
Transfer Agent.
FRC Audit Quality Review
The Financial Reporting Council (‘FRC’) reviewed
the audit of the Company’s Financial Statements
for the year to 31 May 2023. The audit for the year
to 31 May 2023 was performed by KPMG LLP.
The FRC assessed the audit as good. A good quality
assessment indicates that no key or other findings
were identified.
Other matters
The Committee reviewed the Managers’ report on
Internal Controls which details the controls in place
regarding completeness and accurate recording of
investment income. The accounting treatment of any
special dividends received or receivable during the
year is reviewed by the Managers as they arise.
The Committee considered the factors that might
affect the Company’s viability over a period of five
years and its ability to continue as a going concern
for at least twelve months from the date of signing
of the Financial Statements, together with reports
from the Managers on the cash position and cash
flow projections of the Company, the liquidity of
its investment portfolio, compliance with debt
covenants, availability of borrowing facilities and
the Company’s ability to meet its obligations as they
fall due. The Committee also reviewed the viability
statement on page 53 and statement on going
concern on page 71. Following this assessment,
the Committee recommended to the Board the
appropriateness of the going concern basis in
preparing the Financial Statements and confirmed
the accuracy of the viability statement and
statement on going concern.
The Managers and Auditor confirmed to the
Committee that they were not aware of any material
misstatements in the context of the Financial
Statements as a whole and that the Financial
Statements are in accordance with applicable
law and accounting standards.
Internal controls and risk management
The Committee reviewed the effectiveness of the
Company’s risk management and internal controls
systems as described on pages 70 and 71. No
significant weaknesses were identified in the year
under review.
External Auditor
To fulfil its responsibility regarding the independence
of the external Auditor, the Committee reviewed:
ș the Auditor’s audit strategy for the year to
31 May 2024 which included a report from
the Auditor describing their arrangements to
manage Auditor independence and received
confirmation of their independence; and
ș the extent of non-audit services provided by
the external Auditor. There were no non-audit
fees paid to the external Auditor in the year
to 31 May 2024 or the year to 31 May 2023.
To assess the effectiveness of the external Auditor,
the Committee reviewed and considered:
ș the Auditor’s fulfilment of the agreed audit plan;
ș the Audit Quality Inspection report on
Ernst & Young LLP issued by the FRC’s
Audit Quality Review team (‘AQRT’); and
ș detailed discussion with audit personnel to
challenge audit processes and deliverables.
75
Baillie Gifford US Growth Trust plc
Non-audit service requests are considered on a case
by case basis.
To fulfil its responsibility for oversight of
the external audit process the Committee
considered and reviewed:
ș the Auditor’s engagement letter;
ș the Auditor’s proposed audit strategy;
ș the audit fee; and
ș a report from the Auditor on the
conclusion of the audit.
Ernst & Young LLP was appointed as the Company’s
Auditor, by the Directors, in October 2023. The
audit partner responsible for the audit is to be
rotated at least every five years in accordance with
professional and regulatory standards in order to
protect independence and objectivity and to provide
fresh challenge to the business. Mr Ahmer Huda,
the current audit partner, will continue as audit
partner until the conclusion of the 2028 audit. Ernst
& Young LLP has confirmed that it believes it is
independent within the meaning of regulatory and
professional requirements and that the objectivity
of the audit partner and staff is not impaired.
Having carried out the review described above,
the Committee is satisfied that the Auditor
has remained independent and effective
for the purposes of this year’s audit.
There are no contractual obligations restricting
the Committee’s choice of external Auditor.
Audit tender
The Committee acknowledges its responsibility
to monitor and, at suitable junctures, to test the
external audit market in order to ensure that
the provision of external audit services to the
Company remains of a high quality as well as cost
proportionate, by reference to developing industry
practice and expectations. The Committee is
aware that the scope, complexity and associated
cost of external audit engagements continues to
increase across the market, driven by a number of
factors including growing regulatory expectations,
new auditing standards, the significant volume
of work required to deliver a high-quality audit
and a challenging audit labour market.
Following the audit tender process conducted
during the year to 31 May 2023, the Board
unanimously decided to appoint Ernst & Young
LLP as Auditor with effect from the audit of the
Financial Statements for the year to 31 May 2024.
In recognition of underlying audit rotation
requirements, the Committee intends to undertake
a further tender process no later than the year to
31 May 2033.
Regulatory compliance
The Committee confirms that the Company is in
compliance with the requirements of the Statutory
Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities)
Order 2014, which relates to the frequency and
governance of tenders for the appointment of
the external Auditor and the setting of policy
on the provision of non-audit services.
Accountability and audit
The respective responsibilities of the Directors
and the Auditor in connection with the Financial
Statements are set out on pages 80 and 81.
On behalf of the Board
Graham Paterson
Audit Committee Chair
21 August 2024
Governance report
Annual Report and Financial Statements 2024
76
Directors’
remuneration report
Statement by the Chair
The Directors’ remuneration policy is subject to
shareholder approval every three years or sooner
if an alteration to the policy is proposed. The
remuneration policy, which is set out below, was
last approved at the Annual General Meeting in
September 2022 and no changes to the policy are
proposed. An ordinary resolution for the approval of
the remuneration policy will be put to the members
at the Annual General Meeting in September 2025.
For the year to 31 May 2024 the Directors’
remuneration was set at £30,755 per annum for
each Director other than the Chair, who received an
additional £11,665 per annum, Chair of the Audit
Committee, who received an additional £7,000 per
annum, and the Senior Independent Director who
received an additional £1,590 per annum.
The Board reviewed the level of fees during the
year and agreed that, with effect from 1 June 2024
the fee for the Chair would increase to £43,777,
the Directors’ fees would increase to £31,739, the
additional fee for the Chair of the Audit Committee
would increase to £7,224 and the additional fee for
the Senior Independent Director would increase to
£1,641. The fees were last increased on 1 June 2023.
This report has been prepared in
accordance with the requirements
of the Companies Act 2006.
77
Baillie Gifford US Growth Trust plc
Directors’ remuneration policy
The Board is composed wholly of non-executive
Directors, none of whom has a service contract with
the Company. There is no separate remuneration
committee and the Board as a whole considers
changes to Directors’ fees from time to time.
The Board’s policy is that the remuneration of
Directors should be set at a reasonable level that is
commensurate with the duties and responsibilities
of the role and consistent with the requirement
to attract and retain Directors of the appropriate
quality and experience. The Board believes that
the fees paid to the Directors should reflect the
experience of the Board as a whole, be fair and
should take account of the level of fees paid by
comparable investment trusts. Any views expressed
by shareholders on the fees being paid to Directors
will be taken into consideration by the Board when
reviewing the Board’s policy on remuneration. Baillie
Gifford & Co Limited, the Company Secretaries,
provides comparative information when the Board
considers the level of Directors’ fees.
Directors are not eligible for any other remuneration
or benefits apart from the reimbursement of
allowable expenses. There are no performance
conditions relating to Directors’ fees and there
are no long-term incentive schemes or pension
schemes. There is no notice period and no
compensation is payable on loss of office.
Limits on Directors’ remuneration
The fees for the non-executive Directors are
payable monthly in arrears and are determined
within the limit set out in the Company’s Articles of
Association which is currently £300,000 per annum
in aggregate. Any change to this limit requires
shareholder approval.
The basic and additional fees payable to Directors
in respect of the year ended 31 May 2024 and the
fees payable in respect of the year ending 31 May
2025 are set out in the table below. The fees payable
to the Directors in the subsequent financial periods
will be determined following an annual review of the
Directors’ fees.
Expected
fees for
the year
ending 31
May 2025
£
Fees for
the year
ended
31 May
2024
£
Chair’s fee 43,777 42,420
Non-executive Director fee 31,739 30,755
Additional fee for
Audit Committee Chair
7,224 7,000
Additional fee for the
Senior Independent Director
1,641 1,590
Total aggregate annual fees that can
be paid to the Directors in any year
under the Directors’ remuneration
policy, as set out in the Company’s
Articles of Association
300,000 300,000
Governance report
Annual Report and Financial Statements 2024
78
Annual report on remuneration
An ordinary resolution for the approval of this report
will be put to the members at the forthcoming
Annual General Meeting.
The law requires the Company’s Auditor to audit
certain of the disclosures provided in this report.
Where disclosures have been audited, they are
indicated as such. The Auditor’s opinion is included
in Ernst & Young LLP’s report on pages 83 to 89.
Directors’ remuneration for the year (audited)
The Directors who served during the year received the following remuneration in the form of fees and
taxable benefits. This represents the entire remuneration paid to the Directors.
For the year ended 31 May 2024 For the year ended 31 May 2023
Name
Fees
£
Taxable
benefits *
£
Total
£
Fees
£
Taxable
benefits *
£
Total
£
TJW Burnet (Chair) 42,420 – 42,420 40,400 – 40,400
GD Paterson (Audit Committee Chair) 37,755 – 37,755 34,340 – 34,340
SP Inglis (Senior Independent Director) 32,345 – 32,345 30,805 77 30,882
CRD van der Kuyl 30,755 – 30,755 29,290 157 29,447
RL Palmer 30,755 4,782 35,537 29,290 6,288 35,578
174,030 4,782 178,812 164,125 6,522 170,647
* Comprises expenses incurred by Directors in the course of travel to attend Board and Committee meetings held at the offices of Baillie Gifford & Co
Limited, the Company’s Secretaries. These amounts have been grossed up for income tax. The taxable benefits in the prior year were grossed up for
income tax and national insurance. The total taxable benefits payable to Directors for the year ended 31 May 2023 would have been £6,039 if prepared
on the same basis as the current year.
Annual percentage change in remuneration
This represents the annual percentage change in the total remuneration paid to the Directors.
Name
% change
from 2023
to 2024
% change
from 2022
to 2023
% change
from 2021
to 2022
% change
from 2020
to 2021
TJW Burnet 5.0 1.0 15.9 –
SP Inglis 4.7 1.3 24.5
#
–
GD Paterson 9.9 1.0 17.2 –
CRD van der Kuyl (appointed 1 June 2021) 4.4 1.5 –
*
n/a
RL Palmer (appointed 1 June 2021) (0.1) 11.7 –
*
n/a
*
These percentage movements reflect the Directors’ appointments in the period.
#
When the Board reviewed the level of fees during the year to 31 May 2021 an additional fee of £1,500 for the Senior Independent Director was
introduced for the first time. In addition to this, Director fees were increased from £24,500 to £29,000 due to the increase in private company holdings.
Directors’ interests (audited)
The Directors at the financial year end, and their
interests in the Company, were as shown below.
There have been no changes intimated in the
Directors’ interests up to 16 August 2024.
Name
Nature
of interest
Ordinary 1p
shares held at
31 May 2024
Ordinary 1p
shares held at
31 May 2023
TJW Burnet Beneficial 126,040 126,040
SP Inglis Beneficial 50,000 50,000
GD Paterson Beneficial 80,000 80,000
CRD van der Kuyl Beneficial 285,314 285,314
RL Palmer n/a – –
79
Baillie Gifford US Growth Trust plc
Company performance
The following graph compares, for the period from
23 March 2018, launch date and first trade date, to
31 May 2024, the share price total return (assuming
all dividends are reinvested) to the Company’s
ordinary shareholders compared to the total
shareholder return on a notional investment made
up of shares in the component parts of the FTSE
All-Share Index. This index was chosen for
comparison purposes as it is a widely used
measure of performance for UK listed companies.
Comparative index provided for information
purposes only.
Performance graph
The Company’s share price, FTSE All-Share Index
and comparative index
*
(figures have been rebased to 100 at 23 March 2018)
Statement of voting at Annual General Meeting
At the Annual General Meeting held on
16 September 2022 of the proxy votes received
in respect of the Directors’ remuneration policy,
99.77% were in favour, 0.20% were against
and votes withheld were 0.03%. At the Annual
General Meeting held on 18 September 2023,
of the proxy votes received in respect of the
Directors’ remuneration report, 99.66% were
in favour, 0.28% were against and votes withheld
were 0.06%.
Relative importance of spend on pay
As the Company has no employees, the Directors
do not consider it appropriate to present a table
comparing remuneration paid to employees with
distributions to shareholders. The Directors’
remuneration for the year and the expected fees
for the year to 31 May 2025 are set out on page 77.
The table below shows the actual expenditure during
the year in relation to Directors’ remuneration and
distributions to shareholders.
2024
£’000
2023
£’000
Change
%
Directors’
remuneration
179 171 4.7
Share buy-backs 14,550 – n/a
Directors’ service details
Name
Date of
appointment
Due date for
re-election
TJW Burnet 5 March 2018 AGM in 2024
SP Inglis 5 March 2018 AGM in 2024
CRD van der Kuyl 1 June 2021 AGM in 2024
RL Palmer 1 June 2021 AGM in 2024
GD Paterson 5 March 2018 AGM in 2024
50
100
150
200
250
300
350
400
2024202320222021202020192018
BG US Growth share price
Comparative index
*
FTSE All-Share Index
Past performance is not a guide to future
performance.
Approval
The Directors’ remuneration report on pages
76 to 79 was approved by the Board of Directors
and signed on its behalf on 21 August 2024.
Tom Burnet
Chair
Source: LSEG/Baillie Gifford and relevant underlying index providers. See
disclaimer on page 120.
All figures are total returns (see Glossary of terms and alternative
performance measures on pages 124 to 127).
*S&P 500 Index total return (in sterling terms). See disclaimer on page 120.
Governance report
Annual Report and Financial Statements 2024
80
Statement of
Directors’ responsibilities
The Directors are responsible for preparing the
Annual Report and the Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under
that law they have elected to prepare the Financial
Statements in accordance with applicable law and
United Kingdom Accounting Standards including
FRS 102 ‘The Financial Reporting Standard
applicable in the UK and Republic of Ireland’.
Under company law the Directors must not approve
the Financial Statements unless they are satisfied
that they give a true and fair view of the state of
affairs of the Company and of the profit or
loss of the Company for that period. In preparing the
Financial Statements, the Directors are required to:
ș select suitable accounting policies and then
apply them consistently;
ș make judgements and accounting estimates that
are reasonable and prudent;
ș state whether applicable United Kingdom
Accounting Standards have been followed,
subject to any material departures disclosed and
explained in the Financial Statements;
ș assess the Company’s ability to continue as a
going concern, disclosing, as applicable, matters
related to going concern; and
ș use the going concern basis of accounting
unless they either intend to liquidate the
company or to cease operations, or have no
realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose
with reasonable accuracy at any time the financial
position of the Company and enable them to
ensure that its financial statements comply with the
Companies Act 2006. They are responsible for such
internal controls as they determine are necessary to
enable the preparation of financial statements that
are free from material misstatement, whether due
to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
Under applicable laws and regulations, the Directors
are also responsible for preparing a Strategic
report, Directors’ report, a Directors’ remuneration
report and a Corporate governance statement that
complies with that law and those regulations.
The Directors have delegated responsibility to the
Managers for the maintenance and integrity of the
corporate and financial information included on the
Company website. Legislation in the United Kingdom
governing the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
81
Baillie Gifford US Growth Trust plc
Responsibility statement of the Directors in
respect of the Annual Financial Report
We confirm that, to the best of our knowledge:
ș the Financial Statements, which have been
prepared in accordance with applicable law and
United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting
Practice) including FRS 102 ‘The Financial
Reporting Standard applicable in the UK and
Republic of Ireland’, give a true and fair view of
the assets, liabilities, financial position and net
return of the Company;
ș the Annual Report and Financial Statements
taken as a whole is fair, balanced and
understandable and provide the information
necessary for shareholders to assess the
Company’s performance, business model and
strategy; and
ș the Strategic report and Directors’ report
include a fair review of the development and
performance of the business and the position of
the Company, together with a description of the
principal risks and uncertainties that it faces.
On behalf of the Board
Tom Burnet
21 August 2024
Financial
report
The Financial Statements for the
year to 31 May 2024 are set out
on pages 90 to 111 and have been
prepared in accordance with
FRS 102 ‘The Financial Reporting
Standard applicable in the UK
and Republic of Ireland’.
83
Baillie Gifford US Growth Trust plc
Independent
Auditor’s report
to the members of Baillie Gifford US Growth Trust plc
Opinion
We have audited the financial statements of Baillie
Gifford US Growth Trust plc (the ‘Company) for the
year ended 31 May 2024 which comprise the Income
Statement, Balance Sheet, Statement of Changes
in Equity, Cash Flow Statement, and the related
notes 1 to 17, including the principal accounting
policies. The financial reporting framework that
has been applied in their preparation is applicable
law and United Kingdom Accounting Standards
including FRS 102 ‘The Financial Reporting Standard
applicable in the UK and Republic of Ireland’ (United
Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
ș give a true and fair view of the Company’s affairs
as at 31 May 2024 and of its profit for the year
then ended;
ș have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and
ș have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities
under those standards are further described in the
Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the
audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to public
interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements.
The non-audit services prohibited by the FRC’s
Ethical Standard were not provided to the Company
and we remain independent of the Company in
conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have
concluded that the Directors’ use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of
the Directors’ assessment of the Company’s ability
to continue to adopt the going concern basis of
accounting included:
ș Confirming our understanding of the Company’s
going concern assessment process by engaging
with the Directors and the Company Secretary
to determine if all key factors were considered
in their assessment. We considered whether
the factors taken account of in the Directors’
assessment addressed those matters which we
considered important.
ș Inspecting the Directors’ assessment of going
concern, including the revenue forecast, for
the period to 21 August 2025 which is at least
12 months from the date the financial statements
were authorised for issue. The Company has
concluded that it is able to continue to meet its
financial obligations as they fall due.
ș Reviewing the factors and assumptions applied
to the Company’s forecast, liquidity review and
covenant compliance assessment as prepared
by the Company Secretary. We considered
the appropriateness of the methods, used to
calculate the revenue forecast and the liquidity
assessment and determined, through testing
of the methodology and calculations, that the
methods, inputs and assumptions utilised were
appropriate to be able to make an assessment for
the Company.
Financial report
Annual Report and Financial Statements 2024
84
ș Assessing the risk of breaching the debt
covenants as a result of a reduction in the value
of the Company’s portfolio. We calculated and
reviewed the Company’s compliance with debt
covenants throughout the year, validated the
inputs used to the underlying information and
we performed reverse stress testing in order to
identify what factors would lead to the Company
breaching the financial covenants.
ș Considering the mitigating factors that are
within the control of the Company. We reviewed
the Company’s assessment of the liquidity of
investments held and evaluated the Company’s
ability to sell those investments in order to cover
working capital requirements should revenue
decline significantly.
ș Reviewing the Company’s going concern
disclosures included in the annual report to assess
whether the disclosures were appropriate and in
conformity with the reporting standards.
Based on the work we have performed, we have
not identified any material uncertainties relating to
events or conditions that, individually or collectively,
may cast significant doubt on the Company’s ability
to continue as a going concern for a period to
21 August 2025, which is at least 12 months from
the approval of these financial statements on
21 August 2024.
In relation to the Company’s reporting on how it has
applied the UK Corporate Governance Code,
we have nothing material to add or draw attention
to in relation to the Directors’ statement in the
financial statements about whether the Directors
considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are described
in the relevant sections of this report. However,
because not all future events or conditions can be
predicted, this statement is not a guarantee as to the
Company’s ability to continue as a going concern.
Overview of our audit approach
Key audit matters ș Risk of incorrect valuation or ownership
of the investment portfolio
ș Risk of incomplete or inaccurate revenue
recognition, including the classification
of special dividends as revenue or
capital in the Income Statement
Materiality ș Overall materiality of £6.44m which
represents 1% of shareholders’ funds
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of
materiality and our allocation of performance
materiality determine our audit scope for the
Company. This enables us to form an opinion on
the financial statements. We take into account
size, risk profile, the organisation of the Company
and effectiveness of controls, the potential impact
of climate change and changes in the business
environment when assessing the level of work to be
performed. All audit work was performed directly
by the audit engagement team which included our
valuation specialists.
Climate change
There has been increasing interest from stakeholders
as to how climate change will impact companies.
The Company has determined that climate problems
may impact investee company valuations and in turn
the Company’s own share price. This is explained
on page 49 in the principal and emerging risks
section, which form part of the “Other information”,
rather than the audited financial statements. Our
procedures on these disclosures therefore consisted
solely of considering whether they are materially
consistent with the financial statements, or our
knowledge obtained in the course of the audit or
otherwise appear to be materially misstated.
Our audit effort in considering climate change
was focused on the adequacy of the Company’s
disclosures in the financial statements as set out in
Note 1a and conclusion that there was no further
impact of climate change to be taken into account as
the investments are valued based on market pricing
as required by FRS 102. Unquoted investments
are valued with reference to recent transaction
prices, market approaches using comparable
trading multiples and benchmark performance and
therefore are reflective of market participants views.
We also challenged the Directors’ considerations of
climate change in their assessment of viability and
associated disclosures.
85
Baillie Gifford US Growth Trust plc
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified. These matters included those which
had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion
on these matters.
Risk Our response to the risk
Key observations
communicated to
the Audit Committee
Incorrect valuation or ownership
of the investment portfolio
(as described on page 74 in the
report of the Audit Committee and
as per the accounting policy set
out on page 95).
The valuation of the investment
portfolio at 31 May 2024 was
£678.23m (2023: £605.91m)
consisting of quoted investments
with an aggregate value of £447.04m
(2023: £396.27m) and unquoted
investments with an aggregate value
of £231.19m (2023: £209.64m).
The valuation of the assets held in
the investment portfolio is the key
driver of the Company’s net asset
value and total return. Incorrect
investment pricing or a failure to
maintain proper legal title to the
investments held by the Company
could have a significant impact on
the portfolio valuation and the return
generated for shareholders.
The fair value of quoted investments
is determined by reference to
bid value or the last traded price
depending on the convention of the
exchange on which the investment
is quoted.
Unquoted investments are valued
at fair value by the Directors
following a detailed review and
appropriate challenge of the
valuations proposed by the Baillie
Gifford private company valuations
group (‘the valuation group’). The
unquoted investment policy applies
methodologies consistent with the
International Private Equity and
Venture Capital Valuation (‘IPEV’)
guidelines and FRS 102.
The valuation of unquoted
investments, and the resultant
impact on the unrealised gains/
(losses), is the area requiring the
most significant judgement and
estimation in the preparation of the
financial statements and has been
classified as an area of fraud risk as
highlighted below on page 88.
We performed the following procedures:
We obtained an understanding of Baillie Gifford’s processes and
controls surrounding legal title and pricing of quoted and unquoted
investments by performing walkthrough procedures in which we
evaluated the design of controls.
For all quoted investments in the portfolio, we compared the market
prices and exchange rates applied to an independent pricing
vendor and recalculated the investment valuations as at the year-
end.
We reviewed the prices for all quoted investments in the portfolio
near the year end of the Company to identify any stale prices.
Our testing of quoted investments did not identify any prices
for which there was no active market.
For the unquoted investments held as at 31 May 2024 the audit
team, with the assistance of our valuation specialists, reviewed and
challenged a sample of the the valuations. This included:
ș Reviewing the valuation papers prepared by the valuation group
to gain an understanding of, and comment on, the valuation
methodologies and assumptions.
ș We have assessed the competence, capability and objectivity
of the valuations group.
ș Discussing the unquoted valuations with the valuations group
to understand their valuation approach and a follow up meeting
to challenge certain areas of their approach, documentation
and valuation conclusions.
ș Assessing whether the valuations have been performed in line
with the valuation approaches as set out in the International
Private Equity and Venture Capital (‘IPEV’) guidelines and
FRS 102.
ș Assessing the appropriateness of the data inputs (including
supporting evidence) and challenging the assumptions used
to support the valuations.
ș Assessing other facts and circumstances, such as market
movement and comparative company information, that have an
impact on the fair market value of the investments and assessing
whether managements, valuation is reasonable.
We recalculated the unrealised gains/(losses) on investments as at
the year-end using the book-cost reconciliation.
We compared the Company’s investment holdings at 31 May 2024
to independent confirmations received directly from the Company’s
Custodian or from the investee company.
The results of
our procedures
identified no material
misstatement in
relation to the risk of
incorrect valuation
or ownership of the
investment portfolio.
Financial report
Annual Report and Financial Statements 2024
86
Risk Our response to the risk
Key observations
communicated to
the Audit Committee
Incomplete or inaccurate revenue
recognition, including the
classification of special dividends
as revenue or capital items in the
Income Statement (per the Audit
Committee report set out on page
74 and the accounting policy set
out on page 96).
The total revenue for the year
to 31 May 2024 was £0.60m
(2023: £0.85m).
There is a risk of incomplete or
inaccurate recognition of revenue
through the failure to recognise
proper income entitlements or to
apply an appropriate accounting
treatment.
When received, the Directors may
be required to exercise judgement
in determining whether income
receivable in the form of special
dividends should be classified
as ‘revenue’ or ‘capital’ in the
Income Statement and has been
classified as an area of fraud risk as
highlighted below on page 88.
We have performed the following procedures:
We obtained an understanding of Baillie Gifford’s processes and
controls surrounding revenue recognition performing walkthrough
procedures.
For all dividends, we recalculated the income by multiplying the
investment holdings at the ex-dividend date, traced from the
accounting records, by the dividend per share, which was agreed
to an independent data vendor. We agreed a sample to bank
statements and, where applicable, we also agreed the exchange
rates to an external source.
To test completeness of recorded income, we tested that dividends
had been recorded for a sample of investee companies with
reference to investee company announcements obtained from
an independent data vendor.
For all dividends accrued at the year end, we reviewed the
investee company announcements to assess whether the dividend
obligation arose prior to 31 May 2024. We agreed the dividend rate
to corresponding announcements made by the investee company,
recalculated the dividend amount receivable and confirmed this
was consistent with cash received as shown on post year end
bank statements.
For all investments held during the year, we compared the type of
dividends paid with reference to an external data source to identify
any which were ‘special’. We confirmed there were no special
dividends in the accounting period.
The results of
our procedures
identified no material
misstatement in
relation to the risk
of incomplete or
inaccurate revenue
recognition.
In the prior year, the predecessor did not include a key audit matter on revenue recognition or the valuation
of quoted assets but did include a key audit matter on unlisted investments. There have been no other
changes to the areas of audit focus raised in the above risk table.
Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably
be expected to influence the economic decisions
of the users of the financial statements. Materiality
provides a basis for determining the nature and
extent of our audit procedures.
We determined materiality for the company to be
£6.44 million, which is 1% of shareholders’ funds.
We believe that shareholders’ funds provides us
with a materiality aligned to the key measure of the
Company’s performance.
Performance materiality
The application of materiality at the individual
account or balance level. It is set at an amount to
reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together
with our assessment of the Company’s overall
control environment, our judgement was that
performance materiality was 75% of our
planning materiality, namely £4.83m. We have set
performance materiality at this percentage due to
our experience of working in prior years with the
key service providers that indicates a lower risk of
misstatements, both corrected and uncorrected.
Given the importance of the distinction between
revenue and capital for investment trusts, we have
applied a separate testing threshold for the revenue
column of the Income Statement of £0.32m, being
our reporting threshold.
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Baillie Gifford US Growth Trust plc
Reporting threshold
An amount below which identified misstatements
are considered as being clearly trivial.
We agreed with the Audit Committee that we would
report to them all uncorrected audit differences
in excess of £0.32m (2023 predecessor auditor:
£0.31m) which is set at 5% of planning materiality,
as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against
both the quantitative measures of materiality
discussed above and in light of other relevant
qualitative considerations in forming our opinion.
Other information
The other information comprises the information
included in the annual report other than the financial
statements and our auditor’s report thereon. The
Directors are responsible for the other information
contained within the annual report.
Our opinion on the financial statements does not
cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information
and, in doing so, consider whether the other
information is materially inconsistent with the
financial statements or our knowledge obtained in
the course of the audit or otherwise appears to be
materially misstated. If we identify such material
inconsistencies or apparent material misstatements,
we are required to determine whether this gives
rise to a material misstatement in the financial
statements themselves. If, based on the work we
have performed, we conclude that there is a material
misstatement of the other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the
course of the audit:
ș the information given in the Strategic report and
the Directors’ report for the financial year for
which the financial statements are prepared is
consistent with the financial statements; and
ș the Strategic report and Directors’ reports have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report
by exception
In the light of the knowledge and understanding
of the Company and its environment obtained in
the course of the audit, we have not identified
material misstatements in the Strategic report
or Directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
ș adequate accounting records have not been kept,
or returns adequate for our audit have not been
received from branches not visited by us; or
ș the financial statements and the part of the
Directors’ remuneration report to be audited are
not in agreement with the accounting records and
returns; or
ș certain disclosures of Directors’ remuneration
specified by law are not made; or
ș we have not received all the information and
explanations we require for our audit.
Corporate governance statement
We have reviewed the Directors’ statement in
relation to going concern, longer-term viability and
that part of the Corporate governance statement
relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code
specified for our review by the UK Listing Rules.
Financial report
Annual Report and Financial Statements 2024
88
Based on the work undertaken as part of our audit,
we have concluded that each of the following
elements of the Corporate Governance Statement is
materially consistent with the financial statements or
our knowledge obtained during the audit:
ș Directors’ statement with regards to the
appropriateness of adopting the going concern
basis of accounting and any material uncertainties
identified set out on page 71;
ș Directors’ explanation as to their assessment
of the Company’s prospects, the period this
assessment covers and why the period is
appropriate set out on page 53;
ș Directors’ statement on whether they have a
reasonable expectation that the Company will
be able to continue in operation and meets its
liabilities set out on page 71;
ș Directors’ statement on fair, balanced and
understandable set out on pages 80 and 81;
ș Board’s confirmation that it has carried out a
robust assessment of the emerging and principal
risks set out on pages 48 to 52;
ș the section of the annual report that describes
the review of effectiveness of risk management
and internal control systems set out on pages
70 and 71; and
ș the section describing the work of the Audit
Committee set out on page 73.
Responsibilities of Directors
As explained more fully in the Directors’
responsibilities statement set out on page 80, the
Directors are responsible for the preparation of the
financial statements and for being satisfied that
they give a true and fair view, and for such internal
controls as the Directors determine are necessary
to enable the preparation of financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Company’s
ability to continue as a going concern, disclosing,
as applicable, matters related to going concern
and using the going concern basis of accounting
unless the Directors either intend to liquidate the
Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of the financial statements.
Explanation as to what extent the audit
was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect irregularities, including fraud. The
risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent
to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
However, the primary responsibility for the
prevention and detection of fraud rests with both
those charged with governance of the Company
and management.
ș We obtained an understanding of the legal and
regulatory frameworks that are applicable to the
Company and determined that the most significant
are United Kingdom Generally Accepted
Accounting Practice, the Companies Act 2006,
the UK Listing Rules, UK Corporate Governance
Code, the Association of Investment Companies’
Corporate Governance Code and Statement of
Recommended Practice, Section 1158 of the
Corporation Tax Act 2010 and The Companies
(Miscellaneous Reporting) Regulations 2018.
ș We understood how the Company is complying
with those frameworks through discussions with
the Audit Committee and Company Secretary and
review of Board minutes.
89
Baillie Gifford US Growth Trust plc
ș We assessed the susceptibility of the Company’s
financial statements to material misstatement,
including how fraud might occur by considering
the key risks impacting the financial statements.
We identified a fraud risk with respect to the
incomplete or inaccurate revenue recognition
through incorrect classification of special
dividends as revenue or capital items in the
Income Statement. We also identified a fraud
risk with respect to the incorrect valuation of the
unquoted investments and the resultant impact
on unrealised gains/(losses). Further discussion
of our approach is set out in the section on key
audit matters above which include our response
to the fraud risks and other areas of audit focus.
ș Based on this understanding we designed our
audit procedures to identify non-compliance
with such laws and regulations. Our procedures
involved review of the reporting to the Directors
with respect to the application of the documented
policies and procedures and review of the financial
statements to ensure compliance with the
reporting requirements of the Company.
A further description of our responsibilities for
the audit of the financial statements is located
on the Financial Reporting Council’s website at
frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Other matters we are required to address
Following the recommendation from the Audit
Committee, we were appointed by the Company to
audit the financial statements for the year ending 31
May 2024 and subsequent financial periods.
The period of total uninterrupted engagement
including previous renewals and reappointments is
1 year, covering the year ending 31 May 2024.
The audit opinion is consistent with the additional
report to the Audit Committee.
Use of our report
This report is made solely to the Company’s
members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state
to the Company’s members those matters we are
required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s
members as a body, for our audit work, for this
report, or for the opinions we have formed.
Ahmer Huda (Senior statutory auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
London
21 August 2024
Financial report
Annual Report and Financial Statements 2024
90
Income
statement
The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital return columns
are prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing operations.
A Statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement.
The accompanying notes on pages 94 to 111 are an integral part of the Financial Statements.
For the year ended 31 May
Notes
2024
Revenue
£’000
2024
Capital
£’000
2024
Total
£’000
2023
Revenue
£’000
2023
Capital
£’000
2023
Total
£’000
Gains/(losses) on investments 9 – 95,288 95,288 – (10,169) (10,169)
Currency gains/(losses) 15 – 878 878 – (700) (700)
Income 2 603 – 603 850 – 850
Investment management fee 3 (3,581) – (3,581) (3,345) – (3,345)
Other administrative expenses 4 (726) – (726) (670) – (670)
Net return before finance costs
and taxation
(3,704) 96,166 92,462 (3,165) (10,869) (14,034)
Finance costs of borrowings 5 (2,528) – (2,528) (1,482) – (1,482)
Net return before taxation (6,232) 96,166 89,934 (4,647) (10,869) (15,516)
Tax on ordinary activities 6 (50) – (50) (71) – (71)
Net return after taxation (6,282) 96,166 89,884 (4,718) (10,869) (15,587)
Net return per ordinary share 7 (2.07p) 31.73p 29.66p (1.55p) (3.56p) (5.11p)
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Baillie Gifford US Growth Trust plc
* Net asset value per ordinary share after deducting borrowings at book value. See Glossary of terms and alternative performance measures
on pages 124 to 127.
The accompanying notes on pages 94 to 111 are an integral part of the Financial Statements.
Balance
sheet
As at 31 May
Notes
2024
£’000
2024
£’000
2023
£’000
2023
£’000
Fixed assets
Investments held at fair value through profit or loss 9 678,234 605,908
Current assets
Debtors 10 605 657
Cash and cash equivalents 17 6,620 3,440
7,225 4,097
Creditors
Amounts falling due within one year
11 (41,526) (41,406)
Net current liabilities
(34,301) (37,309)
Net assets 643,933 568,599
Capital and reserves
Share capital 12 3,073 3,073
Share premium account 13 250,827 250,827
Special distributable reserve 13 168,942 168,942
Capital reserve 13 247,547 165,931
Revenue reserve 13 (26,456) (20,174)
Total shareholders’ funds 643,933 568,599
Net asset value per ordinary share
*
14 216.65p 186.33p
The Financial Statements of Baillie Gifford US Growth Trust plc (Company Registration number 11194060)
were approved and authorised for issue by the Board and were signed on 21 August 2024.
Tom Burnet
Chair
Financial report
Annual Report and Financial Statements 2024
92
Statement of
changes in equity
The accompanying notes on pages 94 to 111 are an integral part of the Financial Statements.
For the year ended 31 May 2024
Notes
Share
capital
£’000
Share
premium
account
£’000
Special
distributable
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
Shareholders’ funds at 1 June 2023 3,073 250,827 168,942 165,931 (20,174) 568,599
Ordinary shares bought back into treasury 13 – – – (14,550) – (14,550)
Net return after taxation – – – 96,166 (6,282) 89,884
Shareholders’ funds at 31 May 2024 3,073 250,827 168,942 247,547 (26,456) 643,933
For the year ended 31 May 2023
Notes
Share
capital
£’000
Share
premium
account
£’000
Special
distributable
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
Shareholders’ funds at 1 June 2022 3,073 250,827 168,942 176,800 (15,456) 584,186
Ordinary shares bought back into treasury 13 – – – – – –
Net return after taxation – – – (10,869) (4,718) (15,587)
Shareholders’ funds at 31 May 2023 3,073 250,827 168,942 165,931 (20,174) 568,599
93
Baillie Gifford US Growth Trust plc
The accompanying notes on pages 94 to 111 are an integral part of the Financial Statements.
Cash flow
statement
For the year ended 31 May
Notes
2024
£’000
2024
£’000
2023
£’000
2023
£’000
Cash flows from operating activities
Net return before taxation 89,934 (15,516)
Adjustments to reconcile company profit before tax
to net cash flow from operating activities
Net (gains)/losses on investments (95,288) 10,169
Currency (gains)/losses (878) 700
Finance costs of borrowings 2,528 1,482
Other capital movements
Overseas withholding tax incurred (50) (71)
Changes in debtors 51 (298)
Changes in creditors 191 (10)
Cash from operations* (3,512) (3,544)
Finance costs paid (2,308) (1,481)
Net cash outflow from operating activities (5,820) (5,025)
Cash flows from investing activities
Acquisitions of investments (95,852) (63,894)
Disposals of investments 118,814 69,383
Net cash inflow from investing activities 22,962 5,489
Cash flows from financing activities
Ordinary shares bought back into treasury
and stamp duty thereon
13 (13,769) –
Bank loans drawn down 20,577 –
Bank loans repaid (20,577) –
Net cash outflow from financing activities (13,769) –
Increase in cash and cash equivalents 3,373 464
Exchange movements (193) (31)
Cash and cash equivalents at 1 June 15 3,440 3,007
Cash and cash equivalents at 31 May 15 6,620 3,440
*
Cash from operations includes dividends received of £331,000 (2023 – £472,000) and interest received of £35,000 (2023 – £154,000).
Financial report
Annual Report and Financial Statements 2024
94
Notes to the
Financial Statements
Baillie Gifford US Growth Trust plc was incorporated
under the Companies Act 2006 in England and
Wales as a public limited company with registered
number 1194060. The Company is an investment
company within the meaning of section 833 of the
Companies Act 2006 and carries on business as an
investment trust.
01 Principal accounting policies
The Financial Statements for the year to 31 May 2024 have
been prepared in accordance with FRS 102 ‘The Financial
Reporting Standard applicable in the UK and Republic of
Ireland’ and on the basis of the accounting policies set out
below which are unchanged from the prior year and have
been applied consistently.
a. Basis of accounting
All of the Company’s operations are of a continuing
nature and the Financial Statements are prepared on a
going concern basis under the historical cost convention,
modified to include the revaluation of fixed asset
investments at fair value through profit or loss, and on the
assumption that approval as an investment trust under
section 1158 of the Corporation Tax Act 2010 and the
Investment Trust (Approved Company) (Tax) Regulations
2011 will be retained. The Board has, in particular,
considered the impact of heightened market volatility
due to macroeconomic and geopolitical concerns but
does not believe the Company’s going concern status is
affected. The Company’s assets, the majority of which
are investments in quoted securities which are readily
realisable, exceed its liabilities significantly. All borrowings
require the prior approval of the Board. Gearing levels
and compliance with borrowing covenants are reviewed
by the Board on a regular basis. As at 31 May 2024 the
Company had a net current liability of £34.3 million
primarily as a result of the two US$25 million revolving
credit facilities. The Company has continued to comply
with the investment trust status requirements of section
1158 of the Corporation Tax Act 2010 and the Investment
Trust (Approved Company) (Tax) Regulations 2011.
Accordingly, the Financial Statements have been prepared
on the going concern basis as it is the Directors’ opinion,
having assessed the principal and emerging risks and other
matters set out in the viability statement on page 53 which
assesses the prospects of the Company over a period of
five years, that the Company will continue in operational
existence for a period of at least twelve months from the
date of approval of these Financial Statements.
The Financial Statements have been prepared in
accordance with the Companies Act 2006, applicable
UK Accounting Standards, the Association of Investment
Companies (‘AIC’) Statement of Recommended Practice
‘Financial Statements of Investment Trust Companies
and Venture Capital Trusts’ issued in November 2014 and
updated in July 2022 with consequential amendments,
except for certain financial information required by
paragraph 82(c) regarding unquoted holdings with a value
greater than 5% of the portfolio or included in the top 10,
where information is not publicly available (see note 9 on
page 101). In order to reflect better the activities of the
Company and in accordance with guidance issued by the
AIC, supplementary information which analyses the profit
and loss account between items of a revenue and capital
nature has been presented in the Income Statement.
Although the Company invests in US dollar investments,
the Directors have determined the Company’s functional
currency to be sterling, as the Company’s share capital is
denominated in sterling, the entity is listed on a sterling
stock exchange in the UK, the Company’s shareholders
are predominantly based in the UK and the Company
and its Managers, who are subject to the UK’s regulatory
environment, are also UK based.
Financial assets and financial liabilities are recognised
in the Company’s Balance Sheet when it becomes a party
to the contractual provisions of the instrument.
b. Significant accounting estimates and judgements
The preparation of the Financial Statements requires
the use of estimates, assumptions and judgements.
These estimates, assumptions and judgements affect the
reported amounts of assets and liabilities at the reporting
date. While estimates are based on best judgement
using information and financial data available, the actual
outcome may differ from these estimates. The key
sources of estimation and uncertainty relate to the fair
valuation of the unlisted investments.
Judgements
The Directors consider that the preparation of the
Financial Statements involves the following key
judgements:
(i) the determination of the functional currency of the
Company as sterling (see rationale in 1a above); and
(ii) the fair valuation of the unlisted investments.
The key judgements in the fair valuation process are:
(i) the Managers’ determination of the appropriate
application of the International Private Equity and Venture
Capital Valuation (‘IPEV’) Guidelines 2022 to each
unlisted investment;
95
Baillie Gifford US Growth Trust plc
(ii) the Directors’ consideration of whether each fair
value is appropriate following detailed review and
challenge. The judgement applied in the selection of the
methodology used (see 1c below) for determining the fair
value of each unlisted investment can have a significant
impact upon the valuation;
(iii) the selection of appropriate comparable companies
in order to derive revenue multiples and meaningful
relationships between enterprise value, revenue and
earnings growth. Comparable companies are chosen
on the basis of their business characteristics and growth
patterns; and
(iv) the selection of a revenue metric (either historical or
forecast).
Estimates
The key estimate in the Financial Statements is the
determination of the fair value of the unlisted investments
by the Managers for consideration by the Directors. This
estimate is key as it significantly impacts the valuation of
the unlisted investments at the Balance Sheet date. The
fair valuation process involves estimation using subjective
inputs that are unobservable (i.e. for which market data is
unavailable). The main estimates involved in the selection
of the valuation process inputs are:
(i) the application of an appropriate discount factor to
reflect the reduced liquidity of unlisted companies versus
their listed peers;
(ii) the estimation of the probability assigned to an
exit being through an initial public offering (‘IPO’) or a
company sale;
(iii) the selection of an appropriate industry benchmark
index to assist with the valuation validation or the
application of valuation adjustments, particularly in the
absence of established earnings or closely comparable
peers; and
(iv) the calculation of valuation adjustments derived from
milestone analysis (i.e. incorporating operational success
against the plan/forecasts of the business into the
valuation).
Fair value estimates are cross-checked to alternative
estimation methods where possible to improve the
robustness of the estimates. As the valuation outcomes
may differ from the fair value estimates a price sensitivity
analysis is provided in Other Price Risk Sensitivity in note
17 on pages 106 to 109 to illustrate the effect on the
Financial Statements of an over or under estimation of
fair values. The risk of an over or under estimation of fair
values is greater when methodologies are applied using
more subjective inputs.
Assumptions
The determination of fair value by the Managers involves
key assumptions dependent upon the valuation technique
used. As explained in 1c below, the primary technique
applied under the IPEV Guidelines is the multiples
approach. Where the multiples approach is used the
valuation process recognises also, as stated in the
IPEV Guidelines, that the price of a recent investment
may be an appropriate starting point for estimating fair
value. The multiples approach involves subjective inputs
and therefore presents a greater risk of over or under
estimation and particularly in the absence of a recent
transaction.
The key assumptions for the multiples approach are
that the selection of comparable companies provides a
reasonable basis for identifying relationships between
enterprise value, revenue and growth to apply in the
determination of fair value. Other assumptions include the
discount applied for reduced liquidity versus listed peers.
Valuations are cross-checked for reasonableness to
alternative market-based approaches or benchmark index
movements as appropriate.
c. Investments
The Company’s investments are classified, recognised
and measured at fair value through profit or loss in
accordance with sections 11 and 12 of FRS 102. Changes
in fair value of investments and gains and losses on
disposal are recognised as capital items in the Income
Statement.
Recognition and initial investment
Purchases and sales of investments are accounted for on
a trade date basis. Upon initial recognition investments
in securities are recognised at fair value, which is
transaction value. Expenses incidental to purchase and
sale are written off to capital at the time of acquisition or
disposal. All investments are classified as valued at fair
value through profit or loss upon initial recognition and
are measured at subsequent reporting dates at fair value.
Measurement and valuation
Listed investments
The fair value of listed security investments is the last
traded price on recognised overseas exchanges.
Unlisted investments
Unlisted investments are valued at fair value by the
Directors following a detailed review and appropriate
challenge of the valuations proposed by the Managers.
The Managers’ unlisted investment valuation policy
applies techniques consistent with the IPEV Guidelines.
The techniques applied are predominantly market-based
approaches. The market-based approaches available
under the IPEV guidelines are set out below and are
followed by an explanation of how they are applied to the
Company’s unlisted portfolio:
ș Multiples;
ș Industry Valuation Benchmarks; and
ș Available Market Prices.
The nature of the unlisted portfolio currently will influence
the valuation technique applied. The valuation approach
recognises that, as stated in the IPEV Guidelines, the
price of a recent investment, if resulting from an orderly
transaction, generally represents fair value as at the
transaction date and may be an appropriate starting point
for estimating fair value at subsequent measurement
dates. However, consideration is given to the facts and
circumstances as at the subsequent measurement date,
including changes in the market or performance of the
investee company. Milestone analysis is used where
appropriate to incorporate the operational progress of
the investee company into the valuation. Additionally, the
background to the transaction must be considered. As
a result, various market-based techniques are employed
to assess the valuations particularly in those companies
with established revenues. Discounted cashflows are used
where appropriate. An absence of relevant industry peers
may preclude the application of the industry valuation
Financial report
Annual Report and Financial Statements 2024
96
benchmarks technique and an absence of observable
prices may preclude the available market prices approach.
All valuations are cross-checked for reasonableness by
employing relevant alternative techniques.
The unlisted investments are valued according to a three
monthly cycle of measurement dates. The fair value of
the unlisted investments will be reviewed before the
next scheduled three monthly measurement date on the
following occasions:
(i) at the year end and half year end of the Company; and
(ii) where there is an indication of a change in fair value as
defined in the IPEV Guidelines (commonly referred to as
‘trigger’ events).
Gains and losses
Gains and losses on investments, including those
arising from foreign currency exchange differences, are
recognised in the Income Statement as capital items.
The Managers monitor the investment portfolio on a fair
value basis and use the fair value basis for investments
in making investment decisions and monitoring financial
performance.
d. Cash and cash equivalents
Cash and cash equivalents include cash in hand and
deposits repayable on demand. Deposits are repayable
on demand if they can be withdrawn at any time without
notice and without penalty or if they have a maturity or
period of notice of not more than one working day.
e. Financial liabilities
Bank loans are classified as loans and are measured at
amortised cost. They are initially recorded at the proceeds
received net of direct costs.
f. Income
(i) Income from equity investments is brought into account
on the date on which the investments are quoted ex-
dividend or, where no ex-dividend date is quoted, when
the Company’s right to receive payment is established.
(ii) If scrip dividends are taken in lieu of dividends in cash,
the net amount of the cash dividend declared is credited
to the revenue account. Any excess or shortfall in the
value of the shares received over the amount of the cash
dividend foregone is recognised as capital.
(iii) Special dividends are treated as repayments of capital
or income depending on the facts of each particular case.
(iv) Overseas dividends include the taxes deducted at
source.
(v) Interest receivable on bank deposits and underwriting
commission are recognised on an accruals basis.
g. Expenses
All expenses are accounted for on an accruals basis.
Expenses are charged through the revenue column of the
Income Statement except where:
(i) they relate directly to the acquisition or disposal of an
investment (transaction costs), in which case they are
recognised as capital within losses/gains on investments;
and
(ii) they relate directly to the buy-back/issuance of shares,
in which case they are added to the buy-back cost or
deducted from the share issuance proceeds.
h. Finance costs
Finance costs are accounted for on an accruals basis
and on an effective interest rate basis and are charged
through the revenue account.
i. Taxation
Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to taxation
authorities. The tax rates and tax laws used to compute
the amount are those enacted or substantively enacted at
the reporting date.
Deferred taxation is provided on an undiscounted basis
on all timing differences which have originated but not
reversed by the Balance Sheet date, calculated at the
tax rates expected to apply when the timing differences
reverse, based on what has been enacted or substantially
enacted, relevant to the benefit or liability. Deferred tax
assets are recognised only to the extent that it is more
likely than not that there will be taxable profits from which
underlying timing differences can be deducted.
j. Foreign currencies
Transactions involving foreign currencies are converted
at the rate ruling at the time of the transaction. Assets
and liabilities in foreign currencies are translated at the
closing rates of exchange at the Balance Sheet date.
Any gain or loss arising from a change in exchange rate
subsequent to the date of the transaction is included as
an exchange gain or loss in the capital reserve or revenue
reserve as appropriate. Foreign exchange movements on
investments are included in the Income Statement within
gains or losses on investments.
k. Special distributable reserve
The special distributable reserve can be used for the
repurchase of shares and may be distributed by way
of dividend.
l. Capital reserve
Gains and losses on disposal of investments, changes
in the fair value of investments held and realised and
unrealised foreign exchange differences of a capital
nature are dealt with in this reserve after being recognised
in the Income Statement. Purchases of the Company’s
own shares may be funded from this reserve
m. Revenue reserve
The revenue profit or loss for the year is taken to or from
this reserve. The revenue reserve, when in surplus, may
be distributed by way of a dividend.
n. Single segment reporting
The Company is engaged in a single segment of business,
being investment business, consequently no business
segmental analysis is provided.
97
Baillie Gifford US Growth Trust plc
02 Income
2024
£’000
2023
£’000
Income from investments
Overseas dividends 536 472
Overseas interest 32 224
568 696
Other income
Deposit interest 35 154
Total income 603
850
03 Investment management fee
2024
£’000
2023
£’000
Investment management fee 3,581 3,345
Details of the Investment Management Agreement are set out on page 61. The annual management fee is 0.70% on the first £100
million of net assets, 0.55% on the next £900 million of net assets and 0.50% on the remaining net assets. Management fees are
calculated and payable quarterly.
04 Other administrative expenses
2024
£’000
2023
£’000
Directors’ fees (see Directors’ remuneration report page 78)
174 164
Auditor’s remuneration for audit services 158 135
General administrative expenses 198 179
Marketing
*
110 84
Custody fees 12 10
Depositary fees 58 82
Registrar fees 16 16
726 670
*
The Company is part of a marketing programme which includes all the investment trusts managed by the Managers. The marketing strategy has
an ongoing objective to stimulate demand for the Company’s shares. The cost of this marketing strategy is borne in partnership by the Company
and the Managers. The Managers match the Company’s marketing contribution and provide the resource to manage and run the programme.
There were no non-audit fees paid to the external auditor in the year to 31 May 2024 or 2023.
05 Finance costs of borrowings
2024
£’000
2023
£’000
Interest on bank loans (see note 11) 2,528 1,482
Finance costs include the initial arrangement fee and non-utilisation fees.
Financial report
Annual Report and Financial Statements 2024
98
06 Tax
2024
£’000
2023
£’000
Analysis of charge in year
Overseas withholding tax 50 71
Factors affecting the tax charge for the year
The tax charge for the year is higher than the standard rate of corporation tax
in the UK of 25% (2023 – 20%). The differences are explained below:
Net return before taxation 89,934 (15,516)
Net return before taxation multiplied by the standard rate of corporation tax
in the UK of 25% (2023 – 20%)
22,484 (3,103)
Capital returns not taxable (24,042) 2,174
Overseas dividends not taxable (134) (95)
Current year management expenses and non-trade loan relationship deficit not utilised 1,692 1,024
Overseas withholding tax incurred 50 71
Tax charge for the year 50 71
As an investment trust, the Company’s capital gains are not taxable in the United Kingdom.
Factors that may affect future tax charges
At 31 May 2024 the Company had surplus management expenses and losses on non-trading loan relationships of £29,164,000
(2023 – £22,395,000). No deferred tax asset has been recognised in respect of these amounts because the Company is not
expected to generate taxable income in a future period in excess of the deductible expenses of that future period and, accordingly,
it is unlikely that the Company will be able to reduce future tax liabilities through the use of existing surplus expenses.
07 Net return per ordinary share
2024
Revenue
2024
Capital
2024
Total
2023
Revenue
2023
Capital
2023
Total
Net return after taxation (2.07p) 31.73p 29.66p (1.55p) (3.56p) (5.11p)
Revenue return per ordinary share is based on the net revenue loss after taxation of £6,282,000 (2023 – net revenue loss after
taxation of £4,718,000) and on 303,075,968 (2023 – 305,153,700) ordinary shares, being the weighted average number of
ordinary shares in issue (excluding treasury shares) during each period.
Capital return per ordinary share is based on the net capital profit for the financial period of £96,166,000 (2023 – net capital loss
of £10,869,000) and on 303,075,968 (2023 – 305,153,700) ordinary shares, being the weighted average number of ordinary
shares in issue (excluding treasury shares) during each period.
Total return per ordinary share is based on the total profit for the financial period of £89,884,000 (2023 – total loss of
£15,587,000) and on 303,075,968 (2023 – 305,153,700) ordinary shares, being the weighted average number of ordinary shares
in issue (excluding treasury shares) during each period.
There are no dilutive or potentially dilutive shares in issue.
08 Ordinary dividends
There are no dividends paid or proposed in respect of the financial year. There is no investment income available for distribution
by way of dividend for the year to 31 May 2024 due to the revenue loss of £6,282,000 in the year (2023 – revenue loss of
£4,718,000).
99
Baillie Gifford US Growth Trust plc
09 Fixed assets – investments
As at 31 May 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Listed equities 447,044 – – 447,044
Unlisted ordinary shares – – 38,928 38,928
Unlisted preference shares* – – 189,986 189,986
Unlisted convertible promissory notes – – 2,276 2,276
Unlisted CVR
†
– – – –
Total financial asset investments 447,044 – 231,190 678,234
As at 31 May 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Listed equities 396,272 – – 396,272
Unlisted ordinary shares – – 37,307 37,307
Unlisted preference shares* – – 168,162 168,162
Unlisted convertible promissory notes – – 4,167 4,167
Unlisted CVR
†
– – – –
Total financial asset investments 396,272 – 209,636 605,908
*
The investments in preference shares are not classified as equity holdings as they include liquidation preference rights that determine the
repayment (or multiple thereof) of the original investment in the event of a liquidation event such as a take-over.
† The Abiomed CVR (see ‘Contingent value rights’ on page 127 for details) had a fair value of nil at 31 May 2024 and 31 May 2023.
During the year to 31 May 2024 investments with a book cost of £5,725,000 (31 May 2023 – no investments) were transferred
from Level 3 to Level 1 on becoming listed. Investments in securities are financial assets held at fair value through profit or loss.
In accordance with FRS 102, the tables above provide an analysis of these investments based on the fair value hierarchy
described below, which reflects the reliability and significance of the information used to measure their fair value.
Fair value hierarchy
The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the
lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement
for the individual investment in its entirety as follows:
Level 1 – using unadjusted quoted prices for identical instruments in an active market;
Level 2 – using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable
(based on market data); and
Level 3 – using inputs that are unobservable (for which market data is unavailable).
The valuation techniques used by the Company are explained in the accounting policies on pages 95 and 96. A sensitivity analysis
by valuation technique of the unlisted securities is given on pages 106 to 109.
Financial report
Annual Report and Financial Statements 2024
100
09 Fixed assets – investments (continued)
Listed
securities
£’000
Unlisted
securities*
£’000
2024
Total
£’000
2023
Total
£’000
Cost of investments at start of year 376,349 203,001 579,350 608,422
Investment holding gains at start of year 19,923 6,635 26,558 13,165
Value of investments at start of year 396,272 209,636 605,908 621,587
Movements in year:
Purchases at cost 87,608 8,244 95,852 63,894
Sales – proceeds received (118,814) – (118,814) (69,383)
– realised losses on sales (15,089) (8,010)
†
(23,099) (23,583)
Gains on investments 91,342 27,045 118,387 13,393
Change in categorisation
#
5,725 (5,725) – –
Value of investments at end of year 447,044 231,190 678,234 605,908
Cost of investments at end of year
335,779 197,510 533,289 579,350
Investment holding gains at end of year 111,265 33,680 144,945 26,558
Value of investments at end of year 447,044 231,190 678,234 605,908
*
Includes holdings in ordinary shares, preference shares and convertible promissory notes.
†
Loss arose from the investment in Convoy which was written off in the period subsequent to the company ceasing operations.
#
During the year to 31 May 2024 investments with a book cost of £5,725,000 and fair value of £6,314,000 (31 May 2023 – no investments) were
transferred from Level 3 to Level 1 on becoming listed.
The Company received £118,814,000 from investments sold in the year (2023 – £69,383,000). The book cost of these
investments when they were purchased was £141,913,000 (2023 – £92,966,000). These investments have been revalued over
time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
Transaction costs of £21,000 (2023 – £12,000) and £28,000 (2023 – £14,0000) were suffered on purchases and sales
respectively.
2024
£’000
2023
£’000
Net gains/(losses) on investments
Losses on sales* (23,099) (23,583)
Changes in investment holding gains 118,387 13,393
Provision for Stripe put right – 21
95,288 (10,169)
*
Includes losses on Convoy which was written off in the period subsequent to the company ceasing operations. The holdings in Convoy had a book
cost of £8,010,000 when written off.
101
Baillie Gifford US Growth Trust plc
09 Fixed assets – investments (continued)
Significant holdings
Details of significant holdings are noted below in accordance with the disclosure requirements of paragraph 82 of the AIC
Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (updated
in July 2022), in relation to unlisted investments included in the twenty largest holdings within the list of investments disclosed on
pages 41 to 44. As required, this disclosure includes turnover, pre-tax profits and net assets attributable to investors as reported
within the most recently audited financial statements of the investee companies, where possible.
As at 31 May 2024
Latest
financial
statements
Book
cost
£’000
Market
value
£’000
Income
recognised from
holding in the
period £’000
Turnover
£’000
Pre-tax
profit/
(loss)
£’000
Net assets
attributable to
shareholders
£’000Name Business
Space
Exploration
Technologies
Rocket and
spacecraft
company
n/a 11,225 51,864 Nil Information not publicly available*
Stripe Online payment
platform
n/a 25,463 32,007 Nil Information not publicly available*
Brex Corporate credit
cards for start-ups
n/a 14,536 20,666 Nil Information not publicly available*
Zipline Drone-based
medical delivery
n/a 6,131 14,779 Nil Information not publicly available*
Faire
Wholesale
Online wholesale
marketplace
n/a 17,699 13,085 Nil Information not publicly available*
Databricks Data and AI
platform
n/a 10,140 12,082 Nil Information not publicly available*
As at 31 May 2023
Latest
financial
statements
Book
cost
£’000
Market
value
£’000
Income
recognised from
holding in the
period £’000
Turnover
£’000
Pre-tax
profit/
(loss)
£’000
Net assets
attributable to
shareholders
£’000Name Business
Space
Exploration
Technologies
Rocket and
spacecraft
company
n/a 11,225 39,220 Nil Information not publicly available*
Stripe Online payment
platform
n/a 25,463 25,681 Nil Information not publicly available*
Brex Corporate credit
cards for start-ups
n/a 14,536 15,624 Nil Information not publicly available*
Zipline Drone-based
medical delivery
n/a 6,131 14,548 Nil Information not publicly available*
Faire
Wholesale
Online wholesale
marketplace
n/a 17,699 13,449 Nil Information not publicly available*
Discord Communication
software
n/a 11,551 11,006 Nil Information not publicly available*
*
Confidentiality agreements prevent the disclosure of this information.
Financial report
Annual Report and Financial Statements 2024
102
10 Debtors
2024
£’000
2023
£’000
Amounts falling due within one year:
Income accrued (net of withholding taxes) 427 472
Other debtors and prepayments 178 185
605 657
None of the above debtors are financial assets designated at fair value through profit or loss. The carrying amount of debtors is a
reasonable approximation of fair value. There are no debtors that were past due or impaired at 31 May 2024 or 31 May 2023.
11 Creditors – amounts falling due within one year
2024
£’000
2023
£’000
Bank loans 39,271 40,342
Investment management fee 923 819
Other creditors and accruals 560 245
Buyback payable 772 –
41,526 41,406
Borrowing facilities
The US$25 million five-year revolving credit facility with ING Bank N.V., London Branch matured on 31 July 2023 and was
refinanced with a new unsecured US$25 million three-year revolving credit facility from ING Bank N.V., London Branch on 26 July
2023. At 31 May 2024 there were drawings of US$25 million at an interest rate of 7.01% (2023 – US$25 million at an interest
rate of 6.87%). The US$25 million three-year fixed rate facility with ING Bank N.V., London Branch matured on 23 October 2023
and was refinanced with a new unsecured US$25 million three-year revolving credit facility, from The Royal Bank of Scotland
International Limited, on 18 October 2023. At 31 May 2024 there were drawings of US$25 million at an interest rate of 6.61%
(2023 – US$25 million at an interest rate of 1.90%).
The main covenants relating to the loans are that borrowings should not exceed 30% of the Company’s adjusted net asset value
or adjusted portfolio value and the Company’s minimum adjusted net asset value or adjusted portfolio value shall be £140 million.
The adjusted net asset value and adjusted portfolio value calculations include the deduction of 100% of the value of any unlisted
securities. There were no breaches in the loan covenants during the year to 31 May 2024 (31 May 2023 – none).
12 Share capital
2024
Number
2024
£’000
2023
Number
2023
£’000
Allotted, called up and fully paid ordinary shares of 1p each 297,228,700 2,972 305,153,700 3,051
Treasury shares of 1p each 10,131,300 101 2,206,300 22
307,360,000 3,073 307,360,000 3,073
In the year to 31 May 2024, the Company issued no shares (2023 – nil).
Over the period from 1 June 2024 to 16 August 2024 the Company has issued no shares.
The Company’s authority to buy back shares up to a maximum of 14.99% of the Company’s issued share capital was renewed
at the Annual General Meeting held on 18 September 2023. In the year to 31 May 2024, 7,925,000 shares with a nominal value
of £79,250 were bought back at a total cost of £14,550,000 and held in treasury (2023 – nil). At 31 May 2024 the Company had
authority to buy back 37,817,539 ordinary shares.
Over the period from 1 June 2024 to 16 August 2024 the Company bought back 1,950,000 shares.
103
Baillie Gifford US Growth Trust plc
13 Capital and reserves
Share
capital
£’000
Share
premium
account
£’000
Special
distributable
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
At 31 May 2023 3,073 250,827 168,942 165,931 (20,174) 568,599
Net loss on sales of investments – – – (23,099) – (23,099)
Changes in investment holding gains – – – 118,387 – 118,387
Exchange differences on bank loans – – – 1,071 – 1,071
Other exchange differences – – – (193) – (193)
Ordinary shares bought back
into treasury
– – – (14,550) – (14,550)
Revenue return after taxation – – – – (6,282) (6,282)
At 31 May 2024 3,073 250,827 168,942 247,547 (26,456) 643,933
Share
capital
£’000
Share
premium
account
£’000
Special
distributable
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
At 31 May 2022 3,073 250,827 168,942 176,800 (15,456) 584,186
Net loss on sales of investments – – – (23,583) – (23,583)
Changes in investment holding gains – – – 13,393 – 13,393
Provision for Stripe put right released – – – 21 – 21
Exchange differences on bank loans – – – (669) – (669)
Other exchange differences – – – (31) – (31)
Revenue return after taxation – – – – (4,718) (4,718)
At 31 May 2023 3,073 250,827 168,942 165,931 (20,174) 568,599
The capital reserve includes investment holding gains on fixed asset investments of £144,945,000 (2023 – gains of £26,558,000)
as disclosed in note 9.
The revenue reserve, the capital reserve (to the extent it constitutes realised profits) and the special distributable reserve may be
distributed by way of dividend.
The special distributable reserve and the capital reserve can be used for the repurchase of shares.
14 Net asset value per ordinary share
The net asset value per ordinary share and the net asset value attributable to the ordinary shareholders at the year end calculated
in accordance with the Articles of Association were as follows:
2024 2023
2024
£’000
2023
£’000
Shareholders’ funds 216.65p 186.33p 643,933 568,599
The movements during the period of the assets attributable to the ordinary shares are shown in note 13.
Net asset value per ordinary share is based on the net assets as shown above and on 297,228,700 (2023 – 305,153,700) ordinary
shares, being the number of ordinary shares in issue (excluding treasury shares) at 31 May 2024 and 31 May 2023 respectively.
Financial report
Annual Report and Financial Statements 2024
104
15 Analysis of change in net debt
At 31 May
2023
£’000
Cash flows
£’000
Exchange
movement
£’000
At 31 May
2024
£’00
Cash and cash equivalents 3,440 3,373 (193) 6,620
Loans due within one year (40,342) – 1,071 (39,271)
(36,902) 3,373 878 (32,651)
16 Transactions with related parties and the Managers and Secretaries
The Directors’ fees and shareholdings are detailed in the Directors’ remuneration report on pages 76 to 79. No Director has a
contract of service with the Company. During the period no Director was interested in any contract or other matter requiring
disclosure under section 412 of the Companies Act 2006.
Baillie Gifford & Co Limited has been appointed as the Company’s Alternative Investment Fund Managers and Company
Secretaries. Details of the terms of the Investment Management Agreement are set out on page 61 and details of the fees during
the period and the balance outstanding at the period end are shown in notes 3 and 11 respectively.
17 Financial instruments
As an investment trust, the Company invests in listed and unlisted securities and makes other investments so as to achieve
its investment objective of maximising capital appreciation from a focussed and actively managed portfolio of investments
predominantly in listed and unlisted US companies. The Company may borrow money when the Board and Managers have
sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing.
In pursuing its investment objective, the Company is exposed to various types of risk that are associated with the financial
instruments and markets in which it invests.
These risks are categorised as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and
credit risk. The Board monitors closely the Company’s exposures to these risks but does so in order to reduce the likelihood of
a permanent loss of capital rather than to minimise short-term volatility. Risk provides the potential for both losses and gains. In
assessing risk, the Board encourages the Managers to exploit the opportunities that risk affords.
The risk management policies and procedures outlined in this note have not changed significantly from the previous accounting
period.
Market risk
The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of
changes in market prices. This market risk comprises three elements – currency risk, interest rate risk and other price risk. The
Board of Directors reviews and agrees policies for managing these risks and the Company’s Managers both assess the exposure
to market risk when making individual investment decisions and monitor the overall level of market risk across the investment
portfolio on an ongoing basis.
Details of the Company’s investment portfolio are shown in note 9. The Company may, from time to time, enter into derivative
transactions to hedge specific market, currency or interest rate risk. In the year to 31 May 2024 and the year to 31 May 2023
no such transactions were entered into. The Company’s Managers may not enter into derivative transactions without the prior
approval of the Board.
i. Currency risk
The Company’s assets, liabilities and income are principally denominated in US dollars. The Company’s functional currency and
presentational currency is sterling. Consequently, movements in the US dollar/sterling exchange rate will affect the sterling value
of those items.
The Managers monitor the Company’s US dollar exposure (and any other overseas currency exposure) and report to the Board on
a regular basis. The Managers assess the risk to the Company of the foreign currency exposure by considering the effect on the
Company’s net asset value and income of a movement in the rates of exchange to which the Company’s assets, liabilities, income
and expenses are exposed. However, the country in which a company is listed is not necessarily where it earns its profits. The
movement in exchange rates on overseas earnings may have a more significant impact upon a company’s valuation than a simple
translation of the currency in which the company is quoted.
US dollar borrowings can limit the Company’s exposure to anticipated future changes in exchange rates which might otherwise
adversely affect the value of the portfolio of investments.
105
Baillie Gifford US Growth Trust plc
17 Financial instruments (continued)
i. Currency risk (continued)
Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability
is quoted, is shown below.
At 31 May 2024
Investments
£’000
Cash and
deposits
£’000
Bank
loans
£’000
Other debtors
and creditors*
£’000
Net
exposure
£’000
US dollar 678,234 6,237 (39,271) 171 645,371
Total exposure to currency risk 678,234 6,237 (39,271) 171 645,371
Sterling – 383 – (1,821) (1,438)
678,234 6,620 (39,271) (1,650) 643,933
*
Includes non-monetary assets of £172,000.
At 31 May 2023
Investments
£’000
Cash and
deposits
£’000
Bank
loans
£’000
Other debtors
and creditors*
£’000
Net
exposure
£’000
US dollar 605,908 3,074 (40,342) (556) 568,084
Total exposure to currency risk 605,908 3,074 (40,342) (556) 568,084
Sterling – 366 – 149 515
605,908 3,440 (40,342) (407) 568,599
*
Includes non-monetary assets of £172,000.
Currency risk sensitivity
At 31 May 2024, if sterling had strengthened by 5% against the US dollar, with all other variables held constant, total net assets
and total return would have decreased by £32,269,000 (2023 – £28,404,000). A 5% weakening of sterling against the US dollar,
with all other variables held constant, would have had an equal but opposite effect on the Financial Statement amounts. The
analysis is performed on the same basis as it was for 2023.
A change of 5% in foreign currency rates has been considered to be a reasonably plausible change.
ii. Interest rate risk
Interest rate movements may affect directly the level of income receivable on cash deposits and the interest payable on any variable
rate borrowings.
They may also impact upon the market value of investments as the effect of interest rate movements upon the earnings of a
company may have a significant impact upon the valuation of that company’s equity.
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when
making investment decisions and when entering into borrowing agreements.
The Board reviews on a regular basis the amount of investments in cash.
The Company finances part of its activities through borrowings within approved levels. The amount of any such borrowings and the
approved levels are monitored and reviewed regularly by the Board.
The interest rate risk profile of the Company’s financial assets and liabilities at 31 May 2024 and 31 May 2023 are shown below.
Financial assets
2024
Fair value
£’000
2024
Weighted
average
interest rate
2024
Weighted
average period
until maturity
2023
Fair value
£’000
2023
Weighted
average
interest rate
2023
Weighted
average period
until maturity
Cash
US dollar 6,237 2.2% n/a 3,074 2.3% n/a
Sterling 383 1.0% n/a 366 1.1% n/a
6,620 3,440
The cash deposits generally comprise overnight call or short-term money market deposits and earn interest at floating rates based
on prevailing bank base rates. The table above does not include interest bearing investments because these investments have
fixed interest rates and therefore are not subject to interest rate sensitivity.
Financial report
Annual Report and Financial Statements 2024
106
17 Financial instruments (continued)
Financial liabilities
2024
Book value
£’000
2024
Weighted
average
interest rate
2024
Weighted
average period
until maturity*
2023
Book value
£’000
2023
Weighted
average
interest rate
2023
Weighted
average period
until maturity*
Bank loans
Floating rate – US$ denominated 39,271 6.8% 826 days 20,171 5.2% 61 days
Fixed rate – US$ denominated – – – 20,171 1.9% 145 days
39,271 40,342
*
Based on expected maturity date. The three-year floating rate facilities are rolled forward on a three-monthly basis. The amount drawn down over
the term of the facilities is reviewed at every roll forward date.
Interest rate risk sensitivity
An increase of 100 basis points in interest rates, with all other variables held constant, would have decreased the Company’s
total net assets and total return for the year ended 31 May 2024 by £307,000 (2023 – decreased by £146,000). This is due to the
Company’s exposure to interest rates on its revolving floating rate bank loans and cash balances. A decrease of 100 basis points
would have had an equal but opposite effect.
iii. Other price risk
Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Company’s
net assets. The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to
relevant information from the Managers. The Board meets regularly and at each meeting reviews investment performance, the
investment portfolio and the rationale for the current investment portfolio positioning to ensure consistency with the Company’s
objectives and investment policies. The portfolio does not seek to reproduce the comparative index. Investments are selected
based upon the merit of individual companies and therefore performance may well diverge from the comparative index.
Other price risk sensitivity
A full list of the Company’s investments is given on pages 41 to 44. In addition, an analysis of the investment portfolio by broad
industrial or commercial sector is shown on page 32.
69.4% (2023 – 69.7%) of the Company’s net assets are invested in quoted equities. A 5% increase in quoted equity valuations
at 31 May 2024 would have increased total assets and total return by £22,352,000 (2023 – £19,814,000). A decrease of 5%
would have had an equal but opposite effect.
35.9% (2023 – 36.7%) of the Company’s net assets are invested in private company investments. The fair valuation of the
private company investments is influenced by the estimates, assumptions and judgements made in the fair valuation process
(see 1b on pages 94 and 95).
107
Baillie Gifford US Growth Trust plc
17 Financial instruments (continued)
iii. Other price risk (continued)
Other price risk sensitivity (continued)
The private company sensitivity analysis below recognises that the valuation methodologies employed involve different levels
of subjectivity in their significant unobservable inputs and illustrates the sensitivity of the valuations to these inputs as it involves
more significant subjective estimation than the recent transaction method. The inputs have been flexed by +/-10%. The table also
provides the range of values for the key unobservable inputs.
As at
31 May 2024
Valuation technique
Significant unobservable inputs*
Fair value of
investments
£’000
Key
unobservable
inputs
Other
unobservable
inputs
†
Range
Weighted
average
range#
Sensitivity
%
Sensitivity to changes
in significant
unobservable inputs
Recent transaction
price
119,699 n/a
^
a,b n/a n/a 10.0% If the recent
transaction price
changed by +/- 10%,
the fair value would
change by £11,896,255
and -£11,593,406.
Benchmark
performance
86,637 Selection of
comparable
companies
and relevant
indices
‡
a,b,c,f (26.0%)
– 15.8%
(0.7%) 10.0% If input comparable
company performance
changed by +/- 10%,
the fair value would
change by £7,117,989
and -£6,908,997.
Market approach
using comparable
trading multiples
24,854 EV/LTM
revenue
multiple
¶
EV/NTM
revenue
multiple
§
Illiquidity
discount
Transaction
implied
premiums and
discounts
a,b,c,d
a,b,c,d
e
g
1.6x –
8.1x
6.9x
(10.0%)
(49.7%)
5.6x
6.9x
(10.0%)
(49.7%)
10.0%
10.0%
10.0%
10.0%
If EV/LTM multiples
changed by +/- 10%,
the fair value would
change by £1,878,772
and -£1,838,372.
If EV/NTM multiples
changed by +/- 10%,
the fair value would
change by £221,252
and -£221,232.
If the illiquidity discount
is changed by -/+ 10%,
the fair value would
change by £219,574
and -£191,262.
If a +/- 10%
adjustment is applied
to the calculated
premiums and
discounts, the fair
value would change
by £133,781 and
-£120,733.
†
See explanation of significant unobservable inputs on page 109 (sections ‘a’ to ‘g’ as relevant).
#
Weighted average is calculated by reference to the fair value of holdings as at the respective year end. This therefore gives a clearer indication of
the typical multiple or adjustment being applied across the portfolio.
‡
See explanation for the selection of comparable companies on page 109, section ‘c’. The percentage movements reflect the movement in overall
company value for the basket of comparable companies relevant to each holding since the most recent transaction or since the last assessed.
¶
Enterprise value (EV) divided by the last twelve months (LTM) revenue.
§
Enterprise value (EV) divided by the next twelve months (NTM) forecast revenue.
^
Whilst a recent transaction price may be the most appropriate basis for a valuation, it will be corroborated by other techniques which factor in the
unobservable inputs noted in the above table. However, the transaction price itself is observable.
*
Significant unobservable inputs
The unobservable inputs applicable to each broad category of valuation basis will vary dependent on the particular circumstances of each
unlisted company valuation. An explanation of each of the key unobservable inputs is provided below and includes an indication of the range in
value for each input, where relevant. The assumptions made in the production of the inputs are described in note 1b on pages 94 and 95.
Financial report
Annual Report and Financial Statements 2024
108
17 Financial instruments (continued)
As at
31 May 2023
Valuation technique
Significant unobservable inputs*
Fair value of
investments
£’000
Key
unobservable
inputs
Other
unobservable
inputs
†
Range
Weighted
average
range#
Sensitivity
%
Sensitivity to
changes in significant
unobservable inputs
Recent transaction
price
95,711 n/a
^
a,b n/a n/a n/a n/a
Benchmark
performance
83,399 Selection of
comparable
companies
and relevant
indices
‡
a,b,c,f (36.3%)–
21.2%
(9.8%) 10.0% If input comparable
company performance
changed by +/-10%,
the fair value would
change by £5,463,779
and -£5,331,196.
Market approach
using comparable
trading multiples
30,526 EV/LTM
revenue
multiple
¶
a,b,c,d 1.9x–6.9x 4.8x 10.0% If EV/LTM multiples
changed by +/-10%,
the fair value would
change by £1,418,080
and -£1,390,974.
EV/NTM
revenue
multiple
§
a,b,c,d 4.4x–4.9x 4.6x 10.0% If EV/NTM multiples
changed by +/-10%,
the fair value would
change by £715,920
and -£715,110.
Illiquidity
discount
e (10.0%) (10.0%) 10.0% If the transaction
implied premium/
discount is changed
by -/+ 10%, the fair
value would change
by £241,009 and
-£237,884.
Transaction
implied
premiums and
discounts**
g n/a n/a n/a n/a
†
See explanation of significant unobservable inputs on page 109 (sections ‘a’ to ‘g’ as relevant).
# Weighted average is calculated by reference to the fair value of holdings as at the respective year end. This therefore gives a clearer indication of
the typical multiple or adjustment being applied across the portfolio.
‡ See explanation for the selection of comparable companies on page 109, section ‘c’. The percentage movements reflect the movement in overall
company value for the basket of comparable companies relevant to each holding since the most recent transaction or since the last assessed.
¶ Enterprise value (EV) divided by the last twelve months (LTM) revenue.
§
Enterprise value (EV) divided by the next twelve months (NTM) forecast revenue.
^ Whilst a recent transaction price may be the most appropriate basis for a valuation, it will be corroborated by other techniques which factor in the
unobservable inputs noted in the above table. However, the transaction price itself is observable.
** Due to fewer transactions in the last 12 months and to avoid stale valuations, there were no transaction implied premiums or discounts directly
impacting the valuations.
* Significant unobservable inputs
The unobservable inputs applicable to each broad category of valuation basis will vary dependent on the particular circumstances of each unlisted
company valuation. An explanation of each of the key unobservable inputs is provided below and includes an indication of the range in value for
each input, where relevant. The assumptions made in the production of the inputs are described in note 1(b) on pages 94 and 95.
109
Baillie Gifford US Growth Trust plc
17 Financial instruments (continued)
a. Application of valuation basis
Each investment is assessed independently, and the valuation basis applied will vary depending on the circumstances of each
investment. When an investment is pre-revenue, the focus of the valuation will be on assessing the recent transaction and the
achievement of key milestones since investment. Adjustments may also be made depending on the performance of comparable
benchmarks and companies. For those investments where a trading multiples approach can be taken, the methodology will
factor in revenue, earnings or net assets as appropriate for the investment, and where a suitable correlation can be identified
with the comparable companies then a regression analysis will be performed. Discounted cash flows will also be considered
where appropriate forecasts are available.
b. Probability estimation of liquidation events
The probability of a liquidation event such as a company sale, or alternatively an initial public offering (‘IPO’), is a key variable
input in the transaction-based and multiples-based valuation techniques. The probability of an IPO versus a company sale is
typically estimated from the outset to be 50:50 if there has been no indication by the company of pursuing either of these
routes. If the company has indicated an intention to IPO, the probability is increased accordingly to 75% and if an IPO has
become a certainty the probability is increased to 100%. Likewise, in a scenario where a company is pursuing a trade sale the
weightings will be adjusted accordingly in favour of a sale scenario. The Company typically invests in higher ranking preference
shares which carry more protection, and this can therefore influence the end valuation. Option pricing models are used to
corroborate the valuations where there has been more notable company underperformance to ensure that the economic reality
of the shares held by Baillie Gifford US Growth remain appropriate.
c. Selection of comparable companies
The selection of comparable companies is assessed individually for each investment at the point of investment, and the
relevance of the comparable companies is continually evaluated at each valuation. The key criteria used in selecting
appropriate comparable companies are the industry sector in which they operate, the geography of the company’s operations,
the respective revenue and earnings growth rates and the operating margins. Typically, between four and ten comparable
companies will be selected for each investment, depending on how many relevant comparable companies are identified.
The resultant revenue or earnings multiples or share price movements derived will vary depending on the companies selected
and the industries they operate in.
d. Estimated sustainable earnings
The selection of sustainable revenue or earnings will depend on whether the company is sustainably profitable or not, and
where it is not then revenues will be used in the valuation. The valuation approach will typically assess companies based on
the last twelve months of revenue or earnings, as they are the most recent available and therefore viewed as the most reliable.
Where a company has reliably forecasted earnings previously or there is a change in circumstance at the business which will
impact earnings going forward, then forward estimated revenue or earnings may be used instead.
e. Application of liquidity discount
The application of an illiquidity discount will be applied either through the calibration of a valuation against the most recent
transaction, or by application of a specific discount. The discount applied where a calibration (see ‘g’ below) is not appropriate
is typically 10%, reflecting that the majority of the investments held are substantial companies with some secondary market
activity.
f. Selection of appropriate benchmarks
The selection of appropriate benchmarks is assessed individually for each investment. The industry and geography of
each company are key inputs to the benchmark selection, with either one or two key indices or benchmarks being used for
comparison where applicable.
g. Transaction implied premium and discount
Where there is an implied company valuation available as a result of an external arm’s length transaction, the ongoing valuation
will be calibrated to this by deriving a company valuation with reference to the average multiple from a set of comparable
companies and comparing this to a transaction implied valuation, and could result in an implied premium or discount compared
to comparable companies at the point of transaction. This discount or premium will be considered in future valuations, and may
be reduced due to factors such as period of time since the transaction and company performance. Where a calibrated approach
is not appropriate, a discount for illiquidity will be applied as noted in ‘e’ above.
Financial report
Annual Report and Financial Statements 2024
110
17 Financial instruments (continued)
Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. 65.2% of the
Company’s total assets as at 31 May 2024 were investments in quoted securities that are readily realisable mitigating liquidity risk.
The Board provides guidance to the Managers as to the maximum exposure to any one holding and to the maximum aggregate
exposure to substantial holdings.
The Company has the power to take out borrowings, which give it access to additional funding when required. The Company’s
current borrowing facilities are detailed in note 11. Under the terms of the borrowing facility, borrowings are repayable on demand
at their current carrying value.
Credit risk
This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in
the Company suffering a loss.
This risk is managed as follows:
(i) where the Managers make an investment in a bond or other security with credit risk, that credit risk is assessed and then
compared to the prospective investment return of the security in question;
(ii) the Depositary is liable for the loss of financial instruments held in custody. The Depositary will ensure that any delegate
segregates the assets of the Company. The Managers monitor the Company’s risk by reviewing the Custodian’s internal control
reports and reporting its findings to the Board;
(iii) investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Managers.
Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company’s Custodian bank ensures that
the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or
securities away from the Company is completed;
(iv) the creditworthiness of the counterparty to transactions involving derivatives, structured notes and other arrangements,
wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest,
are subject to rigorous assessment by the Managers; and
(v) cash is only held at banks that are regularly reviewed by the Managers. At 31 May 2024 and 31 May 2023 all cash deposits
were held with the Custodian bank.
The Company owns a number of unquoted preference share securities. Some of these may have been classified as debt by the
issuer. There are no material amounts past due in relation to these securities. As these instruments (alongside the ordinary share
securities) have been recognised at fair value through profit and loss, the fair value takes into account credit, market and other
price risk.
Credit risk exposure
The maximum exposure to credit risk at 31 May was:
2024
£’000
2023
£’000
Fixed interest investments 2,276 4,167
Cash and short term deposits 6,620 3,440
Debtors and prepayments 605 657
9,501 8,264
The maximum exposure to cash during the year to 31 May 2024 was £15,196,000 (31 May 2023 – £23,049,000) and the minimum
was -£5,015,000 (31 May 2023 – £1,213,000). None of the Company’s financial assets are past due or impaired.
111
Baillie Gifford US Growth Trust plc
17 Financial instruments (continued)
Fair value of financial assets and financial liabilities
The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the Balance
Sheet with the exception of long-term borrowings. The fair values of the Company’s borrowings are shown below.
2024
Book value
£’000
2024
Fair value
£’000
2023
Book value
£’000
2023
Fair value
£’000
Floating rate multi-currency loan*
39,271 39,271 20,171 20,171
Fixed rate multi-currency loan – – 20,171 19,733
39,271 39,271 40,342 39,904
*
All short-term floating rate borrowings are stated at book cost which is considered to be equal to their fair value given the facilities are revolving
credit facilities.
Capital management
The capital of the Company is its share capital and reserves as set out in notes 12 and 13 together with its borrowings (see note
11). The objective of the Company is to invest predominantly in listed and unlisted US companies in order to achieve capital
growth. The Company’s investment policy is set out on pages 45 and 46. In pursuit of the Company’s objective, the Board has
a responsibility for ensuring the Company’s ability to continue as a going concern and details of the related risks and how they
are managed are set out on pages 48 to 53. The Company has the authority to issue and buy back its shares and changes to
the share capital during the period are set out in notes 12 and 13. The Company does not have any externally imposed capital
requirements other than the covenants on its loans which are detailed in note 11.
Shareholder
information
113
Baillie Gifford US Growth Trust plc
Notice of
Annual General Meeting
The Annual General Meeting of the Company will
be held at the offices of Herbert Smith Freehills
in London (Exchange House, Primrose Street,
London, EC2A 2EG) on Friday, 27 September 2024,
at 9.00am. You will find directions to the venue
by scanning the QR code above.
The Board encourages all shareholders to submit
proxy voting forms as soon as possible and, in any
event, by no later than 9.00am on 25 September
2024. Should shareholders have questions for the
Board or the Managers or any queries as to how to
vote, they are welcome as always to submit them by
email to trustenquiries@bailliegifford.com or call
0800 917 2112. Baillie Gifford may record your call.
Sun St
Primrose St
Liverpool St
Liverpool
Street
A10
Sun St Passage
Shareholder information
Annual Report and Financial Statements 2024
114
Notice is hereby given that the sixth Annual General
Meeting of Baillie Gifford US Growth Trust plc
(the ‘Company’) will be held at the offices of Herbert
Smith Freehills in London (Exchange House,
Primrose Street, London, EC2A 2EG) on Friday,
27 September 2024 at 9.00am for the purposes of
considering and, if thought fit, passing the following
resolutions, of which resolutions 1 to 10 will be
proposed as ordinary resolutions and resolutions
11 and 12 will be proposed as special resolutions.
Ordinary business
1. To receive and adopt the Annual Report and
Financial Statements of the Company for the
financial year ended 31 May 2024 together
with the Reports of the Directors and of the
Independent Auditor thereon.
2. To approve the Directors’ Annual Report on
Remuneration for the financial year ended
31 May 2024.
3. To re-elect Mr TJW Burnet as a Director of the
Company.
4. To re-elect Ms SP Inglis as a Director of the
Company.
5. To re-elect Mr GD Paterson as a Director of the
Company.
6. To re-elect Mr CRD van der Kuyl as a Director of
the Company.
7. To re-elect Ms RL Palmer as a Director of the
Company.
8. To re-appoint Ernst & Young LLP as Independent
Auditor of the Company to hold office until the
conclusion of the next Annual General Meeting
at which the Financial Statements are laid before
the Company.
9. To authorise the Directors to determine the
remuneration of the Independent Auditor of
the Company.
10. That, in substitution to any existing authority but
without prejudice to the exercise of any such
authority prior to the date hereof, the Directors
of the Company be and they are hereby
generally and unconditionally authorised in
accordance with section 551 of the Companies
Act 2006 (the ‘Act’) to exercise all the powers
of the Company to allot ordinary shares in the
capital of the Company, or C shares convertible
into ordinary shares, provided that such
authority shall be limited to the allotment of
ordinary shares and grant of rights in respect
of ordinary shares with an aggregate nominal
value of up to £984,262.33 (representing
approximately one-third of the nominal value
of the issued share capital excluding treasury
shares as at 16 August 2024), such authority
to expire at the conclusion of the next Annual
General Meeting of the Company after the
passing of this resolution or on the expiry of
15 months from the passing of this resolution,
whichever is the earlier, unless previously
revoked, varied or extended by the Company in a
general meeting, save that the Company may at
any time prior to the expiry of this authority make
an offer or enter into an agreement which would
or might require ordinary shares or C shares to
be allotted or granted after the expiry of such
authority and the Directors shall be entitled
to allot or grant ordinary shares or C shares in
pursuance of such an offer or agreement as if
such authority had not expired.
11. That, subject to the passing of Resolution
10 above, and in substitution to any existing
authorities but without prejudice to the exercise
of any such authority prior to the date hereof,
the Directors of the Company be and they
are hereby generally empowered, pursuant to
sections 570 and 573 of the Companies Act
2006 (the ‘Act’) to allot equity securities
(within the meaning of section 560(1) of the Act,
and including ordinary shares and C shares)
115
Baillie Gifford US Growth Trust plc
for cash pursuant to the authority given by
Resolution 10 above and to sell treasury shares
for cash as if section 561(1) of the Act did not
apply to any such allotment or sale, provided that
this power:
(a) expires at the conclusion of the next
Annual General Meeting of the Company
after the passing of this Resolution or on the
expiry of 15 months from the passing of this
Resolution, whichever is the earlier, save that
the Company may, before such expiry, make
an offer or agreement which would or might
require equity securities to be allotted after
such expiry and the Directors may allot
equity securities in pursuance of any such
offer or agreement as if the power conferred
hereby had not expired; and
(b) shall be limited to the allotment of equity
securities or the sale of treasury shares up to
an aggregate nominal value of £ 295,278.70
(representing approximately 10% of the
nominal value of the issued share capital
excluding treasury shares of the Company as
at 16 August 2024).
12. That, in substitution for any existing authority
but without prejudice to the exercise of any such
authority prior to the date hereof, the Company
be generally and unconditionally authorised, in
accordance with section 701 of the Companies
Act 2006 (the ‘Act’) to make market purchases
(within the meaning of section 693(4) of the
Act) of fully paid ordinary shares of 1p each in
the capital of the Company (‘ordinary shares’)
(either for retention as treasury shares for future
reissue, resale or transfer or for cancellation)
provided that:
(a) the maximum aggregate number of ordinary
shares hereby authorised to be purchased
is 44,262,277, or, if less, the number
representing approximately 14.99% of the
issued ordinary share capital (excluding
treasury shares) of the Company as at the
date of the passing of this Resolution;
(b) the minimum price (excluding expenses)
which may be paid for each ordinary share
shall be the nominal value of that share;
(c) the maximum price (excluding expenses)
which may be paid for any ordinary share
purchased pursuant to this authority shall not
be more than the higher of:
(i) 5% above the average closing price
on the London Stock Exchange of an
ordinary share over the five business
days immediately preceding the day of
purchase; and
(ii) the higher of the price of the last
independent trade and the highest current
independent bid for an ordinary share in
the Company on the trading venues where
the market purchases by the Company
pursuant to the authority conferred by this
Resolution 12 will be carried out; and
(d) unless previously varied, revoked or renewed
by the Company in a general meeting, the
authority hereby conferred shall expire at
the conclusion of the next Annual General
Meeting, save that the Company may, prior to
such expiry, enter into a contract to purchase
ordinary shares under such authority which
will or might be completed or executed wholly
or partly after the expiration of such authority
and may make a purchase of ordinary shares
pursuant to any such contract or contracts.
By Order of the Board
Baillie Gifford & Co Limited
Managers and Secretaries
28 August 2024
Shareholder information
Annual Report and Financial Statements 2024
116
Notes
01. As a member you are entitled to appoint a proxy
or proxies to exercise all or any of your rights
to attend, speak and vote at the AGM. A proxy
need not be a member of the Company but
must attend the AGM to represent you. You may
appoint more than one proxy provided each
proxy is appointed to exercise rights attached to
different shares. You can only appoint a proxy
using the procedure set out in these notes and
the notes to the proxy form. You may not use
any electronic address provided either in this
notice or any related documents (including
the Financial Statements and proxy form) to
communicate with the Company for any purpose
other than those expressly stated.
02. A proxy form for use by shareholders at the
meeting is enclosed with this document. Proxies
must be lodged with the Company’s registrar,
Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol BS99 6ZY or
eproxyappointment.com, not less than two days
(excluding non-working days) before the time
appointed for the meeting together with any
power of attorney or other authority (if any)
under which it is signed. Completion of the
proxy form will not prevent a shareholder from
attending the meeting and voting in person.
03. CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so by using the
procedures described in the CREST Manual
and/or by logging on to the website
euroclear.com/CREST. CREST personal
members or other CREST sponsored members,
and those CREST members who have appointed
a voting service provider(s), should refer to their
CREST sponsor or voting service provider(s),
who will be able to take the appropriate action
on their behalf.
04. In order for a proxy appointment or instruction
made using the CREST service to be
valid, the appropriate CREST message (a
‘CREST Proxy Instruction’) must be properly
authenticated in accordance with Euroclear
UK & International Limited’s specifications,
and must contain the information required for
such instruction, as described in the CREST
Manual. The message, regardless of whether
it constitutes the appointment of a proxy or
is an amendment to the instruction given to a
previously appointed proxy must, in order to
be valid, be transmitted so as to be received
by the Company’s registrar (ID 3RA50) no
later than 9.00am two days (excluding non-
working days) before the time of the meeting
or any adjournment. For this purpose, the
time of receipt will be taken to be the time
(as determined by the timestamp applied to
the message by the CREST Application Host)
from which the Company’s registrar is able to
retrieve the message by enquiry to CREST in
the manner prescribed by CREST. After this time
any change of instructions to proxies appointed
through CREST should be communicated to the
appointee through other means.
05. CREST members and, where applicable,
their CREST sponsors, or voting service
providers should note that Euroclear UK &
International Limited does not make available
special procedures in CREST for any particular
message. Normal system timings and
limitations will, therefore, apply in relation to
the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST
personal member, or sponsored member, or
has appointed a voting service provider(s),
to procure that his or her CREST sponsor or
voting service provider(s) take(s)) such action
as shall be necessary to ensure that a message
is transmitted by means of the CREST system
by any particular time. In this connection,
CREST members and, where applicable, their
CREST sponsors or voting system providers are
referred, in particular, to those sections of the
CREST Manual concerning practical limitations
of the CREST system and timings.
06. The Company may treat as invalid a CREST
Proxy Instruction in the circumstances set out
in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
117
Baillie Gifford US Growth Trust plc
07. The return of a completed proxy form or other
instrument of proxy will not prevent you attending
the AGM and voting in person if you wish.
08. Pursuant to Regulation 41 of the Uncertificated
Securities Regulations 2001 and section 311 of
the Companies Act 2006 the Company specifies
that to be entitled to attend and vote at the
Annual General Meeting (and for the purpose of
the determination by the Company of the votes
they may cast), shareholders must be registered
in the Register of Members of the Company no
later than 9.00am two days (excluding non-
working days) prior to the commencement of the
AGM or any adjourned meeting. Changes to the
Register of Members after the relevant deadline
shall be disregarded in determining the rights of
any person to attend and vote at the meeting.
09. The members of the Company may require the
Company to publish, on its website, (without
payment) a statement (which is also passed
to the Auditor) setting out any matter relating
to the audit of the Company’s Financial
Statements, including the Auditor’s report and
the conduct of the audit. The Company will
be required to do so once it has received such
requests from either members representing
at least 5% of the total voting rights of the
Company or at least 100 members who have
a relevant right to vote and hold shares in the
Company on which there has been paid up an
average sum per member of at least £100. Such
requests must be made in writing and must state
your full name and address and be sent to the
Company at Calton Square, 1 Greenside Row,
Edinburgh EH1 3AN.
10. Information regarding the Annual General
Meeting, including information required by
section 311A of the Companies Act 2006,
is available from the Company website at
bgusgrowthtrust.com.
11. Members have the right to ask questions at the
meeting in accordance with section 319A of the
Companies Act 2006
12. Any corporation which is a member can appoint
one or more corporate representatives who
may exercise on its behalf all of its powers as
a member provided that they do not do so in
relation to the same shares.
13. As at 16 August 2024 (being the last practicable
date prior to the publication of this notice) the
Company’s issued share capital (excluding
treasury shares) consisted of 295,278,700
ordinary shares of 1p each, carrying one vote
each. Therefore, the total number of voting
rights in the Company as at 16 August 2024
were 295,278,700 votes.
14. Any person holding 3% or more of the total
voting rights of the Company who appoints a
person other than the Chair of the meeting as
his or her proxy will need to ensure that both
he/she and his/her proxy complies with their
respective disclosure obligations under the UK
Disclosure Guidance and Transparency Rules.
15. No Director has a contract of service with
the Company.
Shareholder information
Annual Report and Financial Statements 2024
118
Further shareholder
information
Baillie Gifford US Growth Trust plc
(‘Baillie Gifford US Growth’) is an investment
trust. Investment trusts offer investors
the following:
ș participation in a diversified portfolio of shares;
ș constant supervision by experienced
professional managers; and
ș the Company is free from capital gains tax
on capital profits realised within its portfolio,
although investors are still liable for capital gains
tax on profits when selling their investment.
How to invest
The Company’s shares are traded on the London
Stock Exchange. They can be bought by placing an
order with a stockbroker, or by asking a professional
adviser to do so. If you are interested in investing
directly in Baillie Gifford US Growth Trust, you can
do so online. There are a number of companies
offering real time online dealing services. Find
out more by visiting the investment trust pages at
bailliegifford.com.
Sources of further information
on the Company
The ordinary shares of the Company are listed
on the London Stock Exchange and their price is
shown in the Financial Times. The price of shares
can also be found on the Company website at
bgusgrowthtrust.com, Trustnet at trustnet.co.uk and
on other financial websites. Company factsheets
are also available on the Baillie Gifford website
and are updated monthly. These are available from
Baillie Gifford on request.
Baillie Gifford US Growth share identifiers
ISIN GB00BDFGHW41
Sedol BDFGHW4
Ticker USA
Legal Entity Identifier 213800UM1OUWXZPKE539
Key dates
The Company pays the minimum permissible level of
final dividend and no interim dividend. If a dividend
was payable this would be due soon after the Annual
General Meeting.
Share register enquiries
Computershare Investor Services PLC maintains
the share register on behalf of the Company. In the
event of queries regarding shares registered in your
own name, please contact the registrar on
0370 707 1711.
This helpline also offers an automated self-service
functionality (available 24 hours a day, 7 days a
week) which allows you to:
ș hear the latest share price;
ș confirm your current share holding balance; and
ș order change of address and stock transfer
forms.
You can also check your holding on the registrar’s
website at investorcentre.co.uk.
They also offer a free, secure share management
website service which allows you to:
ș view your share portfolio and see the latest
market price of your shares;
ș calculate the total market price of each
shareholding;
ș view price histories and trading graphs;
ș change address details; and
ș use online dealing services.
To take advantage of this service, please log in at
investorcentre.co.uk and enter your Shareholder
Reference Number and Company Code (this
information can be found on your share certificate).
119
Baillie Gifford US Growth Trust plc
Electronic proxy voting
If you hold stock in your own name you can choose
to vote by returning proxies electronically at
eproxyappointment.com.
If you have any questions about this service please
contact Computershare on 0370 707 1711.
CREST proxy voting
If you are a user of the CREST system (including
a CREST Personal Member), you may appoint one
or more proxies or give an instruction to a proxy
by having an appropriate CREST message
transmitted. For further information please refer
to the CREST Manual.
Where this has been received in a country where
the provision of such a service would be contrary to
local laws or regulations, this should be treated as
information only.
How to vote your shares
As a shareholder you have a say on how the
Company is run. The following link will take
you through to The Association of Investment
Companies (AIC) website where there is information
on how to vote your shares if you hold them via one
of the major platforms: theaic.co.uk/how-to-vote-
your-shares.
Alternative Investment Fund Managers
(AIFM) Regulations
In accordance with the AIFM Regulations,
information in relation to the Company’s leverage
and the remuneration of the Company’s AIFM,
Baillie Gifford & Co Limited, is required to be made
available to investors.
AIFM remuneration
In accordance with the Regulations, the AIFM
remuneration policy is available at bailliegifford.com
or on request (see contact details in the ‘Company
information’ section on page 129). The numerical
remuneration disclosures in respect of the AIFM’s
reporting period are available at bailliegifford.com.
Leverage
The Company’s maximum and actual leverage levels
(see Glossary of terms and alternative performance
measures on pages 124 to 127) at 31 May 2024 are
shown below:
Gross
method
Commitment
method
Maximum limit 2.50:1 2.00:1
Actual 1.06:1 1.06:1
Automatic exchange of information
In order to fulfil its obligations under UK tax
legislation relating to the automatic exchange of
information, Baillie Gifford US Growth Trust plc is
required to collect and report certain information
about certain shareholders.
The legislation will require investment trust
companies to provide personal information to
HMRC on certain investors who purchase shares in
investment trusts. As an affected company, Baillie
Gifford US Growth Trust plc will have to provide
information annually to the local tax authority on
the tax residencies of a number of non-UK based
certificated shareholders and corporate entities.
Shareholders, excluding those whose shares are
held in CREST, who come on to the share register
will be sent a certification form for the purposes of
collecting this information.
For further information, please see HMRC’s
Quick Guide: Automatic Exchange of Information
– information for account holders gov.uk/
government/publications/exchange-of-information-
accountholders.
Data protection
The Company is committed to ensuring the
confidentiality and security of any personal data
provided to it. Further details on how personal data
is held and processed on behalf of the Company
can be found in the privacy policy available on the
Company’s website bgusgrowthtrust.com.
Shareholder information
Annual Report and Financial Statements 2024
120
No third party data provider (‘Provider’) makes any
warranty, express or implied, as to the accuracy,
completeness or timeliness of the data contained
herewith nor as to the results to be obtained by
recipients of the data.
No Provider shall in any way be liable to any
recipient of the data for any inaccuracies, errors
or omissions in the index data included in this
document, regardless of cause, or for any damages
(whether direct or indirect) resulting therefrom.
No Provider has any obligation to update, modify
or amend the data or to otherwise notify a recipient
thereof in the event that any matter stated herein
changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have
any liability whatsoever to you, whether in contract
(including under an indemnity), in tort (including
negligence), under a warranty, under statute or
otherwise, in respect of any loss or damage suffered
by you as a result of or in connection with any
opinions, recommendations, forecasts, judgements
or any other conclusions, or any course of action
determined, by you or any third party, whether or
not based on the content, information or materials
contained herein.
S&P Index Data
The S&P 500 Index (‘Index’) is a product of S&P Dow
Jones Indices LLC, a division of S&P Global, or its
affiliates (‘SPDJI’). Standard & Poor’s® and S&P®
are registered trademarks of Standard & Poor’s
Financial Services LLC, a division of S&P Global
(‘S&P’); Dow Jones® is a registered trademark of
Dow Jones Trademark Holdings LLC (‘Dow Jones’).
Neither S&P Dow Jones Indices LLC, Dow Jones
Trademark Holdings LLC, their affiliates nor their
third party licensors make any representation or
warranty, express or implied, as to the ability of
any index to accurately represent the asset class
or market sector that it purports to represent and
neither S&P Dow Jones Indices LLC, Dow Jones
Trademark Holdings LLC, their affiliates nor their
third party licensors shall have any liability for any
errors, omissions, or interruptions of any index or the
data included therein.
FTSE Index data
London Stock Exchange Group plc and its group
undertakings (collectively, the ‘LSE Group’). ©
LSE Group 2024. FTSE Russell is a trading name
of certain of the LSE Group companies. ‘FTSE®’
‘Russell®’, ‘FTSE Russell®’, is/are a trade mark(s) of
the relevant LSE Group companies and is/are used
by any other LSE Group company under license. All
rights in the FTSE Russell indexes or data vest in the
relevant LSE Group company which owns the index
or the data. Neither LSE Group nor its licensors
accept any liability for any errors or omissions in the
indexes or data and no party may rely on any indexes
or data contained in this communication.
No further distribution of data from the LSE Group is
permitted without the relevant LSE Group company’s
express written consent. The LSE Group does not
promote, sponsor or endorse the content of this
communication.
Third party
data provider
disclaimer
121
Baillie Gifford US Growth Trust plc
The EU Sustainable Finance Disclosure Regulation
(‘SFDR’) does not have a direct impact in the UK
due to Brexit. However, it applies to third-country
products marketed in the EU. As Baillie Gifford
US Growth is marketed in the EU by the AIFM,
Baillie Gifford & Co Limited, via the National Private
Placement Regime (‘NPPR’) the following disclosures
have been provided to comply with the high-level
requirements of SFDR.
The AIFM has adopted Baillie Gifford & Co’s
stewardship principles and guidelines as its policy
on integration of sustainability risks in investment
decisions.
Baillie Gifford & Co believes that a company
cannot be financially sustainable in the long run if
its approach to business is fundamentally out of
line with changing societal expectations. It defines
‘sustainability’ as a deliberately broad concept which
encapsulates a company’s purpose, values, business
model, culture and operating practices.
Baillie Gifford & Co’s approach to investment is
based on identifying and holding high quality growth
businesses that enjoy sustainable competitive
advantages in their marketplace. To do this it
looks beyond current financial performance,
undertaking proprietary research to build up an
in-depth knowledge of an individual company
and a view on its long-term prospects. This
includes the consideration of sustainability factors
(environmental, social and/or governance matters)
which it believes will positively or negatively
influence the financial returns of an investment.
The likely impact on the return of the portfolio
from a potential or actual material decline in the
value of investment due to the occurrence of an
environmental, social or governance event or
condition will vary and will depend on several factors
including but not limited to the type, extent,
Sustainable Finance
Disclosure Regulation
('SFDR')
complexity and duration of an event or condition,
prevailing market conditions and existence of any
mitigating factors.
Whilst consideration is given to sustainability
matters, there are no restrictions on the investment
universe of the Company, unless otherwise stated
within in its investment objective & policy. Baillie
Gifford & Co can invest in any companies it believes
could create beneficial long-term returns for
investors. However, this might result in investments
being made in companies that ultimately cause a
negative outcome for the environment or society.
More detail on the Managers’ approach to
sustainability can be found in the stewardship
principles and guidelines document, available
publicly on the Baillie Gifford website
bailliegifford.com and by scanning the QR
code below.
The underlying investments do not take into account
the EU criteria for environmentally sustainable
economic activities established under the EU
Taxonomy Regulation.
Shareholder information
Annual Report and Financial Statements 2024
122
Communicating
with shareholders
Trust magazine Baillie Gifford US Growth web page at bgusgrowthtrust.com
Trust magazine
Trust is the Baillie Gifford investment trust magazine
which is published twice a year. It provides an insight
to Baillie Gifford’s investment approach by including
interviews with Baillie Gifford’s fund managers, as
well as containing investment trust news, investment
features and articles about the trusts managed by
Baillie Gifford, including Baillie Gifford US Growth.
Trust plays an important role in helping to explain
Baillie Gifford’s products so that readers can really
understand them.
You can subscribe to Trust magazine or view a digital
copy at bailliegifford.com/trust.
Suggestions and questions
Any suggestions on how communications with
shareholders can be improved are welcomed, so
please contact the Baillie Gifford Client Relations
Team and give them your suggestions. They will also
be very happy to answer questions that you may
have about Baillie Gifford US Growth.
Baillie Gifford US Growth on the Web
Up-to-date information about Baillie Gifford
US Growth can be found on the Company website
at bgusgrowthtrust.com. You will find full details on
Baillie Gifford US Growth, including recent portfolio
information and performance figures.
Client Relations Team contact details
You can contact the Baillie Gifford Client Relations
Team by telephone, email or post:
Telephone: +44 (0)800 917 2112
Your call may be recorded for training or monitoring
purposes.
Email: trustenquiries@bailliegifford.com
Website: bailliegifford.com
Baillie Gifford Client Relations Team
Calton Square
1 Greenside Row
Edinburgh EH1 3AN
Please note that Baillie Gifford is not permitted
to give financial advice. If you would like advice,
please ask an authorised intermediary.
123
Baillie Gifford US Growth Trust plc
The Long View
Articles by our US Equities Team
exploring what matters most to
optimistic, long-term investors.
A year of opportunity in US Growth
by Kirsty Gibson
Exploring the inefficiencies of
the US stock market and the
unique opportunities it presents
for growth.
The American Dream made real
by Ben James
At the heart of the American
Dream is the idea that anyone
can start a business and change
the world through ingenuity, hard
work and investment.
Shareholder information
Annual Report and Financial Statements 2024
124
An alternative performance measure (‘APM’) is a financial measure of historical or future financial
performance, financial position or cash flows, other than a financial measure defined or specified in the
applicable financial reporting framework. The APMs noted below are commonly used measures within the
investment trust industry and serve to improve comparability between investment trusts.
Total assets
This is the Company’s definition of adjusted total assets, being the total value of all assets held less all
liabilities (other than liabilities in the form of borrowings).
Shareholders’ funds and net asset value
Shareholders’ funds is the value of all assets held less all liabilities, with borrowings deducted at book cost.
Net asset value (‘NAV’) is the value of all assets held less all liabilities, with borrowings deducted at either fair
value or book value as described below. Per share amounts are calculated by dividing the relevant figure by
the number of ordinary shares in issue.
Borrowings at book value
Borrowings are valued at adjusted net issue proceeds. The value of the borrowings at book is set out on
page 111.
Borrowings at fair value (APM)
Borrowings are valued at an estimate of their market worth. The value of the borrowings at fair is set out on
page 111.
Net asset value (reconciliation of NAV at book value to NAV at fair value)
2024 2023
Net asset value per ordinary share (borrowings at book value) 216.65p 186.33p
Shareholders’ funds (borrowings at book value) £643,933,000 £568,599,000
Add: book value of borrowings £39,271,000 £40,342,000
Less: fair value of borrowings (£39,271,000) (£39,904,000)
Net asset value (borrowings at fair value) £643,933,000 £569,037,000
Number of shares in issue 297,228,700 305,153,700
Net asset value per ordinary share (borrowings at fair value) 216.65p 186.48p
Net liquid assets
Net liquid assets comprise current assets less current liabilities (excluding borrowings).
Glossary of terms and alternative
performance measures (‘APM’)
125
Baillie Gifford US Growth Trust plc
Discount/premium (APM)
As stock markets and share prices vary, an investment trust’s share price is rarely the same as its NAV. When
the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount
is calculated by subtracting the NAV per share from the share price and is usually expressed as a percentage
of the NAV per share. If the share price is higher than the NAV per share, it is said to be trading at a premium.
2024 2023
Net asset value per ordinary share
(after deducting borrowings at fair value)
a 216.65p 186.48p
Share price b 192.40p 144.80p
Discount (borrowings at fair value) (b-a) ÷ a 11.2% 22.4%
2024 2023
Net asset value per ordinary share
(after deducting borrowings at book value)
a 216.65p 186.33p
Share price
b
192.40p
144.80p
Discount (borrowings at book value) (b-a) ÷ a 11.2% 22.3%
Total return (APM)
The total return is the return to shareholders after reinvesting any dividend on the date that the share price
goes ex-dividend. The Company does not pay a dividend, therefore, the total returns for the share price and
NAV per share at book and fair value are the same as the percentage movements in the share price and NAV
per share at book and fair value as detailed on page 20.
Ongoing charges (APM)
The total recurring expenses (excluding the Company’s cost of dealing in investments and borrowing costs)
incurred by the Company as a percentage of the average net asset value (with debt at fair value).
31 May
2024
£’000
31 May
2023
£’000
Investment management fee 3,581 3,345
Other administrative expenses 726 670
Total expenses a 4,307 4,015
Average net asset value b 616,958 578,722
Ongoing charges (a ÷ b expressed as a percentage) 0.70% 0.69%
Shareholder information
Annual Report and Financial Statements 2024
126
Turnover (APM)
Annual turnover is a measure of portfolio change or trading activity in a portfolio. Turnover is calculated
as the minimum of purchases and sales in a month, divided by the average market value of the portfolio,
summed to get rolling 12 month turnover data.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow
money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders’
assets is called ‘gearing’. If the Company’s assets grow, the shareholders’ assets grow proportionately more
because the debt remains the same. But if the value of the Company’s assets falls, the situation is reversed.
Gearing can therefore enhance performance in rising markets but can adversely impact performance in
falling markets.
Gearing is the Company’s borrowings at book value less cash and cash equivalents (including any
outstanding trade settlements) expressed as a percentage of shareholders’ funds.
31 May
2024
£’000
31 May
2023
£’000
Borrowings (at book cost) £39,271 £40,342
Less: cash and cash equivalents (£6,620) (£3,440)
Adjusted borrowings (a) £32,651 £36,902
Shareholders’ funds (b) £643,933 £568,599
Gearing: (a) as a percentage of (b) 5% 6%
Gross gearing is the Company’s borrowings expressed as a percentage of shareholders’ funds.
31 May
2024
£’000
31 May
2023
£’000
Borrowings (at book cost) (a) £39,271 £40,342
Shareholders’ funds (b) £643,933 £568,599
Gross gearing: (a) as a percentage of (b) 6% 7%
127
Baillie Gifford US Growth Trust plc
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers Regulations, leverage is any method
which increases the Company’s exposure, including the borrowing of cash and the use of derivatives. It is
expressed as a ratio between the Company’s exposure and its net asset value and can be calculated on a
gross and a commitment method. Under the gross method, exposure represents the sum of the Company’s
positions after the deduction of sterling cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash
balances and after certain hedging and netting positions are offset against each other.
Active share (APM)
Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that
differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio
that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an
active share of zero indicates a portfolio that tracks the index.
Treasury shares
The Company has the authority to make market purchases of its ordinary shares for retention as treasury
shares for future reissue, resale, transfer or cancellation. Treasury shares do not receive distributions and
the Company is not entitled to exercise the voting rights attaching to them.
Private (unlisted) company
An unlisted or private company means a company whose shares are not available to the general public for
trading and are not listed on a stock exchange.
Contingent value rights
‘CVR’ after an instrument name indicates a security, usually arising from a corporate action such as a
takeover or merger, which represents a right to receive potential future value, should the continuing
company achieve certain milestones. The Abiomed CVR arose on Johnson & Johnson’s takeover of
Abiomed. The milestones relate to the performance of the technologies acquired through the takeover.
Any value attributed to this holding reflects both the amount of the future value potentially receivable
and the probability of the milestones being met within the time frames in the CVR agreement.
Shareholder information
Annual Report and Financial Statements 2024
128
129
Baillie Gifford US Growth Trust plc
Company
information
Depositary
The Bank of New York Mellon
(International) Limited
160 Victoria Street
London
EC4V 4LA
Independent Auditor
Ernst & Young LLP
Atria One
144 Morrison Street
Edinburgh
EH3 8EX
Company broker
Panmure Liberum Limited
40 Gracechurch Street
London
EC3V 0BT
Directors
Chair: TJW Burnet
SP Inglis
CRD van der Kuyl
RL Palmer
GD Paterson
Registered office
Baillie Gifford & Co Limited
3 St Helen’s Place
London
EC3A 6AB
Company details
bgusgrowthtrust.com
Company Registration No. 11194060
ISIN: GB00BDFGHW41
Sedol: BDFGHW4
Ticker: USA
Legal Entity Identifier
213800UM1OUWXZPKE539
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
T: +44 (0)370 707 1711
Alternative Investment Fund
Managers and Secretaries
Baillie Gifford & Co Limited
Calton Square
1 Greenside Row
Edinburgh
EH1 3AN
T: +44 (0)131 275 2000
bailliegifford.com
Further information
Baillie Gifford Client Relations Team
Calton Square
1 Greenside Row
Edinburgh
EH1 3AN
T: +44 (0)800 917 2112
trustenquiries@bailliegifford.com
Calton Square, 1 Greenside Row, Edinburgh EH1 3AN
Telephone +44 (0)131 275 2000
bgusgrowthtrust.com