Baillie Gifford launches unicorn fund

Scottish fund manager Baillie Gifford has launched a new fund for institutional investors that will target “unicorn” businesses, or new tech start-ups which reach a valuation of $1 billion will still remaining privately owned.

The fund, called the Schiehallion Fund after a Scottish munro, or hill over 3,000 feet high, has been set up as a closed-end fund. Baillie Gifford has received backing from a group of North American pension funds, including the Florida Retirement System. The fund aims to raise up to $600 million (£454 million). Baillie Gifford said it plans to hold stakes in 20 to 60 rapidly growing companies, in order to treble investors’ capital over a 10-year period. The fund is not suitable for retail investors, as it will invest in illiquid assets, so investors must be prepared to remain invested with the fund. It will be managed by Peter Singlehurst, who heads Baillie Gifford’s unlisted equities team, and Mark Urquhart.

In its prospectus for the fund, Baillie Gifford said that the internet has created an environment for companies to grow more rapidly than ever before. “In Baillie Gifford’s view, businesses have never before been able to develop so quickly and to such scale, in as many industries and geographies as they are today. Baillie Gifford believes that this ability has been facilitated by technological change and the business model innovation that such change unlocks.”