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Star stockpicker, James Anderson, whose Tesla spot made investors a fortune to retire

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James Anderson has been Baillie Gifford for four decades, with the past 22 years spent transforming Scottish Mortgage from a largely UK-focused trust into one listed on the FTSE 100 index with global assets worth £18.5 billion.

The trust is best known for its holding in Tesla, which has been part of the portfolio since 2013 and has produced spectacular returns for investors since a massive jump in the value of electric car maker.

Since Anderson took to the helm, the trust has returned 1,696.8%, according to data from FE fundinfo, more than four times the FTSE All World benchmark of 345.7%.

He will hand over management duties of Scottish Mortgage to Tom Slater, who has been co-manager on the vehicle since 2015.

Slater will be joined by Lawrence Burns, an investment manager on the firm’s international growth research team.

Andrew Telfer, joint senior partner of Baillie Gifford, said Anderson has been “central to the strategic leadership and growth of Baillie Gifford” over his tenure.

“He has encouraged us to be ambitious as a firm and has instilled a long term, global and index-agnostic approach to our investing,” he said.

“And, most importantly, James has achieved remarkable investment returns for our clients. We are giving our clients a year’s notice that he is leaving the firm.

“Our transition process is tried and tested over generations, and we have developed talented successors in each of James’s teams in recent years.”

Anderson spoke of his “huge admiration” for Slater and Burns: “They are both thoughtful, dedicated and ambitious investors with a willingness to learn and an outstanding ability to partner with great companies

“I couldn’t be happier than to have them as my successors.”

Ryan Hughes, head of active portfolios at AJ Bell, said: “News that James Anderson is stepping down as joint portfolio manager on the Scottish Mortgage investment trust will potentially cause some worry to the thousands of investors who have made fantastic returns over many years.

“However, it’s important to remember how Baillie Gifford work with the investment process being firmly embedded in the team-based approach and experienced investor Tom Slater remaining at the helm.

“With Anderson not stepping back for over a year, this has been well planned with a clear handover process for Lawrence Burns to become deputy manager on the trust to support Slater.

“Anderson has helped build Scottish Mortgage into a phenomenal investment trust over many years with his clear, high conviction approach being a driving force behind its willingness to invest in early stage companies and hold them while they become global winners with Amazon, Tesla and Alibaba all being great examples.

“Since being appointed manager on the trust on the 1 April 2000 he has delivered a staggering 1,700% returning, equivalent to turning a £1,000 investment into £18,000 compared to just £4,440 if invested in the FTSE All World benchmark. These returns have propelled the trust into the FTSE 100, remarkably making it the 31st biggest company in the market.

“For investors, while this announcement may be unsettling, the strength of the team-based approach, long handover period and continuity through Tom Slater shouldn’t result in major concerns.

“Slater has worked at Baillie Gifford for over 20yrs and been a manager on the trust for the last 10yrs ensuring that he knows the portfolio inside out. As a result, I expect no change to the approach which should hopefully give investors reassurance that the investment process will remain intact.”

Nick Wood, fund expert at Quilter added: “Clearly James Anderson has been a key part of the success at Scottish Mortgage and has helped turn it in to the success story that it is today.

While his retirement next year will be unsettling for some investors, they should take comfort in the fact that the co-portfolio manager, Tom Slater, has also been heavily involved with the trust for a number of years.

“Furthermore, Baillie Gifford has a strong and broad analyst team, so certainly in the short-term following his retirement there should not be any disruption.

“Baillie Gifford has a good track record of managing departures like this. We saw a similar transition in its Japan team, with the retirement of Sarah Whitley 3 years ago. This has not resulted in weaker performance so there is at least precedent to go off.

“Baillie Gifford have clearly been hugely successful across a number of regional products, and I would argue it is the process and philosophy behind the organisation which breeds success, although clearly Anderson’s departure will be a loss of experience.”

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