Electrifying returns: Scottish firm makes £13bn from Tesla shares | Money


Elon Musk has made about $60bn (£46bn) as shares in Tesla have rocketed. However, the second-biggest winner is a relatively obscure Edinburgh firm that began snapping up shares in the electric car company in 2012. It has made an extraordinary $17bn from the stock.

Despite a major setback in Tesla’s share price this week, Baillie Gifford, the firm behind the purchases, says it remains a “strong supporter” of the car company.

It runs a century-old investment trust, Scottish Mortgage, plus some other investment funds. Investment trusts are often regarded as slightly old-fashioned, conventional vehicles for cautious investors.

However, eight years ago the fund managers James Anderson and Tom Slater began investing heavily in Tesla, when the shares were changing hands at about $6 each. This week they were trading at about $350, although significantly down from their peak of $498 in late August.

Baillie Gifford’s James Anderson.



Baillie Gifford’s James Anderson. Photograph: Murdo MacLeod/The Guardian

As it built up its investment, Baillie Gifford became the largest external shareholder in Tesla, owning about 5% of the company.

More recently, it has had to sell some of its holdings – like other investment funds it has concentration limits, to make sure that no one company becomes too large within the portfolio.

By 2 September this year, Baillie Gifford held 4.25% of the company, worth $19.7bn.

Speaking then, Anderson said: “We are immensely grateful for the extraordinary efforts and achievements of Tesla in driving forward a transportation and energy revolution in the face of persistent scepticism and often downright hostility.”

Baillie Gifford’s Tom Slater.



Baillie Gifford’s Tom Slater. Photograph: Murdo MacLeod/The Guardian

Baillie Gifford’s small investors are probably also immensely grateful. The share price of the Scottish Mortgage investment trust, where Tesla shares form 13% of the fund, is up by 270% over the past five years.

Other Baillie Gifford funds that hold Tesla shares have also soared. BG American, which has 8.5% of its money in Tesla, has given its investors a return of 332% in the last five years.

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