The Scottish Mortgage Investment Trust, one of the UK’s most prominent growth-focused investment vehicles, is pushing to secure stakes in the next generation of transformative private companies, potentially the next SpaceX, before they hit the public markets.
Managed by Baillie Gifford, Scottish Mortgage has built a reputation for spotting high-conviction growth opportunities early, blending public equities with a significant allocation to unlisted private firms.
Its early bet on Elon Musk’s SpaceX, dating back to 2018, has paid off handsomely. The rocket and satellite giant now accounts for around 15% of the trust’s portfolio, making it the largest single holding.
Recent valuations have pushed SpaceX’s paper value sky-high, with the company recently valued at levels suggesting a potential blockbuster IPO later in 2026.
As SpaceX’s success drives up the value of Scottish Mortgage’s private holdings, currently sitting at about 35% of assets, the managers are seeking shareholder approval for a modest policy tweak. The change would give them greater flexibility to pursue additional private opportunities through follow-on funding rounds.
“Scottish Mortgage’s strategy is to identify tomorrow’s market leaders and inevitably that means hunting for opportunities among private companies,” said Dan Coatsworth, head of markets at AJ Bell. “It tries to get in before the crowd and back businesses through additional funding rounds.”
With high-profile private names like Anthropic and OpenAI also rumoured to be eyeing public listings in the coming year, investors are naturally asking: Who’s next?
Scottish Mortgage’s managers argue that many promising tech firms are staying private longer, forcing forward-thinking investors to look beyond traditional stock markets for the era-defining companies of tomorrow.
The trust wants to position itself to capitalise on this trend, potentially backing the next revolutionary player in AI, space, biotech, or another disruptive field before an IPO sends valuations soaring and crowds in retail and institutional buyers.
But there’s a catch
Private investments come with persistent challenges that haven’t disappeared despite recent successes. Transparency is limited, valuations for unlisted holdings are often irregular and subjective, making it difficult for investors to gauge true progress or risks in real time.
Liquidity is another concern: selling stakes in private companies isn’t as straightforward as trading public shares, and market sentiment toward growth and private assets can swing dramatically.
“However, the issues around a lack of transparency, irregular valuation updates, and liquidity, haven’t gone away with regard to private companies,” Coatsworth said.
That’s likely why Scottish Mortgage is pursuing only a relatively small policy adjustment rather than a major overhaul.
If SpaceX does proceed with its widely anticipated IPO, potentially valuing the company in the trillions and ranking among the largest listings ever, the trust’s private exposure would drop sharply overnight.
That would free up capacity for new private bets, but it also underscores the cyclical nature of such strategies.
Scottish Mortgage suffered during the inflation and rate-hike environment of a few years ago, when growth stocks and private-heavy portfolios faced heavy outflows and deratings.
For now, the trust’s push reflects confidence in its long-term growth mandate amid a wave of potential mega-IPOs.
But as Coatsworth notes, the hunt for the next SpaceX is as much about timing and conviction as it is about navigating the inherent uncertainties of betting big on companies that remain out of the public eye.
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