JAMES Anderson, manager of Baillie Gifford's £2.4 billion Scottish Mortgage Investment Trust, has said most British companies have been ruined by pay policies that encouraged short-term thinking.
Scottish Mortgage is a major backer of technology companies, with stakes in the likes of American giants Amazon, Facebook, Google and Apple.
Mr Anderson, based in Edinburgh, is particularly keen on those managed by their founders who retain an interest in their product development. But he has invested closer to home, with one exception being Glasgow-based temporary power company Aggreko, which is benefiting from growth in emerging markets.
He said: "There are few British companies that have not been ruined by the remuneration structures that were set up for them in the past few decades."
Baillie Gifford's 100-strong investment team is a major force in Scottish fund management but Mr Anderson is highly critical of the industry at large.
"Most of what goes on in fund management is really rather stupid," he told an audience at the London Stock Exchange. "I see no evidence that the financial services industry is able to become long-term in its thought processes."
He was particularly damning of those listed on the stock exchange.
Mr Anderson said the domestic investment industry is too focused on information from sources in the UK and US. "Why would anybody believe what anybody in London says about Europe? They have been consistently wrong about it for 70 years, if not the last 700 years. Why not ask some Germans?"
He said he expected the investment scene to be dominated by a few companies with highly destructive models in the way that Amazon has put pressure on the likes of camera store Jessops and entertainment retailer HMV, both of which have entered administration in recent days.
Mr Anderson also said he would not retire until shares in the trust trade at a premium to the value of the underlying portfolio. It is currently on a discount of around 6.5%, according to the Association of Investment Companies.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article