THE £2.34 billion Scottish Mortgage Investment Trust has put its faith in social networking giant Facebook, which has made headlines this year with a troubled flotation on Wall Street.

Scottish Mortgage spent a total of about £30 million on building up a stake in Facebook during the six months to September 30, and this holding was worth about £23m at the half-year-end.

Commenting on Scottish Mortgage's half-year results, published yesterday, trust chairman John Scott described the Facebook stake as "a controversial investment, but one which has considerable scope to become increasingly profitable over the long term".

Shares in California-based Facebook tumbled in the immediate wake of its flotation in May.

James Anderson, a partner of Edinburgh-based Baillie Gifford and lead manager of Scottish Mortgage, said the trust had bought a stake in Facebook when it floated in May and had added to this later at a lower price.

Noting the £30m total purchase price of the stake and its £23m valuation at September 30, Mr Anderson said of Facebook's contribution to the performance of Scottish Mortgage's portfolio: "So far, it has not been a great help."

However, he emphasised how impressed he had been by Facebook's management and highlighted the social networking site's recent success in winning significant advertising revenues with its platforms for mobile devices.

Referring to Facebook co-founder and chief executive Mark Zuckerberg and his management team, Mr Anderson said: "We have had a couple of meetings with Mark Zuckerberg and [meetings with] a couple of other people [in the management team]. We think they are very, very good. Just because of the fact he [Zuckerberg] wears a hoodie doesn't mean we should despair of him as the leader of a company for potentially the next 50 years."

Scottish Mortgage revealed it had also taken stakes recently in Alibaba Group, an unlisted Chinese online market site, and in luxury goods company Burberry, while completing the sale of its stake in Russian gas supplier Gazprom. Mr Anderson said Gazprom had been a "very large holding" for Scottish Mortgage in the past, but highlighted the fact the stake had been small in a portfolio context ahead of the trust's final exit from the stock during the six months to September 30.

He noted that, while Alibaba was unlisted, it was held heavily by institutional investors, as Facebook had been before it floated.

The net asset value per share of Scottish Mortgage, which has tens of thousands of private investors, fell 1.5% to 757.4p during the six months to September 30. This matched a 1.5% fall in the FTSE All-World Index in sterling terms.

Mr Scott said the "optimistic mind-set" of the trust's managers was "neither fashionable nor diminishing".

Asked if he was still upbeat about investment prospects, Mr Anderson replied: "To be honest, more so. My feeling is we are a lot better off than we were six months ago, in that it seems to me quite clear, to be honest, that the eurozone is not about to fall apart."

While emphasising he had not thought the eurozone would fall apart, Mr Anderson added: "I think one can be a lot more definite about that than previously."

He noted some people were attributing the improved eurozone picture to the efforts of the European Central Bank, but highlighted his belief that the better sentiment had also arisen because people "see serious reform efforts in southern Europe".

Commenting on the global economic outlook, Mr Anderson said: "Broadly speaking, I think [people] remain far too nervous."

Taking issue with some people's worries about China, Mr Anderson said: "We think the...slowdown is exactly as the government has wanted, and is actually better for the rest of the world."

He noted this slowdown was helping China become more reliant on domestic demand and helping reduce commodity prices.

Scottish Mortgage is raising its interim dividend to 6.7p a share. Its payout for the first half of the prior financial year was 6.2p a share.