JAMES Anderson, co-manager of the £5 billion Scottish Mortgage Investment Trust, fears equity markets are “failing” to enable future entrepreneurial success and says most of the fund’s “emergent opportunities” are now in unquoted stocks.

He also flags the strongly performing trust’s “objectives and purpose”, in its annual report, writing: “We aim to support companies that contribute to productive innovation, and that will eventually prove to possess deep competitive moats.

“Very often this means the companies we back are addressing hard problems. It is in solving deep challenges that the greatest opportunities and rewards lie.”

He notes solving such challenges takes “determination and unusual skills”.

He says: “Over...time – often measured in decades – such unusual enterprises can generate abnormal profits and unusually high shareholder returns. So our objective is to help in the creation and improvement of such useful enterprises.

“If, in contrast, we merely see investment management as speculating – or rather guessing – which stock, sector or geography will give the best returns over the next year then we neither deserve high returns, nor are likely to obtain them over anything other than carefully defined short periods.”

The trust invested successfully in Alibaba ahead of the Chinese online marketplace operator’s 2014 flotation.

Mr Anderson, noting the trust expects the bulk of emergent opportunities to lie in unquoted companies for the foreseeable future, says: “We fear that equity markets are failing in their primary responsibility of encouraging and enabling future entrepreneurial success.”