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Scottish Mortgage chief hails long-term Facebook benefits

The love affair between the 105-year-old Scottish Mortgage investment trust and the world's raciest technology companies has delivered returns beyond expectations, manager James Anderson has said.

The £2.6 billion trust managed by Baillie Gifford in Edinburgh returned 12.1% in its first half - trouncing the 0.4% fall in the world index - from its highly concentrated global portfolio where 30 stocks account for 80% of the assets. It recently overtook Alliance as the UK's biggest investment trust.

"Stock markets are not a matter of most companies going up a bit," Mr Anderson said. "The vast majority of returns are generated by a very small number of companies."

The trust's long-term philosophy has also given Mr Anderson and co-manager Tom Slater favoured access to the likes of Facebook and Amazon, its biggest shareholding, Mr Anderson told an Edinburgh seminar.

"We bought shares in Facebook at the time of the IPO, we didn't sell any and have bought some more," Mr Anderson said. "Both Tom and I get to have meetings with Mark Zuckerburg, who can tell us what is going on... and when Twitter comes to float we will get the largest allocation of anyone not a previous shareholder: because people trust you."

Mr Anderson, who is leading the UK's new Investor Forum aimed at boosting the influence of institutional shareholders, went on: "So few people are playing that game of trying seriously to provide long-term support for companies that the benefits are enormous. And the more we help companies to be long-term, the more they will be better managed, the more they will help you."

He added: "We are so powerful and have so much wealth at our disposal - it is our fault that an awful lot of stuff has gone wrong in the world, like in investment banking. I really believe that we ought to able to do a better job."

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