Scottish Mortgage Tightens Buyback Trigger as AGM Vote Looms Over Private Assets
17.06.2026 - 08:05:44 | boerse-global.de
The boardroom battle at Scottish Mortgage Investment Trust is heating up. With shareholders set to vote on July 2 in Edinburgh, the fund’s management has been aggressively buying back its own stock — buying 2.325 million shares on June 16 alone at 1,486.19p apiece, more than double the million shares snapped up the previous day at 1,445.21p. The message is unmistakable: the trust is determined to defend the gap between its share price and net asset value.
That gap has been persistent. Although the stock has climbed 23% since the start of the year to 17.09 euros — roughly 12% below its all-time high from May 2026 — the market price still trails the underlying portfolio value. To close that discount, Scottish Mortgage has overhauled its buyback policy: from now on, it will purchase shares only when the price falls below the NAV. The old, more generous support strategy is gone.
The shift in gear was on full display in June. Early in the month, the trust was still placing new shares at prices above the NAV — for instance, 1,516.50p on June 1 and 1,545.42p on June 2. Within weeks, the pendulum had swung and buybacks were under way. Over the two most recent financial years, Scottish Mortgage repurchased a total of 307.7 million shares, equivalent to about 22% of the then-outstanding float, for a combined £1.31 billion.
Three votes that could reshape the portfolio
The buyback flurry comes just days before the annual general meeting, where three critical resolutions will be decided. The most contentious concerns the ceiling for private, unlisted investments. Currently capped at 30% of total assets, the trust has already blown past that limit — private holdings now account for roughly 41% of the portfolio. SpaceX alone represents 21% of the fund. Management is asking for the cap to be raised, potentially by £250 million, effectively legalizing its existing exposure and paving the way for even more private bets.
Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?
Shareholders will also vote on a new buyback authorization: permission to repurchase up to 14.99% of outstanding shares, but exclusively at a price below the NAV. The third item is the final dividend, which will be paid on July 10 at 2.97p per share, bringing the full-year payout to 4.57p — a 4.3% increase marking the 43rd consecutive year of dividend growth. That makes Scottish Mortgage an AIC Dividend Hero, though the dividend is not fully covered by earnings: total distributions of nearly £50 million exceed net profit of around £25 million.
Strong performance but headwinds from private markets
Despite the governance tensions, the trust’s investment record is robust. Over the past twelve months, the NAV gained 27%, comfortably beating its benchmark. Over a decade, the return exceeds 435%. Institutional interest remains solid — Mitsubishi UFJ Asset Management recently built a roughly 3% stake.
Yet the private-market environment is getting tougher. A Bain & Company analysis cited by the trust warns that dealmaking has slowed sharply: technology transaction volumes fell 70% between the fourth quarter of 2025 and early 2026. Software valuations are under pressure, the private-credit market is showing cracks, and rising oil prices linked to geopolitical uncertainty are dampening sentiment. For a fund with more than 40% of its assets in unlisted companies, those headwinds are impossible to ignore.
The July 2 vote will decide whether the board can continue its aggressive private-market strategy — or whether shareholders will force a rebalancing. With the buyback surge already signaling management’s determination, the contest over the risk profile is set to be the defining moment of the year for the trust.
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