Accessing the next generation of growth
As IPO timelines stretch and private companies scale further before listing, the Schiehallion Fund bridges the gap between private innovation and public markets.
Over the past few decades, many of the world’s most influential companies reached the public markets at a stage when products were still evolving and global scale remained largely unrealised. Today, the picture is markedly different.
Amazon and SpaceX provide a useful point of comparison. Amazon has grown roughly 5,000-fold to almost $2.5tn since its IPO nearly 30 years ago. Baillie Gifford’s first investment dates to 2004, when the stock was still recovering from the dotcom bust and many investors remained sceptical about its long-term prospects.
‘When Amazon listed in 1997, it was valued at under $500m – essentially an online bookstore,’ said Peter Singlehurst, partner at Baillie Gifford and co-manager of the Schiehallion Fund. ‘Almost all the value creation – from the expansion of Amazon Marketplace to the launch of Amazon Web Services – happened in the public markets.’
Compare that with SpaceX, currently valued at around $800bn and still privately owned. ‘A huge amount of value creation is happening before IPO,’ Singlehurst said. ‘That contrast really captures what private growth means today.’
What has changed, he argues, is the pace and timing of when companies choose to list. ‘Companies with real products, real customers and substantial revenues are no longer in a rush to go public. The market has evolved – and Baillie Gifford has evolved with it.’
‘These are the growth powerhouses of the world, with no signs of slowing down’
The scale of the shift over the past 15 years is striking. When the term ‘unicorn’ was coined in 2013 to describe a privately backed company valued at more than $1bn, it was intended to underline how rare such businesses were. At the time, there were 39 globally. Today, PitchBook’s unicorn tracker identifies almost 1,600 active unicorns.
Private growth companies span sectors from aerospace and artificial intelligence to payments, healthcare and consumer platforms, forming a $6tn opportunity set that is largely inaccessible to most investors.
‘You can buy Amazon shares on your phone in seconds,’ Singlehurst said. ‘You can’t do that with Databricks or Stripe. Schiehallion exists to give investors access to exceptional growth companies that are otherwise very hard to invest in.’
That access is reflected in the portfolio itself. Schiehallion holds stakes in six of the world’s 10 largest private companies, with around two-thirds of assets exposed to profitable businesses. ‘These are the growth powerhouses of the world,’ Singlehurst added, ‘with no signs of slowing down.’
Compounding at work
For the team behind Schiehallion, the appeal of private growth ultimately comes down to one thing: transformational growth. The fund invests in private companies valued at $500m or more, mostly with at least $50m in annual revenues and, crucially, revenue growth of at least 35% at the point of investment.
In practice, that growth is often far higher – typically 70-75%. While growth rates naturally moderate as companies scale, sustaining elevated levels for extended periods creates powerful compounding effects.
‘The main driver for private growth companies is revenue growth – that’s where value creation comes from,’ Singlehurst said. ‘If you can compound at 35% for a decade, that’s the power of the asset class.’
Weighted average revenue growth across the Schiehallion portfolio is 54% at present, rising to 66% for the top 10 holdings, compared to 19% for the Nasdaq 100. During 2025, operational progress drove a 35% increase in the fund’s net asset value.
Since inception, the three largest contributors to returns have been SpaceX, Affirm and Bending Spoons. Buy now, pay later fintech Affirm listed in early 2021 and remains a top ten position despite Schiehallion realising more than $60m from the investment. Bending Spoons and SpaceX are the top two positions, each accounting for around 14% of the portfolio.
‘SpaceX has one of the strongest competitive moats we’ve ever seen in a business’
‘This is the asymmetry that defines high-growth investing,’ Singlehurst said. ‘Some investments don’t work out, but the best investments have delivered huge multiples of invested amounts. While the downside is limited to the capital invested, the upside is unlimited.’
SpaceX is the clearest illustration of that dynamic. When Baillie Gifford first invested, the rocket-and-satellite business was widely viewed as an ambitious engineering project rather than a commercial enterprise. What followed, Singlehurst argues, was a fundamental shift in the economics of spaceflight.
‘SpaceX has one of the strongest competitive moats we’ve ever seen in a business. It cut launch costs to levels that left competitors far behind. That cost advantage is now translating directly into profits,’ Singlehurst said.
Its largest rocket system, Starship, deployed its first payload into orbit last year, while its satellite constellation business, Starlink, launched its 10,000th satellite. Now a meaningful and increasingly cash-generative part of the company, Starlink is extending connectivity to remote regions and is expected to roll out services with major airlines, including British Airways, Emirates and Virgin Atlantic, in 2026.
Italian acquirer Bending Spoons reflects a different but equally powerful expression of the same compounding logic. Baillie Gifford invested in the company in 2023, shortly after it acquired Evernote. Since then, it has added businesses including Vimeo, AOL, Eventbrite and Meetup.
‘We can’t wait to see how it will improve these businesses operationally and financially, just as it has done with Evernote,’ Singlehurst said.
The next generation
After a busy period of deployment, Schiehallion is now fully invested – a milestone that reflects both improved conditions for private growth and the fund’s ability to recycle capital efficiently.
During 2025, the trust exited its remaining Treasury bill holdings and made eight new investments. By year-end, listed holdings accounted for around 13% of assets, providing an important source of liquidity as new opportunities emerge.
One of those new investments was AI frontier lab Anthropic. Having followed the business for several years before committing capital, Baillie Gifford was drawn by growing evidence that a focus on safety and enterprise-grade solutions could support a durable, long-term business.
‘While we could see the power of the product, we don’t invest in products, we invest in businesses,’ Singlehurst said. ‘What moved us over the line was seeing the shape of a sustainable business model start to emerge.’
That discipline matters as the IPO market begins to reopen. Several Schiehallion holdings have listed recently – including neobank Chime and medical technology firm HeartFlow – with several more expected to do so over the coming years.
SpaceX has been increasingly open about its long-term IPO ambitions, and a future listing – widely speculated to value the company well north of $1tn – would rank among the largest flotations in history.
Importantly, Singlehurst argues that valuations across much of the private growth universe remain reasonable relative to public markets, particularly outside the most crowded areas of AI. Many of the companies Schiehallion backs today are growing far faster than listed peers, yet trade on lower multiples.
‘There is the potential for 2026 to see some blockbuster IPOs,’ he said. ‘That matters for us – not just as exits, but as a way to recycle capital into the next generation of exceptional growth companies.’
