Scottish Mortgage will ask shareholders on 10 April to approve an amendment allowing it to breach its 30% cap on private company investments by up to £250m.
The £15.2bn trust's private company exposure stood at 37.2% of total assets as at 28 February, driven largely by SpaceX, which alone represents 15.4% of the portfolio. The existing investment policy prohibits new or follow-on investments in private companies once the 30% threshold is exceeded, effectively constraining the managers until exposure falls back below the limit.
Tom Slater, FE fundinfo Alpha Manager of Scottish Mortgage, said: "Our role is to be patient, long-term partners to exceptional private companies as they continue to scale. From time to time, market movements can restrict our ability to make further investments in private companies."
The proposed £250m buffer would allow the board to permit managers to make a small number of both follow-on and new private investments while the portfolio remains above 30% allocated to private companies. The flexibility would be subject to annual shareholder approval from the 2027 AGM onwards.
Private company exposure can rise without new investment due to factors including quoted valuations of public holdings falling, revaluations of private companies or share buybacks. SpaceX's valuation was uplifted in December 2025, pushing the trust further over its threshold.
Matthew Hose and Fiona Huang, equity analysts at Jefferies, described the proposal as "a pragmatic solution to the situation the fund currently finds itself in". They noted the £250m represents just 1.7% of total assets, yet is larger than the valuation of all but four of the trust's private holdings.
An expected SpaceX IPO in the middle or latter part of this year would likely bring private company exposure back below 30%, freeing up capacity without the need for additional flexibility. However, the board argued that waiting for the IPO could mean missing opportunities to support existing holdings or compelling new investments in the interim.
The amendment ensures board governance remains in place, with the £250m cap applying for the duration of any period when exposure exceeds 30% and resetting at each AGM regardless of how many times the threshold is breached during the year.
Earlier this month, Slater acknowledged that the single-company concentration in SpaceX is Scottish Mortgage's biggest vulnerability. However, “the challenge is often the thing you didn't account for,” and diversification across the rest of the portfolio should help.
On the risk surrounding SpaceX owner Elon Musk, whose political profile has become a live question for many investors, Slater said: “This is an individual who has created an enormous amount of shareholder value, both generally and specifically for Scottish Mortgage shareholders over the past 10 to 15 years. I do not spend much time thinking about Musk as a risk”.