Scottish Mortgage Prepares for AGM Showdown as Staggered SpaceX Lock-Up and Aggressive Buybacks Reshape Trust's Strategy

Scottish Mortgage buys 2.3M shares in one day, enforces discount-triggered buybacks as shareholders vote on raising private equity limit from 30% to match 41% portfolio reality.

Scottish Mortgage Investment Trust has ramped up its share repurchase activity in an unusually aggressive push, buying 2.325 million shares on June 16 alone – more than double the previous day's volume. The Edinburgh-based trust is now enforcing a strict discount-triggered buyback mechanism, only purchasing stock when the price falls below net asset value. The move comes just weeks before a pivotal annual general meeting on July 2, where shareholders will vote on whether to raise the limit on unlisted investments from 30% to a level that matches the current reality of the portfolio.

That portfolio already holds nearly 41% in private equity, far exceeding the existing cap. The biggest single bet is SpaceX, which now accounts for more than a fifth of total assets. The space company recently made its market debut, and analysts estimate Scottish Mortgage's stake is worth roughly £3.5 billion – a stunning revaluation from an original investment of £151 million that has grown to nearly $5 billion in dollar terms. But the IPO comes with a carefully staggered lock-up period, not the standard 180-day freeze, which gives the manager Baillie Gifford room to sell in measured steps.

Under the staggered schedule, up to 20% of the shares will become available after the second-quarter earnings are published. A further 10% can be sold if the stock trades at least 30% above the IPO price. Thereafter, five tranches of 7% each can be released, with another 28% freed after the third-quarter results. Founder Elon Musk remains barred from selling for 366 days. This gradual exit plan is designed to avoid flooding the market and putting pressure on the trust's own share price.

At the AGM, investors will also vote on a renewed buyback authority and the 43rd consecutive dividend increase. The board is asking shareholders to formally approve a higher private-equity ceiling, effectively retroactively legitimizing the current portfolio composition. If the motion fails, the trust would be forced to sell down some of its most prized holdings – a prospect that has sharpened the debate among fund holders.

In the meantime, institutional money is flowing in. Mitsubishi UFJ Asset Management snapped up a roughly 3% stake earlier in June, taking advantage of recent volatility to build a strategic position. The trust also holds a £400 million book-value stake in Anthropic, the developer of the Claude AI model, which filed a confidential IPO prospectus with the SEC in early June. A successful listing later this year could unlock further hidden gains and add to the case for keeping private assets high.

The shares have responded well to the buyback news, closing recently at €17.26, up 2.49% on the day and roughly 24% higher year to date. The net asset value has climbed 27% over the past twelve months, comfortably beating the trust's benchmark. However, the stock still trades at a discount to NAV, which is what prompted the stricter repurchase policy. The 52-week low of last November is now 44% behind, though the stock remains some way off its high of €19.50.

The debate at the AGM will ultimately decide whether Scottish Mortgage can continue its aggressive private-market strategy. With SpaceX's staggered lock-up about to begin after the second-quarter numbers, and the Anthropic IPO on the horizon, the trust's direction hinges on a single vote. If shareholders back the higher cap, management can retain its concentrated bets. If not, a painful portfolio rebalancing lies ahead.