Scottish Mortgage Rewrites Its Playbook: Premium Pricing Finances Private-Equity Push as SpaceX Bet Tops 19%

Scottish Mortgage Investment Trust taps premium share price to raise capital for private equity; SpaceX drives strong results with 27% NAV growth, marking 43rd year of dividend increases.

Scottish Mortgage Investment Trust has turned a corner that many closed-end funds only dream of: shares now trade at a premium to net asset value, giving management the firepower to raise capital and deepen its bet on unlisted companies. The board recently authorised an additional £250 million capacity for private-equity investments, a move designed to prevent forced sales when portfolio companies need follow-on funding.

The trust placed 1.15 million new shares from treasury on Wednesday at 1,502 pence each, above NAV. That came just two days after another 1.25 million shares were issued. All told, the trust has now sold 2.4 million new shares in quick succession — a striking reversal from the start of the year, when Scottish Mortgage was still trading at a discount. Since January, the share price has climbed roughly 27 per cent.

Performance that beats the market

Behind the price action lies a strong set of annual results. Net asset value rose 27.4 per cent over the fiscal year, while the share price gained 26.8 per cent. The FTSE All-World index managed 18 per cent. Total assets under management stood at £16.1 billion at the balance-sheet date. The current share price, though still about 6 per cent below the 52-week high, has advanced almost 28 per cent since the start of 2026.

The single biggest contributor is SpaceX, Elon Musk’s rocket-and-satellite company. It now accounts for more than 19 per cent of the portfolio, and Scottish Mortgage values the private firm at $1.25 trillion — a figure chairman Christopher Samuel described as reflecting a “significant revaluation after an operationally strong year”. Portfoliomanager Tom Slater calls SpaceX a “dual monopoly”, dominating both launch services and, via Starlink, the satellite-communications utility space. He points to Starlink’s potential for software-like margins as a key driver of the valuation.

Private markets get a fresh capital cushion

The trust is using its new premium rating to expand private-company exposure without breaching the 30 per cent cap on unlisted holdings. In the fiscal year to March 2026, £254 million flowed into private businesses, nearly double the prior year. New additions included the AI developer Anthropic, animal-health specialist Loyal Animal Health, and the social platform RedNote. Existing holdings such as Redwood Materials, Enveda and Zipline received follow-on financing.

Scottish Mortgage originally invested about £150 million in SpaceX. That stake is now worth several billion pounds, and the closed-end structure means the trust can hold through any future initial public offering without being forced to sell.

A dividend hero, 43 years running

For income-focused shareholders, the trust remains what the Association of Investment Companies calls a “Dividend Hero”. The board has proposed a total dividend of 4.57 pence per share, up 4.3 per cent year-on-year — the 43rd consecutive annual increase. The final payout of 2.97 pence is scheduled for July 10, 2026.

Ongoing charges stay low at 0.33 per cent, with no performance fees. The gearing ratio has fallen to roughly 11 per cent, and the average cost of debt, after several refinancings, is about 3.6 per cent. That leaves plenty of headroom for both the dividend policy and further private-market commitments.

The combination of a 43-year dividend streak, a dominant SpaceX holding valued at $1.25 trillion, and a newly flexible capital-raising ability puts Scottish Mortgage in a rare position — offering steady income while doubling down on the most volatile corners of innovation. Whether that balancing act holds depends on whether the premium can be sustained and whether SpaceX’s valuation continues to climb. For now, investors are buying the whole story at a premium price.