US Growth and Scottish Mortgage own the same champions, but not the same liquidity risk

Baillie Gifford US Growth and Scottish Mortgage provide access to several of the same growth companies before or around their public listings. SpaceX, Stripe, Anthropic, Databricks and Zipline have created value in both portfolios. But common exposure does not create the same risk: US Growth is smaller and directly challenged by Saba, while Scottish Mortgage has far greater scale but uses more debt.

Two listed gateways to private companies

US Growth and Scottish Mortgage are UK investment trusts: listed companies that own portfolios of investments. Their shares can be traded each day even when part of their underlying assets does not trade on a stock exchange.

The structure creates two prices. NAV estimates the value of assets after debt. The trust's share price is set by the market. If investors doubt the value or liquidity of private assets, the shares can trade at a discount to NAV. If a private holding is marked up, NAV can rise without the trust receiving any cash.

Our article on Zipline's revaluation in both trusts showed this distinction through one holding. The annual reports now allow us to extend it to the full architecture of the private portfolios.

US Growth: an excellent year powered by assets that were hard to sell

For the year ended 31 May 2026, US Growth produced a 31.0% NAV total return, compared with 29.8% for the S&P 500 in sterling. Its share price returned 44.5%. The discount, 9.4% a year earlier, had almost fully closed to 0.1%.

The performance was impressive, but its source is essential. Four of the top five contributors were private at the time: SpaceX, Anthropic, Stripe and Databricks. Alongside Zipline, they formed the core of the unlisted portfolio.

The risk was therefore not just the 45.0% level. It was also internal concentration: the five largest positions represented 78.1% of the private book and the top ten 88.3%. A small set of valuations could exert a disproportionate influence on NAV.

SpaceX's listing changes the category, not the economics overnight

SpaceX listed on 12 June. By 14 September, US Growth said its private allocation had fallen to 28.9%. This drop of more than sixteen percentage points does not mean the trust sold SpaceX or realised all its value. The asset simply moved from the private column to the listed column.

That nuance matters in the dispute with Saba Capital. Our analysis of the proposed exit and October vote explains why a price close to NAV is not enough: the cash paid to departing shareholders must be funded without damaging the remaining portfolio. SpaceX's listing can improve that equation. It does not turn Anthropic, Stripe, Databricks or Zipline into immediate cash.

US Growth also had two fully drawn $25m revolving credit facilities at year-end. They were refinanced on 30 July through a new unsecured $50m three-year facility. Net gearing was still limited to 3% at 31 May, but available borrowing capacity should not be confused with a free reserve of cash.

Scottish Mortgage: the same names inside a much larger machine

Scottish Mortgage follows a similar philosophy: hold businesses capable of scaling over long periods, whether listed or private. At 31 March 2026, private assets represented 41.5% of the portfolio. SpaceX was then above 19% of assets, followed by ByteDance at 4.7%, Stripe at 4.0%, Zipline at 2.0%, Databricks at 1.4% and Anthropic at 1.1%.

SpaceX alone contributed 14.9 percentage points to annual portfolio performance, while Stripe contributed 1.9 points. NAV total return reached 27.4%, compared with 18.0% for the benchmark. Here too, value creation depended heavily on a few growth companies that were private at the start of the period.

At 31 July, after SpaceX's listing, Scottish Mortgage reported 23.0% in private assets across 52 companies. Total assets stood at £16.66bn, borrowings at £1.54bn and net gearing at 10%. The shares traded at 1,330.50p against NAV of 1,446.12p, an 8.0% discount.

The percentages are not perfectly synchronised: US Growth's 28.9% is from 14 September, while Scottish Mortgage's 23.0% is from 31 July. The number of holdings, market movements and denominators differ. The comparison is designed to explain structure, not declare a winner to one decimal place.

The same winners, four decisive differences

1. Scale

Scottish Mortgage controls more than £16bn of assets. It can absorb a substantial holding within a broader base. US Growth, close to £1bn in recent market comparisons, is more affected by the same percentage position and has less depth to fund a mass exit.

2. Concentration

US Growth reports extreme concentration within its private allocation. Scottish Mortgage owns more private companies, but its SpaceX holding was itself enormous before listing. Diversification by count therefore does not eliminate economic concentration.

3. Gearing

US Growth reported 3% net gearing, against 10% for Scottish Mortgage in its July factsheet. Gearing can amplify NAV gains when assets rise and erode NAV faster when they fall. It also reduces room for manoeuvre if a board has to sell into a difficult market.

4. Governance

US Growth faces a concrete demand for board change and liquidity. Scottish Mortgage shares several assets and the same manager, but not the same demonstrated dispute. It would therefore be misleading to say Saba is targeting both. The proper link is mechanical: the same private holdings create the same valuation and liquidity questions, with different consequences depending on each vehicle's scale and governance.

Opulion view

US Growth's results show why investors accept illiquidity: SpaceX, Anthropic, Stripe and Databricks delivered most of the recent outperformance. They also show why the market sometimes demands a discount: a calculated value guarantees neither an immediate buyer nor the same price in a forced sale.

Scottish Mortgage provides the useful counterpoint. Its scale makes the private allocation easier to absorb and the portfolio contains more holdings. Yet SpaceX dominated its performance and its gearing is higher. Size protects against some shocks, not against a bad valuation or a simultaneous decline in growth assets.

The best monitoring framework therefore goes beyond the private-asset ratio. Five questions should be separated: which company creates the return, what share of the portfolio it represents, how it is valued, how quickly it can be sold, and how much debt sits above the portfolio.

For US Growth, the next test is also political: shareholders must choose between portfolio continuity and an exit mechanism. For Scottish Mortgage, the test remains the gap between a NAV supported by growth champions and shares that retain an 8% discount. In both cases, SpaceX's listing reduces measured illiquidity. It removes neither concentration nor market risk.