Why You Might Miss Big Opportunities With Passive Investing, CEO Says | At Barron's
Summary
Tim Campbell, CEO of Baillie Gifford, spoke to Barron’s editor at large Andy Serwer. This interview was filmed on May 12, 2026.
Transcript
Hello everyone and welcome to Eat Brains. I'm Andy Serwer and welcome to our guest Tim Campbell, CEO of Baillie Gifford. Tim, great to see you. Thanks so much for joining us. Nice to be here, Andy. So, uh Baillie Gifford is a Scottish investment management company. Um you have about $260 billion of AUM. Very old school on the one hand, but on the other hand, your investment outlook is anything but. And I'm wondering if you could sort of start us off with that. What is the thesis, the investment thesis, of Baillie Gifford? Yeah, so so you're right. Look, we've been around for 120-odd years. Um and we see our role as trying to find the greatest growth businesses on the planet. Um you know, we we spend a lot of time studying what what drives markets and you know, it's it's not a perfectly distributed bell curve of companies. It is a small handful of companies that do wonderful things. Um and so we are trying to find that very small handful of companies that are driving progress and innovating and trying to give clients exposure to those, whether they be in public markets or private markets. And I think that you've been talking recently about how the market is sort of so oriented towards indexing, benchmarks, that structurally it's sort of veering off course. Is that the case? Uh yes, so you're you're probably um alluding to a concern which I I confess I have about the direction that public markets are heading in. You know, I think there's a reason why so many businesses are choosing to stay private or indeed go from being public to private. And this really comes down to the structure of public markets today. Um if you if you think about it, now over 50% of uh public markets are dominated by passive. And then you add into that things like algorithmic trading, factor-based investing. And look, you know, passive absolutely has its place in the investment landscape. But but interestingly, what we're hearing from the companies themselves is that not really knowing their shareholders um is is a fairly unsatisfying experience. If you think if you go back to first principles, you know, what were public markets there to do? They were there to match up savings capital with ideas. And then help management teams and steward management teams to make good risk-based decisions to invest that capital and then drive progress and so on and so forth. And you think about what makes up public markets at the moment, fewer and fewer people are making those discretionary decisions around how to allocate that capital and helping and supporting management teams to make good long-term risk-based decisions. And ultimately, I think that the concern there is that that might start to actually undermine the sort of returns that one can expect from public markets. How would it do that? Well, if you So, there's there's a lot of actually very useful studies on this. The The one that I read most most recently was um by Professor Cunningham from George uh Washington University. And and he he looked at the shareholder registers of companies. And he said, he made it very very clear that those companies that enjoyed quality shareholders on the register, and by that he meant shareholders who hold a few positions in size, hold it for a long period of time, and then genuinely engage with management. Those companies that had more quality shareholders on their register outperform those with if you like a faceless shareholder register by I think it was 3.4% over decades, you know, long periods of time. So this and that's huge. That makes a massive massive difference to to what companies can expect to achieve. And if you just if you think about the companies that have done brilliantly over the last even you know, take the last couple of decades. And you think about the decisions they had to make to achieve those fantasies. So here I'm talking about things like you know, you'll probably remember when Amazon first came out with Amazon Prime. That their stock price cratered on the back of that because they were going to lose money in the near term. Now now we look back at that now, was that a good or a bad decision? It's a brilliant decision. You know, you look at when Apple launched the iPhone. Uh you know, their stock price more than halved the year after launching the iPhone. Was that a good or a bad decision? It was a it was a great decision. Uh you look at Tesla. You know, we started looking at that company in 2012. We first invested in 2013. And for about the next five or six years the market was obsessed as whether that company was going to go bust or not. I think it was one of the most shorted companies on the planet because it was making difficult long-term decisions that were going to depress near-term profitability. And I think our ability to support those companies through these difficult risk spaces is and to be clear, you know, Tesla that there was a chance that it did go bust. But having shareholders on their register that will support them through these difficult decisions I think is absolutely vital to the positive functioning of public markets. And it sounds like you're not just an executive uh running the company, you're a practitioner, an investing professional or have been for many years, correct? Well, well, to be clear, my my history of the company was I started back in 1999 on the investment graduate program after a failed career as a music teacher. Hm. Um and then >> Condolences there. Yes, I I probably just didn't have the patience at the time, which I've now been taught by having lots of children. Um but so I started on the investment floor and lastly was an investor in our emerging markets team, which I I loved and then I moved over to the the the client service side in 2007 before taking up my my new role at the company. So it's it looks so easy, Tim. I mean, you look back and it's like, well, of course Amazon was a success and of course Nvidia is a success, but as you've alluded to, it's not so easy at the time. So everyone wants to know, how do you identify them at the time before they go parabolic, if you will? Yeah, and and you're right, it's it's not easy, but there are some very conscious decisions that we make in in how we approach the investment task that I think uh give us a better chance than most of doing that. And I think there's a couple of things. First of all, you need to accept the inevitable uncertainty of investing in these things. Um second, I think you have to approach it with the mindset of what could go right here rather than all the myriad of things that might go wrong. You know, we we we have this horrible phrase in the investment industry of cautious optimism. You know, everybody's cautiously optimistic. Well, try being wildly optimistic because when you look at those businesses that have done terrifically well, it is those that go on to achieve extraordinary things. And actually, you look at our research on Nvidia or Amazon or Tesla, the biggest mistake we tended to make was not being optimistic enough about what they were going to achieve. So you have to have that mindset. >> But surely you've had some failures, right? And you Absolutely. Bet the barn on something and it was just didn't work. >> Yeah. I mean, we look, um there's there's no way you can get through this industry without making a lot of mistakes. Um and that's that's part and parcel of it. But the wonderful thing about investing in equities is that asymmetry of returns. You know, you when something go up a thousandfold and all you can lose is all of your money, which I know in in a stock I know that sounds peculiar, but but you see the point that I'm making is that um you have to give yourself the best possible chance of having those stocks that really can go parabolic. And another interesting facet of this, I think, is when to sell. Um at some point these things run out of steam. How do you make that decision? Yeah, and look, I think that is um that's absolutely critical and I think that is one of the hardest things to do for a very long-term growth investor because there's always that excuse, right? You know, I'm not I'm not wrong, I'm just not right yet. But you you have to um accept that sometimes you just need to move on. And one of the things we find most useful that is going back to the original investment case. Be honest with yourself. This is why we invested in this company. If it started to veer off that path, hold yourself to account um and make absolutely sure you learn from those mistakes. But sometimes veering is good though. I mean, it's not so easy. Like, for instance, changing your how you distribute movies for Netflix, one of those cases where everyone thought they're going down the drain, Netflix, of course. And they didn't. Yeah. No, you're absolutely right. And I think this is where we've been very lucky that we have extraordinary access to the management teams of these companies that are driving performance. >> that by dint of the your history? I It really is and I think um it's it's hard one as well. It is the reputation that you build up over decades and decades of taking your job seriously, of supporting companies through the inevitable ups and downs of when people are trying to do something which is very difficult. It is progress is never linear. The fact that we have gained a reputation for being those shareholders who will support you through the inevitable ups and downs, so long as we understand what you're trying to achieve and how you're trying to achieve it, that's why management teams want us on their shareholder register. A huge sea change over the years, of course, is the the explosive growth of private markets and it's nothing like the dot-com era where everyone was racing to go public. Now they're racing not to go public, if you will. Um and some people have suggested that by the time they go public, the movie's half over. That this is a sign of middle age and my question is just when we got commissions so far down in public markets to the benefit of shareholders, now they have to pay these fees to people like yourself um to get access to these private companies. Is that fair? I think parts of that are, being quite quite frank. Fair or unfair? No, I think parts of that is is fair. To be clear, we see our role as offering clients exposure to the best growth companies on the planet. And we want to give them exposure to the steepest part of that growth curve. So you're absolutely spot on in saying that more and more of that part of the growth curve now exists in private markets. So you have to have a presence in private markets. I should say that, you know, the history of our firm is uh, first client, our longer standing client, which we've had for almost 120 years, is an investment trust in the UK called Scottish Mortgage, and it's about $20 market cap um company, and about 35% of that investment trust is in private companies. Up from a a tremendously over the past 10 20 years, right? >> Um, and [clears throat] that uh the total expense ratio on that is 31 basis points. So, as a means to democratize access to the best growth businesses on the planet, that is the best means bar none. And in the US though, now that's for UK investors. I mean, you can get in there, but you usually have to pay more if you're here. I'm being very US-centric, apologies. But, you have uh investment [snorts] vehicles here in the US, right? >> We do. We have some of the classic, you know, GP LP structures, which I should say don't don't charge what others do. We are trying very hard to democratize access to these companies. But, I think it always goes back to where the conversation we were having before about you know, I I think there is there is a real risk um because of what we're seeing in public markets. I think it's a shame that more companies aren't in public markets, but there are reasons for that, which comes back to, you know, the unsatisfying experience that management have in public markets of that engagement with shareholders. >> Is that Oh, how much do you think is because of that, or how much do you think is because they can get all the capital they want being private? Yeah, well, clearly that's a big part of it. I mean, >> Or and particularly with the LLM's, why you like Anthropic versus the others. SpaceX kind of a category of one-ish, >> Yes. right? >> Yeah. Um, it'll be interesting to see if they they manage to get any competitors or not. But yeah, I mean, I think what they're achieving is is quite extraordinary and the opportunities they have ahead of them is um uh huge. >> And you're you're not concerned with Elon's though being a part of Elon's world, which is opaque and um um capricious. Yeah, look, um I I understand that he can be quite a polarizing character. At the same time, what he has achieved, you know, particularly in electrifying the car fleet is quite extraordinary. And being frank, I'm not sure it would have happened nearly as quickly without him. How big is the opportunity for for SpaceX? I mean, they've got this market cap that's this big. Can it get that much bigger? Yeah, well, I mean, you think about things like uh everything that's going on in AI at the moment. I'm sure we'll go on to Anthropic, but uh one of the biggest bottlenecks there, as you know, is energy. Um now, is are we going to be facing a world in 2 or 3 years' time where it makes perfect sense that the incremental energy demand is provided by solar farms in space? It's perfectly possible. Um well, let let's think about that, you know. What does that mean in terms of the products that uh need to be provided? And what does that mean for the number of launches that SpaceX might be involved in? I think I think the opportunities are absolutely enormous, and that's before we talk about Starlink and all the rest of it. So, I think there are just vast opportunities for that company. Um and the cost efficiency of putting things in space is obviously the unit costs there are coming down and down and down extremely fast. Um Anthropic. Yeah, give us the use case for that that company. And again, versus the other competitors, which there are a number of. Yeah, and and look, I mean, we have to be humble enough to to realize who knows how this is all going to play out, right? Everyone is desperately trying to figure that out. Um I think what we found very compelling about Anthropic and with our many conversations with the the management team there was their focus on on safety, on approaching this in a very ethical fashion, and focusing on the enterprise market in particular with the with the really the key facets of what appealed to us. Uh and and what about the SaaS-pocalypse? Um you know, which of course is the beating that the software companies are taking. And and I want to ask you about the legacy companies, maybe in particular Microsoft, which seems to have gotten particularly hit hard. Yeah, I mean look, I think this is going to provide fantastic opportunities for um active managers. Actually, you know, the peop- people are pricing things in as if there's a certainty to how this is all going to play out that all software companies are going to be destroyed. And I think that's not going to be the case. There are going to be lots of companies that actually benefit from all the exciting tools and functionalities that AI is going to bring. So, this is exactly what selfishly we want as active managers that we can pick our way through and see which which pools of capital are absolutely going to get destroyed and which ones are going to survive. And so, have you made any bets in in the software companies? Yeah, so we so there's some that we held that we've doubled down on and some where we've accepted, you know what? Um I think AI is going to mean that they are toast. Hm. And do you care to share any of those names? Um no. Okay. I like the thinking, though. There was some thinking that went into that. Uh let me ask you a little bit about your clients. You sort of talked about yourself as a client, if you will, as a shareholder of these companies. What about managing your clients? Because you have performance that must be fairly volatile. Yes, we do. Um and and that's hugely important to us. And I think the the key thing that we have to do is you you just have to be incredibly open and transparent about how we invest. So so you're absolutely right in the trying to find the best growth businesses on the planet. Part and parcel of that is that those tend to be some of the most volatile companies. I actually look back at the 10 companies that have delivered the biggest amount of alpha for us over the last two decades, and every single one of them has had at least one drawdown of more than 30%. And some of them multiple. So you have to be very upfront with your clients as this is part and parcel of the journey to delivering those excellent returns we look to achieve. And going back to sort of the beginning of our conversation, Tim, I mean, is this a paradox that you're this old Scottish firm, but you have this kind of go-go, super optimistic outlook? Is that something that's hard to reconcile, or how do you think about that? I hope not. I mean, there's um No, look, there's a reason that we've survived for 120 years. You know, I I think only one in every 10,000 companies survives more than a century. So to be one of those 0.01% of companies that do survive, you have to be very agile. You have to adapt. You have to meet the market where it's prepared to meet you. So you know, constantly evolving with your clients has been part and parcel of of how we think about it, and it's also what we admire most in the companies that have turned out to be the best investors. So we we try to mirror those behaviors. Do you have any one company or maybe a couple that you think would be the the next Teslas over the next decade? Um you know, I know you that was such a home run for you, you're kind of a Tesla whisperer. >> Yeah. Well, look, I I'm I'm very excited about what the the opportunities ahead are, particularly given AI. I think where we're spending a lot of time is is one in the in the bottlenecks, so in the energy space. I'm very excited about what we're seeing in emerging markets. A lot of the bottlenecks are going to be unlocked by companies in emerging markets, and I think the fact that you can buy those on really cheap valuations at the moment is very exciting to us. And I really for very both sort of human reasons and investment reasons, I'm excited about what we should see in the healthcare space. Mhm. Okay, any names in any of those places in particular? Um I look So, in you know, my sort of background of the firm is in emerging markets, but uh probably won't surprise you to know we we've been long-term big holders in the likes of SK Hynix, which is high-bandwidth memory, TSMC, in Europe ASML. I think those are But also in the energy space, I think when you look at things like um copper, for example, lithium, you know, we have most of the the best reserves of these vital vital minerals if we're going to go on unlock things like renewable energy, also to um in AI, they reside in emerging markets. So, we're we're heavily invested in those companies. And final question, Tim, you are from Scotland, went to school in Ireland. We just learned you wanted to be a music teacher. You're a failed music teacher, I guess we could call you. Yes. [laughter] Did you ever anticipate sort of going into this business, and tell us about your journey to get there, maybe? Uh no is the short answer. So, so I I studied history and political science in Ireland and then France. And then I went I actually taught music in the Middle East, and uh I I moved back actually to to Scotland, where I'm where I'm from, for reasons of love, actually. My my my wife was finishing her medical degree in Edinburgh, so I moved back to be with her. And the only reason I got into this business was there were two people who played for the same cricket team as I did, who both worked for investment management companies in Edinburgh, which sadly no no exist. And I spoke to them about what they did. Sounded really interesting. I did the usual kind of interview rounds and I was very lucky to end up at Baillie Gifford. And actually he's a history graduate. It is what a privilege it is to work in this industry. You know, you are right at the forefront of what is driving countries and innovation and human ingenuity and getting to speak to people who are much cleverer and more brilliant than we are and and learning from them and it's just what a fantastic industry to be involved in. Tim Campbell, CEO of Baillie Gifford, thank you so much for joining us. Thanks, Andy. This is at Barron's. I'm Andy Serwer. We'll catch you next time.
Why You Might Miss Big Opportunities With Passive Investing, CEO Says | At Barron's
Summary
Tim Campbell, CEO of Baillie Gifford, spoke to Barron’s editor at large Andy Serwer. This interview was filmed on May 12, 2026.Transcript
Hello everyone and welcome to Eat Brains. I'm Andy Serwer and welcome to our guest Tim Campbell, CEO of Baillie Gifford. Tim, great to see you. Thanks so much for joining us. Nice to be here, Andy. So, uh Baillie Gifford is a Scottish investment management company. Um you have about $260 billion of AUM. Very old school on the one hand, but on the other hand, your investment outlook is anything but. And I'm wondering if you could sort of start us off with that. What is the thesis, the investment thesis, of Baillie Gifford? Yeah, so so you're right. Look, we've been around for 120-odd years. Um and we see our role as trying to find the greatest growth businesses on the planet. Um you know, we we spend a lot of time studying what what drives markets and you know, it's it's not a perfectly distributed bell curve of companies. It is a small handful of companies that do wonderful things. Um and so we are trying to find that very small handful of companies that are driving progress and innovating and trying to give clients exposure to those, whether they be in public markets or private markets. And I think that you've been talking recently about how the market is sort of so oriented towards indexing, benchmarks, that structurally it's sort of veering off course. Is that the case? Uh yes, so you're you're probably um alluding to a concern which I I confess I have about the direction that public markets are heading in. You know, I think there's a reason why so many businesses are choosing to stay private or indeed go from being public to private. And this really comes down to the structure of public markets today. Um if you if you think about it, now over 50% of uh public markets are dominated by passive. And then you add into that things like algorithmic trading, factor-based investing. And look, you know, passive absolutely has its place in the investment landscape. But but interestingly, what we're hearing from the companies themselves is that not really knowing their shareholders um is is a fairly unsatisfying experience. If you think if you go back to first principles, you know, what were public markets there to do? They were there to match up savings capital with ideas. And then help management teams and steward management teams to make good risk-based decisions to invest that capital and then drive progress and so on and so forth. And you think about what makes up public markets at the moment, fewer and fewer people are making those discretionary decisions around how to allocate that capital and helping and supporting management teams to make good long-term risk-based decisions. And ultimately, I think that the concern there is that that might start to actually undermine the sort of returns that one can expect from public markets. How would it do that? Well, if you So, there's there's a lot of actually very useful studies on this. The The one that I read most most recently was um by Professor Cunningham from George uh Washington University. And and he he looked at the shareholder registers of companies. And he said, he made it very very clear that those companies that enjoyed quality shareholders on the register, and by that he meant shareholders who hold a few positions in size, hold it for a long period of time, and then genuinely engage with management. Those companies that had more quality shareholders on their register outperform those with if you like a faceless shareholder register by I think it was 3.4% over decades, you know, long periods of time. So this and that's huge. That makes a massive massive difference to to what companies can expect to achieve. And if you just if you think about the companies that have done brilliantly over the last even you know, take the last couple of decades. And you think about the decisions they had to make to achieve those fantasies. So here I'm talking about things like you know, you'll probably remember when Amazon first came out with Amazon Prime. That their stock price cratered on the back of that because they were going to lose money in the near term. Now now we look back at that now, was that a good or a bad decision? It's a brilliant decision. You know, you look at when Apple launched the iPhone. Uh you know, their stock price more than halved the year after launching the iPhone. Was that a good or a bad decision? It was a it was a great decision. Uh you look at Tesla. You know, we started looking at that company in 2012. We first invested in 2013. And for about the next five or six years the market was obsessed as whether that company was going to go bust or not. I think it was one of the most shorted companies on the planet because it was making difficult long-term decisions that were going to depress near-term profitability. And I think our ability to support those companies through these difficult risk spaces is and to be clear, you know, Tesla that there was a chance that it did go bust. But having shareholders on their register that will support them through these difficult decisions I think is absolutely vital to the positive functioning of public markets. And it sounds like you're not just an executive uh running the company, you're a practitioner, an investing professional or have been for many years, correct? Well, well, to be clear, my my history of the company was I started back in 1999 on the investment graduate program after a failed career as a music teacher. Hm. Um and then >> Condolences there. Yes, I I probably just didn't have the patience at the time, which I've now been taught by having lots of children. Um but so I started on the investment floor and lastly was an investor in our emerging markets team, which I I loved and then I moved over to the the the client service side in 2007 before taking up my my new role at the company. So it's it looks so easy, Tim. I mean, you look back and it's like, well, of course Amazon was a success and of course Nvidia is a success, but as you've alluded to, it's not so easy at the time. So everyone wants to know, how do you identify them at the time before they go parabolic, if you will? Yeah, and and you're right, it's it's not easy, but there are some very conscious decisions that we make in in how we approach the investment task that I think uh give us a better chance than most of doing that. And I think there's a couple of things. First of all, you need to accept the inevitable uncertainty of investing in these things. Um second, I think you have to approach it with the mindset of what could go right here rather than all the myriad of things that might go wrong. You know, we we we have this horrible phrase in the investment industry of cautious optimism. You know, everybody's cautiously optimistic. Well, try being wildly optimistic because when you look at those businesses that have done terrifically well, it is those that go on to achieve extraordinary things. And actually, you look at our research on Nvidia or Amazon or Tesla, the biggest mistake we tended to make was not being optimistic enough about what they were going to achieve. So you have to have that mindset. >> But surely you've had some failures, right? And you Absolutely. Bet the barn on something and it was just didn't work. >> Yeah. I mean, we look, um there's there's no way you can get through this industry without making a lot of mistakes. Um and that's that's part and parcel of it. But the wonderful thing about investing in equities is that asymmetry of returns. You know, you when something go up a thousandfold and all you can lose is all of your money, which I know in in a stock I know that sounds peculiar, but but you see the point that I'm making is that um you have to give yourself the best possible chance of having those stocks that really can go parabolic. And another interesting facet of this, I think, is when to sell. Um at some point these things run out of steam. How do you make that decision? Yeah, and look, I think that is um that's absolutely critical and I think that is one of the hardest things to do for a very long-term growth investor because there's always that excuse, right? You know, I'm not I'm not wrong, I'm just not right yet. But you you have to um accept that sometimes you just need to move on. And one of the things we find most useful that is going back to the original investment case. Be honest with yourself. This is why we invested in this company. If it started to veer off that path, hold yourself to account um and make absolutely sure you learn from those mistakes. But sometimes veering is good though. I mean, it's not so easy. Like, for instance, changing your how you distribute movies for Netflix, one of those cases where everyone thought they're going down the drain, Netflix, of course. And they didn't. Yeah. No, you're absolutely right. And I think this is where we've been very lucky that we have extraordinary access to the management teams of these companies that are driving performance. >> that by dint of the your history? I It really is and I think um it's it's hard one as well. It is the reputation that you build up over decades and decades of taking your job seriously, of supporting companies through the inevitable ups and downs of when people are trying to do something which is very difficult. It is progress is never linear. The fact that we have gained a reputation for being those shareholders who will support you through the inevitable ups and downs, so long as we understand what you're trying to achieve and how you're trying to achieve it, that's why management teams want us on their shareholder register. A huge sea change over the years, of course, is the the explosive growth of private markets and it's nothing like the dot-com era where everyone was racing to go public. Now they're racing not to go public, if you will. Um and some people have suggested that by the time they go public, the movie's half over. That this is a sign of middle age and my question is just when we got commissions so far down in public markets to the benefit of shareholders, now they have to pay these fees to people like yourself um to get access to these private companies. Is that fair? I think parts of that are, being quite quite frank. Fair or unfair? No, I think parts of that is is fair. To be clear, we see our role as offering clients exposure to the best growth companies on the planet. And we want to give them exposure to the steepest part of that growth curve. So you're absolutely spot on in saying that more and more of that part of the growth curve now exists in private markets. So you have to have a presence in private markets. I should say that, you know, the history of our firm is uh, first client, our longer standing client, which we've had for almost 120 years, is an investment trust in the UK called Scottish Mortgage, and it's about $20 market cap um company, and about 35% of that investment trust is in private companies. Up from a a tremendously over the past 10 20 years, right? >> Um, and [clears throat] that uh the total expense ratio on that is 31 basis points. So, as a means to democratize access to the best growth businesses on the planet, that is the best means bar none. And in the US though, now that's for UK investors. I mean, you can get in there, but you usually have to pay more if you're here. I'm being very US-centric, apologies. But, you have uh investment [snorts] vehicles here in the US, right? >> We do. We have some of the classic, you know, GP LP structures, which I should say don't don't charge what others do. We are trying very hard to democratize access to these companies. But, I think it always goes back to where the conversation we were having before about you know, I I think there is there is a real risk um because of what we're seeing in public markets. I think it's a shame that more companies aren't in public markets, but there are reasons for that, which comes back to, you know, the unsatisfying experience that management have in public markets of that engagement with shareholders. >> Is that Oh, how much do you think is because of that, or how much do you think is because they can get all the capital they want being private? Yeah, well, clearly that's a big part of it. I mean, >> Or and particularly with the LLM's, why you like Anthropic versus the others. SpaceX kind of a category of one-ish, >> Yes. right? >> Yeah. Um, it'll be interesting to see if they they manage to get any competitors or not. But yeah, I mean, I think what they're achieving is is quite extraordinary and the opportunities they have ahead of them is um uh huge. >> And you're you're not concerned with Elon's though being a part of Elon's world, which is opaque and um um capricious. Yeah, look, um I I understand that he can be quite a polarizing character. At the same time, what he has achieved, you know, particularly in electrifying the car fleet is quite extraordinary. And being frank, I'm not sure it would have happened nearly as quickly without him. How big is the opportunity for for SpaceX? I mean, they've got this market cap that's this big. Can it get that much bigger? Yeah, well, I mean, you think about things like uh everything that's going on in AI at the moment. I'm sure we'll go on to Anthropic, but uh one of the biggest bottlenecks there, as you know, is energy. Um now, is are we going to be facing a world in 2 or 3 years' time where it makes perfect sense that the incremental energy demand is provided by solar farms in space? It's perfectly possible. Um well, let let's think about that, you know. What does that mean in terms of the products that uh need to be provided? And what does that mean for the number of launches that SpaceX might be involved in? I think I think the opportunities are absolutely enormous, and that's before we talk about Starlink and all the rest of it. So, I think there are just vast opportunities for that company. Um and the cost efficiency of putting things in space is obviously the unit costs there are coming down and down and down extremely fast. Um Anthropic. Yeah, give us the use case for that that company. And again, versus the other competitors, which there are a number of. Yeah, and and look, I mean, we have to be humble enough to to realize who knows how this is all going to play out, right? Everyone is desperately trying to figure that out. Um I think what we found very compelling about Anthropic and with our many conversations with the the management team there was their focus on on safety, on approaching this in a very ethical fashion, and focusing on the enterprise market in particular with the with the really the key facets of what appealed to us. Uh and and what about the SaaS-pocalypse? Um you know, which of course is the beating that the software companies are taking. And and I want to ask you about the legacy companies, maybe in particular Microsoft, which seems to have gotten particularly hit hard. Yeah, I mean look, I think this is going to provide fantastic opportunities for um active managers. Actually, you know, the peop- people are pricing things in as if there's a certainty to how this is all going to play out that all software companies are going to be destroyed. And I think that's not going to be the case. There are going to be lots of companies that actually benefit from all the exciting tools and functionalities that AI is going to bring. So, this is exactly what selfishly we want as active managers that we can pick our way through and see which which pools of capital are absolutely going to get destroyed and which ones are going to survive. And so, have you made any bets in in the software companies? Yeah, so we so there's some that we held that we've doubled down on and some where we've accepted, you know what? Um I think AI is going to mean that they are toast. Hm. And do you care to share any of those names? Um no. Okay. I like the thinking, though. There was some thinking that went into that. Uh let me ask you a little bit about your clients. You sort of talked about yourself as a client, if you will, as a shareholder of these companies. What about managing your clients? Because you have performance that must be fairly volatile. Yes, we do. Um and and that's hugely important to us. And I think the the key thing that we have to do is you you just have to be incredibly open and transparent about how we invest. So so you're absolutely right in the trying to find the best growth businesses on the planet. Part and parcel of that is that those tend to be some of the most volatile companies. I actually look back at the 10 companies that have delivered the biggest amount of alpha for us over the last two decades, and every single one of them has had at least one drawdown of more than 30%. And some of them multiple. So you have to be very upfront with your clients as this is part and parcel of the journey to delivering those excellent returns we look to achieve. And going back to sort of the beginning of our conversation, Tim, I mean, is this a paradox that you're this old Scottish firm, but you have this kind of go-go, super optimistic outlook? Is that something that's hard to reconcile, or how do you think about that? I hope not. I mean, there's um No, look, there's a reason that we've survived for 120 years. You know, I I think only one in every 10,000 companies survives more than a century. So to be one of those 0.01% of companies that do survive, you have to be very agile. You have to adapt. You have to meet the market where it's prepared to meet you. So you know, constantly evolving with your clients has been part and parcel of of how we think about it, and it's also what we admire most in the companies that have turned out to be the best investors. So we we try to mirror those behaviors. Do you have any one company or maybe a couple that you think would be the the next Teslas over the next decade? Um you know, I know you that was such a home run for you, you're kind of a Tesla whisperer. >> Yeah. Well, look, I I'm I'm very excited about what the the opportunities ahead are, particularly given AI. I think where we're spending a lot of time is is one in the in the bottlenecks, so in the energy space. I'm very excited about what we're seeing in emerging markets. A lot of the bottlenecks are going to be unlocked by companies in emerging markets, and I think the fact that you can buy those on really cheap valuations at the moment is very exciting to us. And I really for very both sort of human reasons and investment reasons, I'm excited about what we should see in the healthcare space. Mhm. Okay, any names in any of those places in particular? Um I look So, in you know, my sort of background of the firm is in emerging markets, but uh probably won't surprise you to know we we've been long-term big holders in the likes of SK Hynix, which is high-bandwidth memory, TSMC, in Europe ASML. I think those are But also in the energy space, I think when you look at things like um copper, for example, lithium, you know, we have most of the the best reserves of these vital vital minerals if we're going to go on unlock things like renewable energy, also to um in AI, they reside in emerging markets. So, we're we're heavily invested in those companies. And final question, Tim, you are from Scotland, went to school in Ireland. We just learned you wanted to be a music teacher. You're a failed music teacher, I guess we could call you. Yes. [laughter] Did you ever anticipate sort of going into this business, and tell us about your journey to get there, maybe? Uh no is the short answer. So, so I I studied history and political science in Ireland and then France. And then I went I actually taught music in the Middle East, and uh I I moved back actually to to Scotland, where I'm where I'm from, for reasons of love, actually. My my my wife was finishing her medical degree in Edinburgh, so I moved back to be with her. And the only reason I got into this business was there were two people who played for the same cricket team as I did, who both worked for investment management companies in Edinburgh, which sadly no no exist. And I spoke to them about what they did. Sounded really interesting. I did the usual kind of interview rounds and I was very lucky to end up at Baillie Gifford. And actually he's a history graduate. It is what a privilege it is to work in this industry. You know, you are right at the forefront of what is driving countries and innovation and human ingenuity and getting to speak to people who are much cleverer and more brilliant than we are and and learning from them and it's just what a fantastic industry to be involved in. Tim Campbell, CEO of Baillie Gifford, thank you so much for joining us. Thanks, Andy. This is at Barron's. I'm Andy Serwer. We'll catch you next time.