Japanese Asset Manager Bets Big on Scottish Mortgage as Private-Market Risks Loom

A major institutional vote of confidence has injected fresh momentum into Scottish Mortgage Investment Trust, even as the fund navigates heightened exposure to unlisted tech giants and a cooling private-equity environment. Mitsubishi UFJ Asset Management disclosed early June that it has crossed the 3% ownership threshold, now controlling roughly 33.6 million shares — a position market participants read as a bullish endorsement of the trust’s strategy.

The Japanese money manager’s timing is striking. Scottish Mortgage’s portfolio is more concentrated in private companies than ever, with the SpaceX stake alone swelling to 21.0% of total assets after a revaluation, up from 17.9% at the end of April. That positions the Elon Musk-led rocket venture as the fund’s single largest holding, while total unlisted exposure now exceeds 40% — well above the customary 30% cap that shareholders will vote on at the annual general meeting in Edinburgh on 2 July.

The AGM is shaping up as a pivotal moment. Investors will decide whether to scrap the 30% ceiling on private-market investments altogether. The board already secured a temporary waiver in April allowing an extra £250 million in unlisted commitments beyond the limit. A positive vote would give managers the latitude to deepen bets in pre-IPO names like SpaceX and Anthropic, the latter of which Scottish Mortgage holds at a 2.6% stake. Both companies have filed confidential IPO documents — SpaceX at a fund-internal valuation of $1.25 trillion and Anthropic at $965 billion following its latest funding round.

Should investors sell immediately? Or is it worth buying Scottish Mortgage Investment?

Yet the broader private-equity landscape is sending warning signals. Bain & Company’s half-year report on the sector, released on Monday, flagged three headwinds that have stalled the expected recovery: an AI-driven valuation crunch in software, redemption pressure in private credit markets, and the Iran conflict’s impact on oil prices. Deal value in technology collapsed 70% from the fourth quarter of 2025 to the first quarter of 2026, while software valuations in PE portfolios slid roughly 8% by the end of March. Bid-ask spreads have widened and investment committees are pulling back.

Scottish Mortgage is not immune to these crosswinds. The trust’s shares trade at around €17.00, having shed nearly 7% over the past week. That leaves them roughly 13% below the 52-week high of €19.50 touched on 25 May. Still, the year-to-date gain remains above 22%, a reflection of the fund’s transformation from trading at a roughly 20% discount to net asset value in 2023 to now issuing new shares at a premium. Management raised about £95 million through such premium-placed equity recently — a notable pivot from the more than £3 billion in buybacks executed over previous years.

Income investors have a near-term date to watch. The ex-dividend day falls on 11 June, with a payout of 2.97 pence per share. The full-year distribution amounts to 4.57 pence, a 4.3% increase marking the 43rd consecutive year of dividend growth.

Over the longer horizon, the trust’s track record remains formidable. Net asset value rose 27.4% in the fiscal year through March 2026, delivering a total shareholder return of 26.8%. Over a decade, NAV has climbed 435%, nearly doubling the FTSE All-World’s 234% gain. Bain notes that SpaceX, OpenAI and Anthropic are all preparing for multibillion-dollar initial public offerings — a development that, if realised, could serve as a powerful catalyst for Scottish Mortgage and ease some of the valuation concerns currently weighing on its private-market portfolio.

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