Compared with the hustle and bustle of New York and Hong Kong, Edinburgh does not look like a commercial city.

The city in Scotland, the northernmost part of England, is like a knight who has guarded the land beneath his feet for thousands of years. The streets are flanked by classical cashmere scarf shops and cafes, bagpipes are played under the castle, and the thick sense of history even gives people the illusion of crossing into another era.

This is the place where JK Rowling wrote Harry Potter and where Jay Chou filmed MV. Everything is full of romantic artistic atmosphere.

Over the past 10 years, there have been groups of investment and research personnel from domestic public fund companies to communicate here every year.

There is no lack of long-term capital management agencies in this city, especially the century-old ultra-long-term investment giant that has gained fame in China by investing in Tesla, Inc.: Baillie Gifford.

Compared with the well-known Berkshire, BG is as quiet and quiet as the city of Edinburgh. But in fact, in the long run, BG performed better than Berkshire.

Since the beginning of 2000, BG's flagship fund, the Scottish Mortgage Trust (SMT), has returned nearly 1500%, while Berkshire has returned about 500%.

The value investment community is roughly divided into two groups: Graham's emphasis on mispriced companies and long-term holdings, and Fisher's emphasis on mining high-growth companies and long-term holdings.

Early Buffett belongs to the former, while BG belongs to the latter.

Later, under the influence of Munger, Buffett gradually incorporated the concept of growth system into his investment strategy. At this level, Berkshire belongs to the mixed school, while BG belongs to the pure growth school, good at digging for long-term big opportunities.

Throughout the 100-year history of BG, from betting on the United States after World War I and Japan after World War II, to investing in Amazon.Com Inc after the Internet bubble, BG has always been very accurate.

Few people started investing before World War II and are still alive today, but most investors who bought and held early have achieved considerable income and capital growth.

In the past 15 years alone, more than half of the more than 30 trust funds that have existed since the beginning of World War II and are still operating today have returned 300 per cent or more, while the five best-performing trust funds have returned more than 500 per cent.

Financial markets have experienced too much wind and rain since the beginning of the last century. Major events such as the two world wars, the Wall Street crash, the Korean War, the oil crisis, Black Monday in 1987, the Internet crash and the global financial crisis are all disrupting financial markets.

However, many cycles end in corrections, and market adjustments often provide opportunities for investors to buy good companies at low prices.

On long-term charts, declines are often a flash in the pan.

Everyone chanted the slogan of long-term investment.

But the biggest question is whether investors can survive every disaster and have the patience to persevere.

And BG has been running for 114 years. In the past hundred years, what kind of wind and rain has BG experienced? And how to cultivate the current investment concept step by step?

1908-1947: the era of raising funds

He made early investments in the rubber industry and American railways and became famous in World War II.

Baillie & Gifford WS was founded in 1907 by Augustus Augustus Baillie and Carlyle Gifford.

These two men, one is an officer, the other is a lawyer, actually do not have much investment experience at the beginning.

Lieutenant Colonel Augustus Bailey grew up in Scotland. Despite his rank of officer, he seems to want to pursue a career rather than engage in the military

Augustus was first appointed to the Royal Horse Artillery in 1880, but he resigned in 1886. During the second Boolean War at the end of the 19th century, Bailey rejoined the army and took part in the war, which was also the famous battle of Augustus.

After the war, Bailey was promoted to major in 1903, and to lieutenant colonel in 1908, the second year after the establishment of BG, but he resigned again in 1910 to concentrate on his career.

Another founder, Carlyle Gifford, is a lawyer born in Cocubrie in southern Scotland and educated at George Watson College and the University of Edinburgh, specializing in land law and securities trading.

At first, BG was a law firm, but there were so many opportunities in the financial environment that BG switched to investment in 1908.

When BG was founded a century ago, its founders showed an extraordinary vision for investment:

In 1909, BG founded the Straits Mortgage Trust (Straits Mortgage and Trust) to invest in British Malayan rubber plantations that provide rubber for car tires. Investing in the rubber business was also one of BG's first deals, at a time when Ford's Model T was popular in the United States, and BG thought the groundbreaking car could "completely change the world."

In 1913, the Straits Mortgage Trust was renamed to the later famousScottish mortgage trust（The Scottish Mortgage and Trust, that is SMT)BG then introduced several other investment trusts.

Fortunately, BG's customers and employees were "unscathed" in World War I.

After the first world war, BG seized the opportunity again, believing that the US, which made a fortune in the first world war, was a compelling emerging market and invested heavily in railway companies such as Union Pacific Corp Railway, which accounted for 20 per cent of its assets in the US at the time.

In retrospect, investing in the United States was the right decision, and it also confirmed BG's decision to invest in growth.

Before World War I, the United States was still a debtor, unable to compete with European countries such as Britain, France and Germany in terms of status and economy. But after years of war, the United States became a lender.

As European countries made reserves for war, American exports to Europe continued to increase, resulting in the economic prosperity and rise of the United States.

The Roaring Twenties provides BG with many opportunities to expand its investment business.

During this period, American industry grew at an average annual rate of 4%, and gross national income increased from $65 billion in 1919 to $82.81 billion in 1929.

Moreover, the automobile industry chain and railway infrastructure of BG layout are in the golden age of development.

By 1927, with Baillie Gifford & Co. Baillie & Gifford WS formally transformed from a law firm engaged in institutional investment business into a partnership for managing investment trusts.

More miraculously, the Wall Street crash of 1929 did not bring down BG, but allowed them to seize the opportunity to continue to expand.

Take General Investor and Trustees Limited (GIT), the predecessor of its China growth Trust, whose investment managers foresaw the coming stock market crash before the crash and converted more than half of their portfolios into cash and UK government securities.

In addition, BG took over some of the industries that collapsed in the Wall Street crash.

In 1931, BG took over.Monks Investment TrustAnd two other related companies.

Monks is one of a series of investment trusts launched by the commercial bank JC im Thurn & Sons in the late 1920s and the last trust launched by the bank before its collapse due to the collapse of Wall Street.Monks is still in continuous transportation up to now.As of 2.021In the third quarter of 2008, the scale of the investment trust has reached3.4 billion pounds。

In the hungry thirties, BG continued to grow steadily until the outbreak of World War II.

War is often devastating in the eyes of many people, but during World War II, BG ushered in its best moment:

In 1940, one of the founders, Carlisle Gifford, was sent to New York for British government affairs. At that time, the governor of the Bank of England chose BG to peddle British national assets on the New York Stock Exchange to build a military arsenal and provide war funding for Britain.

In other words, BG was not only rich at that time, but also equivalent to the "endorsement" of the British government, which also made BG famous in the United States.

1947-1978 postwar era: the negative impact of the British economic recession, the loss of big customers almost "died"

The Wall Street crash and the two world wars did not destroy BG, but it almost disappeared in the postwar recession.

After World War II, BG first continued its glory for a period of time. The devaluation of the pound has led to a boom in the British financial industry, and BG and its main client, investment trusts, have also made a lot of money.

Augustus Bailey, one of the first founders, died in 1939, and Carlisle Gifford retired in 1965. After the war, BG has been in charge of the second generation of managers.

Their brief post-war glory seemed to close their eyes temporarily, feeling that they could live a good life by focusing on the local market and being a small and beautiful fund, instead of their curiosity and ambition to look out.

The crisis soon appeared. After the end of World War II, Britain followed the planning system of World War II, the bureaucracy was too large, resources were concentrated in the central government, trade unions were powerful, the economy became inactive and declined rapidly.

At the same time, British domestic politics is also extremely unstable, before Margaret Thatcher, the prime minister frequently stepped down, the policy is also lack of continuity.

In 1965, James Callaghan, the Labour Chancellor of the Exchequer, introduced a new financial law and complex new tax regulations, which changed everything about investment trusts. For example, every fund transaction generates capital gains tax.

Although many changes were cancelled by later legislation, the direct impact at that time was very great, the onerous additional management brought a lot of burden to the trust, and the funds of BG began to decline.

In addition, the global market was not peaceful at that time. Inflation is serious and interest rates have reached very high levels. The war in the Middle East in 1973 triggered the first oil crisis, when oil prices soared from $2 per barrel to $11.50 per barrel.

There are more and more problems in the market, but investors are unprepared.

At the time, BG senior partners thought that expanding new business would be a distraction and wanted to focus on the immediate customer base, so they refused to seek any opportunity to continue their trust business.

But it was a strategic mistake to make companies too dependent on trusts, and soon the glory of the trust industry was over.

Then, in 1978, BG had a near-death experience-it lost its second-largest customer.

In the spring of 1978, the state-owned British Railway Pension Fund successfully acquired the equity of Edinburgh & Dundee Investment Trust, which is BG's second largest client.

Richard Burns, a former senior partner, recalls that the client brought in "more money than the company's profits" and that after he left, BG was "almost worthless as a business".

Despite the pressure, "no partner left at this bad moment," recalls Douglas Mcdougall, a former senior partner.

BGHe had considered merging and selling the company, but its partners insisted on staying independent. In the end, the company never made any merger or acquisition.And continued to hire during the financial downturns of 1987, 2000 and 2008, when rival companies often chose to lay off staff.

"the partner culture isThe most unique thing about Baillie Gifford-- do you think that if you own this company, youWill go instinctively.Do the right thing，」 Douglas said.

BG is currently wholly owned by more than 40 partners, all of whom have worked in the company for more than 20 years on average and have unlimited personal responsibilities. This structure is a good tool to maintain the long-term operation of the company, senior employees will be encouraged by equity, so as to maintain the mentality of long-term work.

1979-1999: during the great bull market, the key to growth was the pension fund business.

In 1979, Margaret Thatcher, a British Conservative, came to power and began to implement comprehensive economic and political reforms: the abolition of foreign exchange controls and capital gains tax, and a sharp reduction in personal tax. This series of measures have played a great role in promoting the development of British enterprises and the asset management industry. in this regard, the UK has started a bull market that has lasted for about 20 years.

Richard Burns, a former senior partner at BG, recalls that in the early 1980s, BG was still vulnerable after a downturn in the investment industry in the 1970s.

However, with the advent of the bull market of the 1980s, the deregulation of foreign currency controls and the rapid growth of Japan as the fastest-growing stock market in the world (BG began to dominate Japan in the 1960s), exciting times have come, and BG is also on the road to new business opportunities.

In 1983, two well-known fund managers and later partners, Charles Plowden and James Anderson, joined BG. They managed two of BG's oldest funds, Monks and SMT, respectively.

During this periodLead to BGThe key to growth is the transfer of business to pension funds.

Fortunately, BG's consistent investment approach has attracted a large number of pension fund clients. The company won its first pension through competitive advantage in 1984 and has played an important role in pension investment in the UK since 1987.

Charles Plowden saidThe goal of BG has never been asset growth, but continuous improvement in investment capacity and customer service.，The former follows the latter.

In just a decade or so, BG's assets under management have grown from £3.5 billion to £16.2 billion, which is inextricably linked to their loyal customers.

With Iraq's invasion of Kuwait, the recession of 1991-92 and Britain's hasty entry and exit from the European Exchange rate Mechanism (ERM), the 1990s got off to a bad start for the markets. (the UK joined the ERM in 1990 and left in 1992)

Soon, however, driven by the Internet and technology boom, the market moved forward rapidly.

In 1993, when Clinton was sworn in as the 42nd president of the United States, BG launched the British small companies Fund, which aims to give clients access to the best young companies in the UK.

In hindsight, the breakthrough innovation at the end of the 20th century brought many opportunities for long-term growth investors.

2000-2021: in the era of global investment, the bottom-up investment concept takes shape and pays attention to overseas markets.

Entering the 21st century, the new mission of BG is long-term investment and globalization, and less concern for short-term stock indexes.

「Looking for real high-quality companies, highly heavy positions and long-term holdings. "The way and concept of investment also began to take shape from this stage. The company postponed its investment from two to three years to five to ten years, putting more emphasis on a company's prospects and eliminating short-term noise from current profits or valuations.

The bursting of the Internet stock bubble in 2000 also brought some setbacks to BG, but unlike the closed Tiger Fund, BG did not suffer a devastating blow.

One reason is that long-established portfolios like Monks do not invest much in the Internet, and its managers prefer more stable blue-chip companies.

The second reason is that BG staunchly supports Jeff Bezos's vision as most investors flee companies such as Amazon.Com Inc. This also confirms BG's principle of "avoiding consensus" in its research.

Amazon.Com Inc's extraordinary resilience and success have also promoted BG's "think first, then criticize" approach. At the same time, BG is increasingly confirming their bottom-up investment philosophy:

Around 2004, James Anderson sparked a quiet revolution in BG investment: he gave up his job as chief investment officer and left the top-down investment policy committee.

"We are beginning to notice that big companies are getting better and stronger, and as they grow, the returns are getting higher and higher," James Anderson said.

In addition to bottom-up investment, BG also believesIf you want to keep growing, you must focus on overseas emerging markets.Among them, China is the main driver of global growth, followed by India and Brazil.

Thanks to the global focus on overseas markets, strong demand for equity management, and BG's growing reputation in emerging market investment, the company's overseas business is booming.

By the end of 2007, BG's overseas asset management accounted for 40 per cent of the total. By its 100th anniversary in 2008, BG had offices in New York and London in addition to its headquarters in Edinburgh, with assets under management of £50 billion.

Its clients include five of the seven largest US pension funds, attract large amounts of business from Japan and Australia, and continue to expand into the far East and the rest of the Middle East.

Led by such a mission, BG successfully bet on some big technology companies--

In 2012, BG successfully captured emerging trends such as cloud computing, as well as Asian technology giants such as BABA and Tencent. BG bought Tesla, Inc. in 2013 and has made a profit of nearly 9000% so far.

For the past two decades, BG has been looking for companies to invest in R & D and technology, especially projects that may not be immediately profitable but can boost the economy in a decade's time. Although quantitative investment was all the rage, BG traded less. Their turnover rate is less than 20%.

In addition to the investment, BG also uses part of its research budget to sponsor the academic field. For example, it sponsors the Baillie Gifford Award for non-fiction books.

Marathon runners who are not afraid to make mistakes, where will they go in the future?

BG has also stepped on a lot of holes, such as Petroleo Brasileiro SA Petrobras OGX, Airbnb and suitcase maker Away.

However, they are not afraid of stepping on thunder, and they also have the courage to be fearless: as long as they bet on one or two big opportunities like Amazon.Com Inc, Tesla, Inc., and Tencent, the return will far exceed the loss.

"if you can hit one or two outstanding companies that really drive the long-term market, then they will pay for the inevitable mistakes," says Tom Slater, one of SMT's current managers. "

James Anderson has said that he likes marathon runners very much because "they have managed to create a space for themselves where they can do what they want instead of following the rules." "

BG is also like a marathon runner.

When making investments, they will create a space for themselves for up to 10 years, in-depth research, regardless of macro, interest rate or political issues.

However, James Anderson, BG's own "marathon runner", is leaving BG next year. Why did the asset management expert, who joined BG in 1983 and became a partner four years later, increased SMT's investor returns by nearly 16 times?

In an interview with the Times in March 2021, Anderson revealed that with the growing size of corporate management, BG's culture has become more "introverted and bureaucratic."

"We now have more compliance officers than the total number of employees when I first started. The company now has 1500 people, and no more than 100 people are actually investing. "

In the process of increasing expansion, it is becoming more and more difficult to retain the original culture of the company. Some investors also believe that as the scale of BG becomes larger, it will gradually lose the partnership spirit and academic management culture that once benefited from it, and eventually become an "ordinary" large asset management company.

Can the century-old tree of BG keep blooming, as the slogan at their headquarters in Edinburgh says?"Real investors think in terms of ten years, not quarters."Well, let's wait and see.