The value of joint ventures
Despite Baillie Gifford?s lack of corporate activity, the firm has set up several joint ventures. Amin Rajan, CEO at research firm Create, says: "JVs fit well with the structure and it?s a sign of growing confidence."
In 1989 Baillie Gifford formed a joint venture with Toyo Trust, which has since merged with Sanwa and Toka banks to form UFJ. "The JV with UFJ brings together Japanese pension fund clients and transforms them into one big client," says Ross Lidstone, who heads Baillie Gifford?s business for Europe, North America and Japan. "We currently have £2.5 billion under advisement with UFJ, which for our size is significant," he adds. UFJ has contact with the clients and Baillie Gifford provides investment advice.
The Japanese joint venture fits well with Baillie Gifford?s strategy where the average client size is around $150 million. "If a client is small or difficult to service we do it through a joint venture or subadvisory service," says Baillie Gifford CEO Alex Callander. The firm also has a joint venture with US mutual life insurance company Guardian Life. "Guardian Life sells variable annuity and mutual funds in the US and we manage some of the overseas money," says Callander.