Short Briefings on Long Term Thinking - Baillie Gifford

Tokenisation represents an “operating system upgrade” for the investment industry, says Theo Golden, Baillie Gifford’s new head of digital assets. In this episode, they explain what it involves and how it should deliver a better experience, both by reducing the number of middlemen between you and your investments and making your holdings more “useful”.
 
Background:

In this conversation, Theo Golden tells Short Briefings… host Leo Kelion about how tokenisation can reduce costs and complexity – and pave the way for providing clients with new services that better fit their needs.
 
Tokenisation means taking an asset – such as a fund – and turning it into a line of code. This lives on a blockchain: a shared digital record that no single party owns or controls. The investment itself doesn't change, but what does are the ways that ownership is recorded and transferred. Instead of a chain of intermediaries, each keeping their own set of books, everyone can work from one shared record. As Golden puts it, it's “the same but better” – the same investments, on faster, lower-cost, more flexible rails built for the internet age.
 
It also paves the way to new capabilities. Among those Golden discusses are making it much easier for clients to use the funds they invest in as collateral for loans, and the development of “agentic wealth management” – AI bots that autonomously plan and, potentially, update an individual client’s portfolio based on their risk appetite and changing circumstances.
 
Baillie Gifford’s first steps with tokenisation involve fixed income, but in time the ambition is to “build across our investment universe,” Golden says. “So be ready for Baillie Gifford on chain.”
 

 
Resources
Baillie Gifford digital assets hub
Dr Ian Hunt: Replicating Legacy is Squandering the Promise of Tokenisation: We Are Building a Faster Horse
Short Briefings on Long Term Thinking podcast archive
 
Timecodes:
00:00  Introduction
01:40   “A world with less friction”
02:15   The lesson from losing it all
04:50  From Bloomberg to bonds
06:35  Defining tokenisation and the blockchain
08:20  Same assets, better system
09:35  One golden source of truth
12:35   Making assets more useful
16:10   Turning assets into “Lego bricks”
19:20   Stablecoins, regulation and new decision-makers
24:00  Managing crypto risks
26:25  The ‘same but better’ rule
28:00  Starting with fixed income
29:20  Meeting clients where they are
30:27  Book pick
 

Glossary of terms (in order of mention):
 
Trading volumes: The amount of buying and selling taking place in a market over a period of time.
 
Blockchain-based tokenisation: The use of blockchain technology to create digital tokens that represent ownership of assets.
 
Self-sovereign: Controlled directly by the owner, rather than depending entirely on a bank, platform or intermediary.
 
Custody: The safekeeping of assets. Self-custody means holding and controlling the asset directly yourself.
 
Counterparties: The other parties involved in a financial transaction or agreement.
 
Multi Asset: An investment approach that can invest across several asset classes, such as shares, bonds, currencies and infrastructure.
 
Catastrophe bonds: Bonds that transfer insurance-related risks, such as natural-disaster losses, from insurers to investors.
 
FX rates: Foreign exchange rates.
 
Smart contract: Computer code that automatically carries out agreed rules when certain conditions are met.
 
Token: A digital representation of an asset or ownership right on a blockchain.
 
Walled garden: A closed system where users can only operate within the rules and limits of one provider or platform.
 
Fixed income fund: A fund that invests mainly in bonds or other debt instruments that typically pay interest.
 
Growth equity fund: A fund that invests in companies expected to grow faster than the wider market.
 
Vehicle for transfer: The system or method used to move ownership or value from one party to another.
 
Rails: The underlying infrastructure that allows transactions or transfers to take place.
 
Reconciliation: The process of checking that different records match each other.
 
Shareholder registry: The official list of people or organisations that own shares or fund units.
 
Transfer agency register: A fund-administration record that tracks investor ownership and transactions.
 
Wallet: A digital tool used to hold and manage blockchain-based assets.
 
Finality: The point at which a transaction is considered complete and cannot easily be reversed.
 
Unitisation: The process of dividing a fund into units so investors can buy and sell a share of the fund.
 
Inert: Hard to move, transfer or use in other financial activities.
 
UK gilt: A UK government bond.
 
Margin call: A demand for more cash or collateral when the value of an investment or position has fallen.
 
Interoperability: The ability of different systems, assets or pieces of software to work together.
 
Composability: The ability to combine digital assets or software components, like building blocks, to create new services.
 
COBOL: Common Business-Oriented Language – an older computer programming language still used in some legacy financial systems.
 
AI agents: Software that can act semi-independently to carry out tasks on behalf of a user.
 
On-chain books and records: Official ownership and transaction records kept on a blockchain.
 
Stablecoin: A digital asset designed to track the value of a traditional currency, such as the US dollar or pound.
 
Fiat currency: Government-issued money, such as pounds, dollars or yen, that is not backed by a physical commodity such as gold.
 
USDC: A stablecoin issued by Circle that is designed to track the value of the US dollar.
 
FCA: The Financial Conduct Authority, the UK regulator for financial services firms and markets.
 
Burn a token: Permanently cancel or destroy a digital token so it can no longer be used.
 
Remit a token: Re-issue a token to a new wallet.
 
Neobank: A digital-first bank, usually operating mainly through apps or online services.

The US public’s tastes and habits are fragmenting, leading to new consumer behaviours. The shift from a handful of TV networks to an endless supply of streamed shows and social media clips is just one of many causes. Investment manager Dave Bujnowski discusses the characteristics that determine which growth companies should thrive in the resulting ‘high entropy’ environment.

Dave Bujnowski is an investment manager in our US Equity Growth Team and co-manager of the Baillie Gifford U.S. Equity Growth Fund and our American Fund.
 
In this conversation, he tells Short Briefings… host Leo Kelion about his work with anthropologist Dr Grant McCracken, studying the causes and effects of the fragmentation of American culture. They believe that US culture is a system that has entered a ‘high entropy state’ – meaning that tastes and habits no longer change in an orderly manner. The result is “tremendous instability” and a sense of “continual pandemonium”.
 
This shift, they argue, has implications for growth companies and helps explain why some are struggling to maintain mass-market appeal. But the disorder also plays to others' advantage, and they have sought to identify which will thrive and why.
 
Portfolio companies discussed include:
·      Cloudflare – the service that protects websites from attack and optimises their performance
·      DraftKings – the sports gambling platform that lets Americans bet on sporting events
·      Samsara – the Internet of Things specialist helping companies track and make sense of data
·      SharkNinja – the home appliance company behind the CREAMi ice-cream maker
·      Shopify – the ecommerce platform serving merchants

·       
Resources:
Dr Grant McCracken
Short Briefings on Long Term Thinking podcast archive
The Long View collection
Thinking in Systems
When systems fragment: entropy, cultural change and the next great US companies
 
 
Companies mentioned include:
·      Alphabet (Google)
·      Amazon
·      Cloudflare
·      DraftKings
·      Meta
·      Netflix
·      Samsara
·      SharkNinja
·      Shopify
·      SpaceX
 

Timecodes:
00:00  Introduction
02:05  System-level thinking
03:20  How change happens
06:10   Entropy and fragmentation
08:15   A conversation with Cloudflare’s CEO
10:20   Ants and anthropology
13:25   Grant McCracken on North Sea culture
15:15   The causes of splintering culture
17:05   New consumer behaviours
19:15   Challenging times for lululemon
21:00   Shopify and agility
23:10   Agentic commerce
25:40  SharkNinja and new niches
28:30  DraftKings and cultural anchors
30:40  Samsara’s entropy antidote
32:10   Finance and space: systems to watch
33:50  Book choice
 
 
Glossary of terms (in order of mention):
 
Entropy: In this podcast, a metaphor for systems becoming more fragmented, varied and harder to predict.

Cash flows: The money moving into and out of a business.

Market cap: The total stock-market value of a company: share price multiplied by number of shares.

S&P 500: A major US stock-market index of large companies.

Second law of thermodynamics: A physics principle often simplified as the tendency of energy in a closed system to spread out over time.
 
Mainframe: A large, central computer used by organisations to process major computing tasks.
 
Big iron: Informal technology term for large, powerful central computers.
 
MMA: Mixed martial arts, a full-contact combat sport.
 
Delulu: Internet slang for optimistic or unrealistic self-belief. Short for ‘delusional’.
 
Traffic aggregation: Bringing together large numbers of users or customers in one place, often online.
 
Total addressable market (TAM): The total potential market size for a product or service if it reached all possible customers.
 
Prediction markets: Markets where people trade contracts based on the likelihood of future events.
 
Internet of Things: Everyday equipment connected to the internet so it can collect and share data.

Bottlenecks often act as constraints on growth, but companies that create funnels through them can gain pricing power and capture long-term value. Investment manager Mike Taylor reveals some of the companies he thinks achieve this best and how he spots such pinch points before they fully form.

Mike Taylor is a Baillie Gifford partner, an investment manager in its Global Alpha Strategy and a co-manager of The Monks Investment Trust.
 
In this conversation, he tells Short Briefings… host Leo Kelion about how bottlenecks can confer an advantage on companies that sit astride them. That includes those that serve a mismatch between supply and demand created by others, and those whose products and services create a new pinch point, which they control. In addition, he explains why mixing a cocktail of bottlenecks in his portfolios can deliver smoother growth for their shareholders.
 
Portfolio companies discussed include:
Medpace – the drug and biologic contract research organisation
 Games Workshop – the maker of the Warhammer tabletop battle games
Tidewater – the provider of offshore vessels to the oil and gas sector
Freeport-McMoRan – the mining company that produces gold and copper, among other minerals
DISCO – the precision tools company, widely used in the semiconductor industry
Samsung Electronics – the electronics conglomerate
SK Hynix – the memory chip specialist
 
 
Resources:
Don’t Burn Your Boats: the case for selective AI investing
Global Alpha Investment Strategy
SPQR: A History of Ancient Rome
Short Briefings on Long Term Thinking podcast archive
The Monks Investment Trust
Valuing scarcity in the age of AI
 
 
Companies mentioned include:
Amazon
DISCO
Games Workshop
Tidewater
Freeport-McMoRan
Medpace
NVIDIA
Samsung Electronics
Sandoz
SK Hynix

Timecodes:
00:00  Introduction
02:10  Investing inside and outside Baillie Gifford
03:55  Defining bottlenecks
04:45  How Medpace helps biotechs meet regulatory requirements
07:35  Founder-leader, August Troendle
09:30  Stress testing the bottleneck
12:00  Games Workshop creates its own pinch point
14:50  Shepherding Warhammer over the long term
17:45  Mixing bottlenecks to reduce volatility
20:05  Tidewater and the coming offshore vessel shortage
23:30  Freeport-McMoRan feeds the US’s copper needs
26:20  AI bottlenecks: silicon wafers and high-bandwidth memory
30:00  Enduring versus fleeting bottlenecks
31:25  Book choice

Glossary of terms (in order of mention):
 
Adenovirus: A common type of virus that can cause mild illnesses such as colds, sore throats or conjunctivitis, but can also be modified for medical uses such as delivering genes into cells.
 
Gene therapy: A treatment that works by adding, altering or replacing genes inside a patient’s cells to treat disease.

Clinical trials: Research studies in people that test whether a medicine, treatment or medical approach is safe and effective.
 
FDA: The US Food and Drug Administration, the regulator responsible for approving medicines, vaccines and medical devices in the United States.
 
Contract research organisation: An organisation that helps biotechnology and pharmaceutical companies run clinical trials.

Private partnership: A business owned by its partners rather than by public shareholders.
 
Supernormal profits: Profits above what would normally be expected in a competitive market.

Supply side: The part of an industry concerned with how much of a product or service companies can provide.

Demand side: The part of an industry concerned with how much customers want or need a product or service.
 
Rate limiter: The factor that determines the maximum speed at which something can grow, expand or be produced.

Novel therapies: New types of medical treatments, often based on recent scientific advances.

Intellectual property (IP): Legal rights over creations such as brands, stories, characters, designs, patents or software.

Free cash flow: The cash a company produces after paying the costs needed to run and maintain the business.

Energy transition: The shift from fossil-fuel-based energy systems toward lower-carbon sources such as renewables, batteries and electrification.

Compute: The processing power needed to train or run AI models or other computing tasks.
 
High-bandwidth memory (HBM): A type of advanced memory chip that can move very large amounts of data quickly to processors, making it especially useful for AI systems.
 
Steam turbine: A device that uses steam to spin a wheel or rotor, converting heat energy into mechanical motion.

A series of “extraordinary” events has made the environment more challenging for growth stocks. But “this level of trepidation can’t go on forever”, says Baillie Gifford partner Stuart Dunbar in this latest episode, suggesting that patient investors will benefit when stability returns and the markets value exceptional companies at a premium again.
 
Stuart Dunbar is a director in Baillie Gifford’s Clients Department and is responsible for helping shape and communicate the firm’s investment philosophy.

In this conversation, he considers how a succession of disruptive events – the most recent being the current war in the Middle East – has rattled markets and led investors to focus on companies’ short-term profits rather than their long-term potential.

However, this period of flux will not last forever, he argues. And when we re-enter a period of stability, patience should be rewarded as markets recognise exceptional companies’ future earnings potential and price them accordingly.
 
In the meantime, Baillie Gifford’s investment teams remain focused on finding and supporting businesses that will prosper from change and supporting their management to take the long view. And as Dunbar reveals, as the sources of growth broaden out, we are backing some companies that come as a surprise.
 
 
Portfolio companies discussed include:
Astera Labs – the semiconductor chip designer, whose products tackle data bottlenecks in AI datacentres
IREN – the datacentre operator whose clients include Microsoft
Medpace – a contract research organisation that biotech and pharmaceutical companies hire to run their clinical trials
Nu Holdings – owner of the Latin American fintech Nubank
Spotify – the audio streaming platform that lets people listen to music, podcasts and audiobooks
WillScot – North America’s largest provider of temporary space rentals, leasing out modular offices, portable storage containers and classroom units

 
Resources:
Actual investors hub
Actual investing revisited
Baillie Gifford podcasts
Private growth investing
The Compound and Friends podcast
The Success Equation

 
Companies mentioned include:
AJ Bell
Amazon
Anthropic
Astera Labs
ByteDance
IREN
Medpace
Microsoft
Nu Holdings
NVIDIA
Spotify
WillScot


Timecodes:
00:00  Introduction
02:00  Active v passive
03:35  “Know what we own”
06:15  Building relationships with company leaders
07:55  Causes and effects of uncertainty
11:05  Beyond the Magnificent 7
12:45  A period of relative stability
17:50  Compressed valuations
19:25  Nubank and Medpace’s promise
23:10  Meetings with clients
25:40  Broader sources of growth
28:15  Private equity growth
31:25  Better-informed stock picking
33:25  Staying independent and standalone
35:45  “Wait until the market comes to its senses”
37:10  Book choice

Glossary of terms (in order of mention):
 
Latent heat: energy absorbed or released during a change of state, like ice melting, without a change in temperature.
Active investing: trying to beat the market by choosing investments based on research and judgement.
Passive funds: investment funds that track a market index rather than picking stocks actively.
Quantitative approaches: investment methods that use data, models and statistics to make decisions.
Market capitalisation weights: an index method that gives bigger companies a larger influence based on their total market value.
Alignment of incentives: making sure different parties are rewarded in ways that encourage the same goals.
Drawdowns: significant falls in the value of an investment from a previous peak.
R&D: research and development – spending on innovation and new products or technologies.
Backdate options: setting share-option dates retrospectively to make them more valuable, often controversially.
Shareholder registers: the official records of who owns a company’s shares.
Benchmark: a standard, often an index, used to compare investment performance.
Magnificent 7 / Mag 7: the seven giant US tech stocks that have dominated market performance in recent years.
GPU: graphics processing unit – a specialised chip often used for AI computing because it handles parallel tasks well.
Sub-market multiple: a valuation lower than the market average.
Strategic asset allocation: deciding how much to invest in broad asset classes like shares, bonds or private markets.
Benchmark-aware: closely focused on performance relative to a benchmark index.
Venture capital: investment in early-stage, high-growth private companies.
Private equity buyout funds: funds that buy controlling stakes in companies, often using debt.
Private equity growth: investing in more mature private companies that are expanding but not yet public.
Roadshow: presentations by company leaders to investors ahead of an IPO or fundraising.
Alternative asset classes: investments outside traditional shares and bonds, such as private equity or infrastructure.
Path dependency: the idea that outcomes are shaped by the sequence of earlier decisions and events.

From new cancer drugs to batteries and robotics – China’s top-tier growth companies are forging paths of their own rather than following in the west’s footsteps. Investment manager Sophie Earnshaw names companies that have caught her eye and explains why being a long-term stock picker differs in China from elsewhere.
 
Background:
Sophie Earnshaw is a decision-maker on our China Equities Strategy and joint manager of the Baillie Gifford China Growth Trust.
 
In this conversation, she tells Short Briefings… host Leo Kelion about a select group of Chinese companies breaking new ground, supported by the state’s efforts to become self-sufficient in more of today’s critical technologies and a leader in some of those of the future.
 
Earnshaw also details how the “phenomenal rate” at which companies are born, scale and die in the country makes stock-picking a challenging task – making the access we have to company leaders, academics and other local expertise core to our mission of finding the best firms to invest in on behalf of our clients.
 
Portfolio companies discussed include:
- CATL – the battery maker whose products power electric vehicles worldwide and increasingly support the renewable energy sector
- BeOne and Innovent Biologics – pharmaceutical firms developing the next generation of cancer drugs
- AMEC and NAURA – semiconductor equipment makers enabling China to develop increased self-reliance in computer chips
- Alibaba, ByteDance and Tencent – China’s ‘big tech’ companies, whose artificial intelligence tools are becoming embedded into people’s daily lives
- MiniMax – the AI startup rolling out video and agentic tools at a fraction of the cost of western counterparts
- Horizon Robotics – the automated driving tech provider with its eye on an even bigger opportunity.
 
Resources:
Baillie Gifford podcasts
China: a tale of two stories
China investment strategy hub (institutional clients only)
House of Huawei
Private investor forum 2025: investing in great growth companies
Trip notes: on the road with Baillie Gifford China Growth Trust
 
 
Companies mentioned include:
Alibaba
AMEC
ASML
BeOne
ByteDance
CATL
Horizon Robotics
Innovent Biologics
Jiangsu Hengrui
Huawei
MiniMax
Samsung
NAURA
Tencent
TSMC
Xiaohongshu
 
Timecodes:
00:00  Introduction
01:55   Joining the China Equities Strategy
02:40  Intense competition
04:00  The government’s influence
06:10   CATL, the electrification champion
08:45  Investing with a 5-year time horizon
10:25   Shanghai office, local expertise
11:45   Regulations and geopolitics
14:30   China’s next Five-year Plan
16:15   Innovent Biologics’ new cancer drugs
18:10   Lower-cost clinical trials
19:45   Being selective in semiconductors
21:25   Investing in chip equipment makers
23:00  China’s ‘big tech and AI’
25:10   MiniMax making AI like ‘tap water’
27:45  The road to robotics
29:35  A market you can’t ignore
30:30  Book choice
 
Glossary of terms (in order of mention):
 
Third plenum: a major policy meeting of China’s ruling Communist Party, often used to set big economic/political direction.
Sovereign bond issuance: The government raising money by selling bonds (IOUs) to investors.
Opportunity set: the range of investable companies available to choose from.
Capex: capital expenditure – money spent on long-term assets like factories, equipment, or data centres.
Fiscal deficit target: how much more the government plans to spend than it collects in revenue (taxes plus other income), expressed as a share of the economy.
GDP: gross domestic product – the total value of goods and services a country produces in a year.
Market capitalisation: the total value of a company’s shares (share price × number of shares).
ESG: environmental, social and governance – how a company manages environmental impact, people issues, and corporate oversight.
Large-form batteries: big battery packs used in things like electric vehicles and grid storage.
Energy storage systems: large batteries that store electricity for later use (helping balance the grid).
Generic drugs: copies of medicines whose patents have expired; usually cheaper, same active ingredient.
Bi-specific (bispecific) drugs: drugs designed to bind to two targets at once (often to direct immune cells to cancer).
ADC drugs: antibody–drug conjugates – antibodies that deliver a toxic payload to cancer cells.
Out-licensing: selling rights to your drug/technology to another company (often for upfront + milestone payments).
EUV machines: extreme ultraviolet lithography equipment used to make the most advanced chips.
Foundry: a factory business that manufactures chips for other companies.
Etch and deposition: steps in chipmaking – etch removes material to form patterns, deposition adds thin layers.
Picks and shovels: a metaphor for companies that sell essential tools to an industry (rather than end products).
Digitalisation: moving processes and services from offline to software and data-driven systems.
Compute: the processing power (chips and servers) used to train/run AI.
Large language model (LLM): an AI trained on lots of text to generate and understand language.
Margins: how much profit a company makes per pound/dollar of revenue (after costs).
Cloud business: selling computing power/storage/software over the internet instead of on a local machine.
Algorithm layer: the method or software logic that makes the AI work (as distinct from the hardware).
Gross margin: revenue minus direct costs (before overheads), a rough measure of product profitability.
Assisted driving: features that help a driver (lane-keeping, adaptive cruise control, etc) but don’t fully replace them.
Autonomous driving: a car driving itself with minimal or no human input.
Software attachment rate: the percentage of customers who add paid software features and/or subscriptions.