Schiehallion Fund (LSE:MNTN) is a FTSE 250 stock on the move. It’s up 103% over the past 12 months. This strong performance has seen its share price recently rise above $2 for the first time since 2022.
The obvious question now is, can the momentum continue?
What is this strangely named fund?
Named after the Schiehallion mountain in Scotland, the Baillie Gifford-run investment trust invests in later-stage private companies. In particular, it focuses on businesses that have the “transformational potential to disrupt markets or create new ones”.
Now, this is a stock that I’ve highlighted repeatedly over the past couple of years, including at $0.72 in March 2024. After falling 75%, Schiehallion was trading at a massive discount to its net asset value (NAV).
However, the discount alone wasn’t the only reason I was bullish. The trust’s portfolio contains what I believed – and still believe – are extremely rare companies, including SpaceX, AI lab Anthropic, Stripe, and TikTok parent ByteDance.
Here were its top 10 holdings in April:
The portfolio is booming
Of course, the market has started to come round to this idea now, as Schiehallion offers retail investors a way to get exposure to the likes of SpaceX and Anthropic.
The rocket company could break records when it goes public this summer, while Anthropic’s Claude Cowork has caused carnage across the software sector with its specialised agentic AI plugins for legal, finance, sales, and HR. These allow the autonomous handling of complex, multi-step workflows directly within a company’s files and databases.
In Q1, Anthropic’s revenue and usage increased 80-fold. That’s not a typo – the 0 is meant to be there! It would have been even higher but the firm didn’t have enough compute capacity.
The AI company is currently in talks with investors that could value it at $900bn. Meanwhile, SpaceX could attract a $1.75trn valuation.
Strong results
Needless to say, SpaceX and Anthropic have helped boost Schiehallion’s valuation. In the 12 months to 31 January, the trust’s NAV return was 32.6% while a 64.8% share price surge saw the discount to NAV reduce from 19.2% to a premium of 0.4%.
In other words, the underlying value jumped by a third while investors turned much more bullish on the portfolio. Share buybacks also helped, as the fund spent $13.7m last year repurchasing 11.7m shares.
In April, the trust upwardly adjusted its valuation of Anthropic, which took its weighting from 3.2% of assets to 7.3%. That’s a meaty uplift.
What about the future?
Now trading at a 4.5% premium to NAV, the stock isn’t an obvious bargain anymore. It could fall if the SpaceX IPO bombs, especially as the rocket company could prove overvalued.
On the other hand, the typical company now waits around 11 years to go public. Schiehallion Fund has stakes in six of the 10 largest private growth companies, including Revolut.
Therefore, it offers investors something different, and I expect massive investor interest in SpaceX and Anthropic.
Meanwhile, the recent move to the FTSE 250 should broaden the fund’s appeal to a wider pool of investors. And the ongoing charge of 0.96% is reasonable to gain access to multiple game-changing private companies.
Putting all this together, I think the stock’s still worth considering, especially on position-building dips.
