"It's the other way round, the challenges were looking for me"

Anna Bretschneider
Head of Switzerland, Baillie Gifford

 

Ms Bretschneider, Baillie Gifford started with you as Country Manager in Switzerland in 2019: the beginning of one of the most difficult and turbulent market phases in a long time. How is the set-up in Switzerland going?

The timing of our start in Switzerland was indeed somewhat special! Shortly after we opened the office in Zurich, the pandemic hit with all the associated restrictions. Now, like the entire financial industry, we had to face new and previously unknown challenges.
In terms of performance, 2020 was a very positive year and gave us a tailwind in Switzerland. As we all know, this was followed by some difficult years for growth investors. An unpleasant cocktail of rising interest rates, geopolitical turbulence and extreme risk aversion led to enormous market fluctuations and a sharp decline in performance. In such periods, it is all the more important to remind our clients that in the past, difficult market phases of this kind have often been followed by periods in which excellent returns could be achieved. As a privately held partnership with a long-term focus, we are very fortunate to have no external investors or owners and are therefore free from the pressure of having to achieve short-term targets. This makes the task of building a business in Switzerland not only enjoyable, but also more effective in many ways.

Baillie Gifford's investment in Climeworks, a Zurich-based company specialising in the extraction of CO2, caused quite a stir. What tipped the scales in favour of participating in this financing round?

Climeworks develops and commercialises the technology to capture carbon dioxide from the air and store it underground. This direct air capture (DAC) method could play a key role in the pursuit of negative emissions technologies needed to avoid the worst effects of climate change. Today, Climeworks has the largest operational DAC storage facility in the world, the Orca facility in Iceland. In recent years, Climeworks has expanded its operations to North America and signed contracts with large companies such as Microsoft, Stripe & Shopify to help them achieve their carbon neutrality goals. The benefits of Climeworks stem from its pioneering role, which we believe will allow it to lower the cost curve earlier than the competition. We believe that if Climeworks can achieve this cost reduction, the technology can be rapidly deployed and scaled by others. This will have a significant impact on growth, returns and positive impact on society.

Baillie Gifford is known for the Global Discovery Fund, which focuses on new technologies and innovations. Is Climeworks part of the portfolio?

No, the fund invests exclusively in listed companies. Climeworks can be found in our investment trusts, which can also invest in privately held companies. In this case that would be our Global Investment Trust, Scottish Mortgage, and our Impact Global Investment Trust, Keystone Positive Change.

Baillie Gifford is closely associated with Elon Musk's companies and was an early investor in Tesla and SpaceX. Both companies came close to bankruptcy several times. How does an asset manager communicate such risks to its clients?

We recognise that our clients have different risk appetites and therefore offer a wide range of global and regional equity portfolios with different risk profiles. We also fully disclose what we hold in our portfolios. Often the most attractive investment ideas are associated with significant volatility, as the market tends to focus on short-term news and quarterly results. The ability to look past this is a real art and requires a lot of discipline, a long-term investment horizon and imagination. This means that we often invest in companies for several years, sometimes even decades. The results can be very rewarding. Tesla is just one example of a success story, but there are many others such as Amazon, Hermès International, NVIDIA or Tencent.

You were previously at Macquarie Investment Management, an Australian company, and headed up the organisation in Switzerland. Now you are doing the same with Baillie Gifford. Are you looking for challenges like this?

That makes me laugh! I think it's more the other way round, the challenges were looking for me. But it's true, I've always enjoyed tackling and creating something new. That was also the case at the beginning of my professional career.

How do you go about gaining a foothold in this highly competitive Swiss market?

I approach the task with patience and a lot of enthusiasm! We have been working with clients in Switzerland for many years and have a very good reputation in the market, which we want to maintain and build on. Our focus is exclusively on professional investors. We are a small team and therefore set clear priorities. By this I mean, among other things, that we are looking for like-minded clients who understand our investment style and share our long-term thinking.

In asset management circles, the Swiss market is considered to be one of the most sought-after. Do you agree?

Yes, definitely. But it's also not a new phenomenon. That's why there are so many foreign asset managers on the Swiss market and the market is highly competitive.

What would make the Swiss asset management market even more important?

The year 2023 brought a real whirlwind with the takeover of Credit Suisse by UBS. This also caused quite a stir internationally and, in my opinion, damaged the image of the Swiss financial market. I think it would be good if more stability and trust were restored to the system.