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One of the world's largest fund managers is willing to invest more in Tesla

Lianna Brinded
Head of Finance, Yahoo Finance UK
Tesla’s Elon Musk. Photo: Reuters

One of the world’s largest fund managers and shareholders of Tesla (TSLA) has revealed that it is willing to invest more into Elon Musk’s electric car-maker.

Nick Thomas, a partner at Edinburgh-based Baillie Gifford, said: “If he [Musk] needs more capital we would be willing to back him.” Thomas told Yahoo Finance that the comment is what Baillie Gifford “consistently” says “about supporting our companies as long-term investors.”

In a previous interview with Yahoo Finance UK, Thomas discussed how Baillie Gifford is a fund manager that invests in the long-term and therefore the day-to-day share price shifts, such as from people shorting the stock,  or comments from Musk which can sometimes shake the market that week don’t weigh on its approach.

It’s all identifying industry transforming products or services and the understanding the long road it takes to build a model for that, rather than expecting a quick return on investment, which is what short term traders look for.

It’s for this reason why Baillie Gifford is also one of the largest shareholders in companies that have rapidly grown over the last 20 years, such Amazon (AMZN) as well as having holdings in Netflix (NFLX), Facebook (FB) as part of its ‘patient capital-style’ US Growth Trust, which invests predominantly in listed and unlisted US companies. Baillie Gifford believes that companies within that fund have the potential to grow substantially faster than the average company. 

Baillie Gifford even invested in Alibaba (BABA) before it became a $423bn listed-company as well as Spotify (SPOT) before it floated and became a $32bn behemoth that revolutionised the music industry.

READ MORE: Who is Tesla’s fourth-largest shareholder Baillie Gifford?

The investment management firm has $252bn of assets under management (AUM) — for comparison that’s $100bn more than Ray Dalio’s Bridgewater Associates. While its headquarters is in Edinburgh, Scotland, its AUM by client domicile is split across North America (43.7%), UK (35.8%), Asia (9.1%), with the remainder across the rest of the world.

It counts five of the seven largest pension funds in the US as its customers and makes it clear that it is a long-term investor, not a speculator.

On 29 October, Tesla reported its third-ever profit in its eight years as a public company.

The electric car-maker blew past expectations for revenue and earnings, reporting adjusted EPS of $2.90 per share on revenue of $6.82bn. This exceeded average analyst expectations of losses of 15 cents per share on revenue of $6.32bn. The company brought in an adjusted $516m for the quarter.

In a statement Tesla said the period ending 30 September “was a truly historic quarter for Tesla.”

READ MORE: Amid its Alibaba success, one of the world’s largest investment firms is launching an un-listed stocks fund