When Scottish Mortgage’s board of directors announced the biggest buyback in the history of investment trusts, the share price jumped and the activist investors at Elliot blushed modestly and insisted this was not the plan all along. 

The three allocators among those we cover that own the trust have had a nice run this year, with the shares up 13 per cent, something which will be particularly pleasing for the allocator who came aboard in the final quarter of 2023. 

But the promise of more to come (the buyback continues) isn’t enough to please the analysts at Investec, who have slapped a big old “sell notice” on the largest trust in the UK market. 

Alan Brierley, the head of investment trust research at Investec, notes that more than £500mn of the buyback has already happened, and wonders what the plan will be after that.

He says the sell notice is due to his concerns about the health of the balance sheet and the outlook for the unquoted positions, which he believes will negatively impact performance in future.  

Among those to have taken advantage of the buyback are understood to be Elliot Advisers who have reduced their stake but remain the largest shareholder. 

But as far as allocators are concerned, we have covered their general aversion to investments trusts within the equity space already. It probably doesn't help that Scottish Mortgage is something quite sui generis, in its mixture of private equity and growth equity.

The two global equity funds which are most popular among allocators are ones which focus on growth from a large cap perspective: Fundsmith Equity and Ninety One Global Environment.

A representative of Scottish Mortgage said: "The board and managers are resolutely committed to facilitating trading around NAV and maximising returns for shareholders. In March the company announced it would make at least £1bn available for share buybacks over the next two years. Since then, the discount has narrowed by around 10 per cent which has contributed towards a share price return of 45 per cent over the past year.

"Our mission is to find the world’s most exceptional growth companies and patiently own them over long periods of time. The pace and scope of transformation around the world is accelerating, in many cases fuelled by the adoption of AI. History has shown that only a small number of companies drive transformative change and go on to dominate stock market returns. We are excited about the future and confident that the Scottish Mortgage portfolio is home to some of these extraordinary companies."