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NewsMaterial4 min readDisconfirmAI Editorial

Baillie Gifford LTGG Investment Manager Douglas Jack: No Sector Coverage, Let Curiosity Find the Exceptions

LTGG investment manager Douglas Jack explains why the fund deliberately avoids assigning sector research coverage, and how three principles—curiosity-driven exploration, permission to be wrong, and deep on-the-ground engagement—work together to identify the few truly exceptional companies.

2026-11-05

Facing a candidate pool of approximately 4,000 to 5,000 companies, no one can pretend to cover them all. Douglas Jack, an investment manager for Baillie Gifford’s Long Term Global Growth (LTGG) fund, frankly admits that LTGG lacks a rigid, step-by-step idea generation process—a fact that sometimes makes explaining their approach to outsiders difficult. Instead, he focuses on several principles he believes distinguish LTGG from other managers, explaining why these principles contribute to long-term outperformance.

With roughly 4,000 to 5,000 candidates currently under consideration, LTGG does not pretend to cover every name. Jack argues that the traditional practice of assigning each analyst a specific industry has two fundamental flaws. First, exceptions are not evenly distributed across the economy; locking someone into a 'box' with nothing interesting to see is pointless. Second, this allocation creates poor incentives: analysts feel pressured to constantly pitch mediocre names just to appear busy. Since LTGG’s mandate is to invest in a small number of key outliers, any time spent away from high-probability candidates harms returns.

Consequently, LTGG analysts are all generalists, with no one holding formal 'coverage.' However, everyone has technologies, industries, or themes they follow closely over time—Jack looks around the office and sees deep expertise in luxury goods, robotics, payments, semiconductors, AI, and cryptocurrency. No one is forced to learn these topics; instead, they are encouraged to 'follow their noses' and pull on threads that interest them.

Jack cites a specific example: the analyst who first brought Nvidia to the team in 2016 was initially interested because of VR headsets, not because she was assigned as a semiconductor analyst. While researching Nvidia, she pulled on the AI thread a bit further and realized, though ultimately underestimating the scale, just how profound a change it could bring.

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Another concept is open-mindedness. Because analysts work in their own way, the traditional boundaries imposed by benchmark indices play a smaller role in their thinking. Jack himself has spent considerable time over the past two years focusing on AI, which has given him a more holistic view across multiple sectors such as software, semiconductors, and energy. This approach makes it easier to spot discontinuities or shifts that a structured sectoral method might miss. He points to their 2004 investment in Amazon, which did not fit the mold of a traditional retail company at all; the investment thesis was based on the potential of a business with ever-declining input costs and Jeff Bezos’s long-term vision.

For outlier hunters, Jack believes that 'things going wrong' is a necessary cost of the pursuit. The risk that keeps LTGG analysts awake at night is not losing money, but missing an outlier. They regularly review missed opportunities and try to identify patterns, helping them overcome the inner voice that says 'everything could go wrong,' allowing them to bring riskier ideas to the table.

Simultaneously, LTGG has built a culture from top to bottom of openly and honestly discussing disappointing investments. Jack explicitly states that while they learn from these mistakes, discussing errors with candor and a degree of levity reinforces the message that taking risks and learning from them is encouraged within LTGG. He acknowledges that they have made far more mistakes than successes—from solar panel manufacturers to 3D printers to alternative protein companies—but this has not impaired their ability to generate long-term outperformance for clients over the past twenty-plus years.

On the information front, LTGG has a growing private companies division, originating from within LTGG more than a decade ago. Talking to founders building the future in private markets not only helps prepare for their IPOs and understand competitive threats to existing holdings, but also introduces new ideas. Jack gives the example of Baillie Gifford’s longstanding holding in SpaceX, which gave them access to the broader space economy and other players, including current holding Rocket Lab.

LTGG also has a strong culture of getting on the ground. It is not uncommon for analysts to spend weeks on the road meeting dozens of companies, nor is it rare for them to embed themselves in a key location for months to truly understand an emerging theme. Jack specifically highlights China: while many other managers have given up on Chinese opportunities, LTGG retains an on-the-ground presence led by team member Linda Lin, enabling them to meet many companies that other managers have cut ties with.

Jack concludes that LTGG does not have a neat idea-generation funnel. They do not systematically screen thousands of companies, nor do they expect every analyst to produce a fully formed pitch from an assigned sector. Instead, they create conditions where unusual ideas are more likely to surface: giving curious people the freedom to follow interesting threads, encouraging consideration of outcomes that initially seem improbable, and supporting ideas when they don’t work out. This may look unstructured, but it is not aimless—everything is anchored to the same goal: finding the small number of exceptional companies capable of driving long-term returns. Jack admits they won’t find every outlier, but believes this 'follow your nose' approach, being prepared to look wrong along the way, improves their chances of finding the few that really matter.

Sources

  • bailliegifford.com↗
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