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Monzo director to step down from £9bn Scottish Mortgage fund after board row

A boardroom bust-up at one of the UK’s most popular investment vehicles follows a tricky period for its high-growth technology-focused portfolio.

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Fiona McBain, a board director of neo bank Monzo, will step down as chair of the £9.3bn Scottish Mortgage investment trust in June following a publicly held row over its venture capital investments.

Scottish Mortgage, one of the UK’s most popular investment vehicles, is a 114-year-old closed-ended fund and a constituent of the FTSE 100. 

While it mostly invests in the publicly-listed securities of some of the largest ‘disruptive’ technology companies in the world, Scottish Mortgage has also built up its ‘unquoted’ holdings in technology start-ups and scale-ups such as Wise and over the past decade. These total about one-third of its total assets, mounting to c.£3bn.

It is these investments and how they are managed, that is the source of a publicly held boardroom bust-up alongside criticism of the appointment process of directors of Scottish Mortgage.

Amar Bhidé, a fellow board member - who has stepped down as part of a wider boardroom shake-up - criticised McBain in a letter to the Financial Times last week.

“I’ve been very concerned about the share price performance and the discount, and trying to get people to understand that there is a structural reason for this,” Bhidé said. 

Aside from the mammoth portfolio’s holdings in illiquid venture capital, Bhidé said he also clashed with McBain over the process to appoint new directors, which is now being handled by an external agency.

McBain holds a number of board positions in financial services aside from Monzo, including Direct Line and - alongside fellow Monzo director Eileen Burbidge - Currrys. She has been a board member of Scottish Mortgage for 14 years while Bhidé joined in 2020. McBain will step down in June of this year.

“I would also like to thank Fiona for her 14 years of loyal and exceptional service to the Company, in particular over the last few years (and at the request of her fellow directors) providing essential continuity, reassurance and leadership during the extraordinary circumstances of Covid-19 and through a period of transition on the Board and with the Managers," said Justin Dowley, Senior Independent Director of Scottish Mortgage.

21.03.23 - Correction. The article was updated to clarify Fiona McBain will step down in June 2023.

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