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Two seemingly unrelated questions. How do we best treat the estimated 40 per cent rise in new cases predicted in the next two decades? Why does the cost of sending money across international borders remain so high and the charges incurred so opaque?
For Milena Mileva, the connection is that they are two of the ‘hard global problems’ that Baillie Gifford UK Growth Trust companies – electrosurgery specialist Creo Medical and Wise, a foreign exchange fintech – are addressing.
She believes that the portfolio’s up-and-coming companies, “disruptors at the leading edge of innovation,” are well placed for growth over a ten-year time horizon. Already, she says, they’re “bucking the perception that the UK is not a very exciting place to invest.”
Mileva highlights UK companies taking on some of the biggest global challenges:
Creo Medical
The firm develops medical devices for surgical endoscopy – operations carried out by tiny devices inserted into the body via small incisions.
Speedboat, its leading product, is attached to an endoscope and used to cut out or vaporise pre-cancerous growths in the digestive tract before they spread.
“Creo enables medics to detect diseases and intervene earlier, giving a better chance of recovery,” Mileva explains.
“Endoscopes are traditionally only used in investigative procedures to diagnose disease. Creo’s advanced energy platform and set of surgical tools enable endoscopes to perform treatments. These procedures benefit the patient and save money for healthcare systems.”
Mileva points to Creo’s June 2022 licensing partnership with Intuitive Surgical, the global leader in robot-assisted surgery. To her, the tie-up is evidence of the broader applicability of the UK firm’s technology: “The fact that a $6bn-revenue company such as Intuitive is partnering with a small business like Creo is a strong endorsement.”
Wayve
Wayve uses artificial intelligence (AI) to make safe and reliable self-driving cars, applying ‘deep learning’ techniques that involve learning the skill from corrected mistakes and imitation.
“Unlike rivals in the autonomous vehicles field, it doesn’t use high-definition maps and expensive sensors” adds Mileva.
“So the learning isn’t limited to the geographical areas they’ve already been ‘taught’. The aim is to teach the car to drive anywhere.”
The company is still privately owned. The Trust took a stake under new rules that let it invest up to 10 per cent of its holdings in unlisted firms.
Mileva lists the potential benefits of self-driving vehicles as improved road safety, fewer emissions, more efficient delivery of goods and greater access to transport for millions of people.
Exscientia
The ‘pharma tech’ company “precision engineers” drugs tailored to individual cancer patients and those with other diseases. This involves using artificial intelligence at each stage of the drug discovery and development process.
“The company is made up of a 50-50 split between biologists and technologists,” Mileva says.
“From the AI generation of the first novel molecules to the design of a potential therapy typically takes Exscientia around 12 months. The industry average is four and a half years.”
The firm has 25 new therapies in its pipeline including the first three AI-designed drug candidates to enter phase one clinical trials – the first step in testing a new treatment in humans.
Headquartered in Oxford Science Park and listed on New York’s Nasdaq exchange, Mileva is hopeful that “Excscientia will become the next AstraZeneca. The academic credibility of the people involved gives me confidence that it can.”
Wise
Wise has pioneered low-cost, super-transparent international money transfers.
Because it uses its own account in the destination country to pay a recipient an amount akin to the real exchange rate, money does not cross international borders and incur additional costs. Wise is upfront about the (usually lower) fees it charges.
Founded as TransferWise in 2010, the firm has grown rapidly, grabbing market share from banks and other incumbent foreign exchange brokers.
It listed on the London Stock Exchange last year and reported 38 per cent annual revenue growth in its last financial year.
“Individuals and companies transfer an estimated $18tn every year. Over 60 per cent of that is in the hands of banks, where transactions are riddled with hidden charges. It’s expensive and slow,” says Mileva.
“Banks can’t or won’t compete with the scalable technology infrastructure that makes Wise cheaper and faster.”
Words by Holly Thomas
Investments with exposure to a single market may increase risk. The Trust's risk could be increased by its investment in private companies. These assets may be more difficult to sell, so changes in their prices may be greater.
Some of the views expressed are not necessarily those of Baillie Gifford. Investment markets and conditions can change rapidly, therefore the views expressed should not be taken as statements of fact nor should reliance be placed on them when making investment decisions.
The investment trusts managed by Baillie Gifford & Co Limited are listed on the London Stock Exchange and are not authorised or regulated by the Financial Conduct Authority.
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