Baillie Gifford has taken Asia fund manager Roddy Snell off its China Growth investment trust as the group scales back its Shanghai office and launches a dedicated Chinese equities team at its head office in Edinburgh.

The new ten-strong team will be led by Linda Lin, a Baillie Gifford partner, who has recently returned to Scotland from China for the role.

Lin, who was appointed head of investment research when Baillie Gifford opened the Shanghai office in 2019, will replace Snell as co-manager on the £111m Baillie Gifford China Growth (BGCG ) trust.

Since the former Witan Pacific appointed Baillie Gifford to run it as a China fund in 2020, the shares have lost about two thirds of the value as both the group’s growth style and China have fallen hugely out of favour. The shares stand on a 7% discount to net asset value.

The move frees Snell to focus on his other trust, Pacific Horizon (PHI ), which has also had a challenging three years, down over 29% against a 14.9% decline in the MSCI Asia Pacific index.

Snell’s colleague Mike Gush is also making way for Lin on the £238m Baillie Gifford China open-ended fund to concentrate on his other Asia Pacific and emerging markets funds.

At the time of the China office opening, former star Japan manager John MacDougall moved from Scotland to lead the operation. As part of the restructure, MacDougall returns to Edinburgh.

A spokesperson for the company confirmed that the Shanghai office would remain open.

Alongside Lin and MacDougall, the new China team will include Earnshaw and Shanghai office members Rio Tu, Louise Lin, Tony Wang, Freddy Zhu, Clark Ren, Doris Gu and ESG analyst Lin Qin.

Baillie Gifford has a long history of investing in Chinese equities, both in public and private markets. It made its first investment in the region in 1994 and its first private investment in Alibaba in 2012. 

James Budden, the firm’s director of marketing and distribution, said: ‘Purely focussing on China’s risks could find investors missing out on growth opportunities. The Chinese government is back to supporting private enterprise in a bid to achieve promised prosperity. Despite geopolitical tensions China is the home of world beating growth companies pioneering many disruptive trends of the future.’

The emerging markets reorganisation following news of redundancies at Baillie Gifford after outflows and challenging performance for many of its strategies. Lay-offs are expected to fall across its fixed income, client services and back-office divisions, while the closure of three funds was announced last week.