Britain's biggest listed fund, valued at nearly 7 billion pounds, is one of few UK-based retail funds that invests in both listed and unlisted companies.

Traditionally the preserve of large institutions and well-connected, wealthy individuals, Scottish Mortgage Trust is able to invest in illiquid, unlisted firms partly because as a listed entity it can raise funds without having to worry about investors later suddenly demanding their money back.

On Friday, the Edinburgh-based company run by Baillie Gifford fund managers James Anderson and Tom Slater, detailed for the first time how that strategy had paid off.

Since its first investment in an unlisted company, in June 2010, such companies in the Scottish Mortgage Trust portfolio had grown in value by a collective 419 percent by the end of September 2018, the fund said.

By comparison, the Scottish Mortgage portfolio as a whole had risen by 344 percent during that time - still more than double the performance of the FTSE All-World Index.

The fund's stack of unlisted companies also includes recently listed peer-to-peer lender Funding Circle, but not all have been successful. While star performer Alibaba has returned 1,000 percent since the fund bought a stake in 2012, others such as food delivery company Hello Fresh and online furniture retail company Home24, had so far disappointed.

"Just as with the publicly listed holdings, some will not work and a number may fail outright. Only a handful will really drive the returns," the company said in its first-half results statement.

Establishing relationships with the founders of companies at an early stage is key, Scottish Mortgage Trust said, citing the example of digital music firm Spotify, founded by Daniel Ek and which listed in New York in April.

"While the value of the relationship developed with Daniel Ek is harder to measure, it may be at least as important to generating long-term returns for Scottish Mortgage shareholders from here," the company said in a statement.

The Scottish Mortgage portfolio currently includes 37 unlisted equities, and a further 13 that started off as unlisted investments but are now listed, the company said.

Listening to Jack Ma, founder of Chinese e-commerce giant Alibaba, before its IPO and since, had been critical to the fund's understanding of the development of the consumption economy within China, Scottish Mortgage said.

In addition, it had directly led to the trust's ability to invest in Alibaba's financial technology company, Ant Financial, which was driving the digital provision of financial services in China and had the potential to go global.

"It is hardly an undiscovered gem, but few can actually gain access to invest," the trust said

(Reporting by Simon Jessop; Editing by Susan Fenton)

By Simon Jessop