‘Let it ride’: Pengana’s prized SpaceX stake doubles in value
Pengana Capital has doubled the valuation of Elon Musk’s SpaceX to $US800 billion ($1.1 trillion), with its prized stake expected to generate big returns for the money manager as the rocket company prepares for a blockbuster initial public offering in the coming months.
The Sydney-based firm originally valued the hotly anticipated IPO at $US400 billion, but upped its valuation following a secondary share sale in December. SpaceX is the largest position in Pengana’s Private Equity Trust, which returned a tidy 5.2 per cent in February.
That valuation appears conservative, however, given SpaceX acquired Musk’s artificial intelligence start-up xAI last month in a deal that valued the enlarged entity at $US1.25 trillion.
Bloomberg reported that SpaceX is targeting filing confidentially for an IPO as soon as this month and could seek a valuation of more than $US1.75 trillion. The listing is expected to raise as much as $US50 billion, surpassing Saudi Aramco’s record $US29 billion debut in 2019.
Pengana said it intended to hold SpaceX all the way through its IPO and beyond because it expected enormous demand for the stock once it hits the boards.
“You would hope the IPO is priced at a discount to the fully traded value, and given it will be a massive component of the Nasdaq and S&P 500, we would expect the indexes will buy it, and we get an extra leg up in the market afterwards,” Pengana chief executive Russel Pillemer said in an interview.
Pengana initiated a near 2 per cent position in SpaceX in late 2020 when the company was valued at just $US50 billion. At the time, that was already an unusually large exposure for the fund, given it holds about 500 companies.
But the holding has now ballooned to 14 per cent of Pengana’s fund, which has no restrictions on a company’s weighting in the portfolio.
“We bought SpaceX when it was a very modest valuation, and we’ve just let it ride, and we’re happy to keep doing that because we think there’s a lot more to go,” Pillemer said.
Pengana is one of the few Australian funds with exposure to SpaceX, given it is still privately held. The private equity trust also holds positions in artificial intelligence giants OpenAI and Anthropic, which are also expected to go public this year.
Demand from Australia’s high-net-wealth investors to get a slice of SpaceX has been particularly strong.
Investment manager BFA Global Investors said in January that it had raised $US50 million over the previous six months to invest in SpaceX and xAI after offering clients a minimum buy-in of $US100,000.
The private assets investment manager already raised $US35 million last year after offering clients access to SpaceX, along with ChatGPT maker OpenAI, and PsiQuantum, a Silicon Valley quantum computing start-up backed by the Australian government.
Other fund managers are coming up with more creative ways to invest in the world’s most valuable private company.
Jersey-based Contrarius Investment Management has been building a position in Nasdaq-listed communications company EchoStar for its $3.4 billion Global Equity Fund, which is also registered in Australia.
EchoStar holds a roughly 3 per cent stake in SpaceX through several deals which involved the telco selling its spectrum licences to the rocket company in exchange for a mixture of cash and shares.
Spectrum is like an invisible highway for wireless signals, which SpaceX plans to use to boost the performance of Starlink, its satellite internet network. EchoStar is now the second-biggest holding in the Contrarius fund with a 9.1 per cent weighting.
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