Investment trust insider on Seraphim Space – James Carthew: investing in space has colossal potential
I thought this week, following the publication of its prospectus, I would take a look at Seraphim Space Investment Trust (SSIT), the UK’s first listed space technology fund which was unveiled last month with ex-Virgin Galactic president Will Whitehorn as chair.
The trust is looking for £150m of cash, which it hopes to augment by issuing 30m shares at £1 a share to the owners (some of whom are members of the management team) of a seed portfolio of 15 assets.
The objective is to deliver capital growth and its ambitions are not modest: 20% per annum net asset value (NAV) total returns over the long term. Such returns are achievable. The investment companies sector can boast eight funds – the usual suspects, Scottish Mortgage (SMT), Allianz Technology (ATT) and Polar Capital Technology (PCT), for example – that have achieved such returns over the past 10 years. However, for me, that figure felt more headline-grabbing than realistic.
The managers, Seraphim Capital, have some relevant experience, having established a precursor fund in 2016 which is the source of SSIT’s seed portfolio. They can also point to a 31% IRR on existing investments (although bear in mind how short a time frame we are considering here).
This is obviously a new asset class among investment trusts, but I guess it will be allocated to the Association of Investment Companies’ Growth Capital sector. Most of the investments will be unlisted. Seraphim says it will leave seed capital and series A financing to other investors, and focus mainly on series B and above funding rounds.
As the prospectus highlights, there are risks associated with investing in a largely unproven investment category… read more here