RIT Capital Partners makes notable £26m stake in SpaceX

RIT Capital Partners, one of the London Stock Exchange’s most prominent investment trusts, has revealed a significant £26 million investment in SpaceX, marking a noteworthy addition to its portfolio. The announcement was made as part of the trust’s annual results, showing its valuation of the stake at £26.4 million as of the end of 2024. This accounts for approximately 0.7 per cent of the trust’s net asset value.

The investment comes as RIT Capital Partners aims to balance its portfolio of private and public assets. The trust has been reducing its exposure to unlisted investments in a bid to improve performance and address investor concerns over the opacity of private holdings. Despite this shift, SpaceX is viewed as a compelling opportunity. According to Maggie Fanari, chief executive of J Rothschild Capital Management, SpaceX’s resilience and innovation over two decades make it an appealing venture.

Since its foundation in 2002 by Elon Musk, SpaceX has emerged as a global leader in private space exploration. It has pioneered advanced technologies, such as reusable rockets, and programmes like the Starlink satellite internet service. Its achievements also include successful astronaut missions to the International Space Station. Fanari confirmed the investment was driven by SpaceX’s potential as an independent company, regardless of Musk’s personal influence or close ties to the US government.

SpaceX’s valuation rose to approximately $350 billion after a December transaction which saw the company and its investors repurchase shares from employees. This has cemented its position as the world’s most valuable private start-up. RIT joins other UK-based trusts, such as Scottish Mortgage and Edinburgh Worldwide, in offering exposure to SpaceX, granting investors access to one of the most exciting businesses in the aerospace and technology sectors.

RIT’s wider portfolio of unlisted holdings fell to 33.4 per cent of its net asset value by the close of 2024, compared to 35.9 per cent at the end of the previous year. This movement aligns with a strategy announced in 2023 to reduce its stake in private companies. The investment trust posted a return of 9.4 per cent for the year, although analysts note that its shares continue to trade at a substantial discount to net asset value, with its market capitalisation standing at £2.78 billion.

The trust is also undergoing leadership changes with Sir James Leigh-Pemberton stepping down in May as Chairman, having succeeded RIT founder Lord Rothschild in 2019. Philippe Costeletos, currently the senior independent director on the board, is set to take his place. These developments follow the appointment of Maggie Fanari as RIT’s chief executive last year and Nick Khuu as chief investment officer at the end of 2023.

RIT Capital Partners has a rich history, generating an impressive net asset value per share total return of 3667 per cent since its listing in 1988. However, the trust has faced challenges in recent years, with negative returns over the past three years. Investors are closely watching the new leadership team’s efforts to reinvigorate performance and sustain long-term growth.