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This follows on from an article I wrote entitled “Ready to Launch” regarding the listing of SpaceX. The company went off with a bang last Friday and soared over 40% in the first two days.

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Whilst investors who managed to secure shares in the IPO should feel pleased, the winners were those who bought in before they came to market. This is where the real gains are made.

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Scottish Mortgage Investment Trust was an early backer of SpaceX which stemmed from the trust's association with another of Elon Musk's companies, Tesla. At the time they were one of Tesla's biggest shareholders and as a result of the healthy dialogue they had over those years, was able to approach Musk to ask if they could buy into SpaceX. Their initial stake in 2018 has risen 25 times and has contributed to the 48% share price rise in the trust itself over the last year.*

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Their private holdings, of which the trust is permitted to hold up to 30%, now dwarf many of the FTSE 100's largest names and include ByteDance, Anthropic, Stripe, Databricks and Revolut. Many of these private companies could become big IPOs of the future, (Anthropic has announced such intention),  and holders of the trust will have access to them well in advance. Previous private company winners for Scottish Mortgage include the aforementioned Tesla, which grew by 100 times prior to IPO, Alibaba and Meituan a food logistics company - both these were Chinese, which also goes to illustrate the manager's broad reach. There are just under 50 private companies held in the trust alongside their publicly held companies.  For the retail investor, investment trusts offer the only realistic means to access private equity and to gain from the considerable value creation that occurs prior to a listing.  

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Scottish Mortgage, managed by Tom Slater and Lawrence Burns at the Edinburgh based investment firm Baillie Gifford has a market cap of over £16 billion and is currently trading at an average discount to NAV of -6.90%. Since Tom Slater took over from James Anderson as manager in 2015, the fund has grown by +544%.

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P.s.  If anyone has questioned the point of SpaceX, here is one answer - orbital data centres. AI infrastructure needs vast amounts of electricity and , on Earth, often significant water for cooling. In orbit, data centres could be powered directly by the sun and avoid dependency on electricity grids and the earth's valuable water resources. However, because space has no air or water to carry away excess heat generated by the data centres, the challenge becomes developing thermal systems that can. I've no doubt Musk has worked this out.

* FE Analytics to 17/06/2026

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Comments from James Scott-Hopkins, Founder of EXE Capital Management.

The views are those of the author only.

The above does not constitute a recommendation to buy specific funds or assets. The value of investments can fall as well as rise. Past performance is no guarantee of future returns.‍

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