Seraphim Capital plans to trade stakes it has amassed in space technology startups on the public market through an investment trust.
The Seraphim Space Investment Trust will eventually comprise bets in 19 international startups, including satellite data specialist Spire Global, quantum encryption firm Arqit and space-based cellular network operator AST Space Mobile.
Those three recently got valuations of more than $1 billion in mergers with special purpose acquisition companies (SPACs), investment vehicles that offer another route to public markets.
AST Space Mobile (ASTS) went public in April after completing its SPAC merger. Spire expects to follow this summer, and then Arqit in the third quarter of 2021.
Seraphim said it will publish a prospectus detailing plans to launch an initial public offering (IPO) on the London Stock Exchange in the coming weeks.
Announcing intentions June 11 to trade on the public market, it said its space technology fund is currently demonstrating an internal rate of return (IRR) of 31%.
The Seraphim Space Investment Trust will target an annualized return of net asset value (NAV) of at least 20% over the long term.
Will Whitehorn, former president of space tourism venture Virgin Galactic who will chair the trust, said the plans will open up space beyond billionaire entrepreneurs and other private investors.
“Space Tech is forecast to be a multi-decade, trillion-dollar investment market that has not previously been available through listed opportunities,” Whitehorn said in a statement.
“We are excited to offer investors access to a diversified portfolio of some of the sector’s highest growth-potential companies.
Seraphim’s definition for space tech businesses covers those relying on space-based connectivity or precision, navigation and timing signals.
It also includes those with technology or services that are already addressing, originally derived from, or potentially benefiting the space sector. That covers the growing market for electric vertical takeoff and landing (eVTOL) businesses.
The trust will initially leave out Spire, Arqit, Earth imaging operator Iceye and space logistics firm D-orbit when it acquires Seraphim’s portfolio of 19 investments.
It said these companies are currently subject to corporate activity that may have a material impact on the value of these investments.
The trust plans to acquire the rest or a portion of the retained investments before the end of this year, pending the completion of that corporate activity or confirmation that it will not wrap up any time soon.
About £70 million ($99 million) of value could be added if the trust acquires the rest of the portfolio, Seraphim said based on May 31 valuations, on top of the £26 million coming from the initial 15 seed assets.
Deutsche Bank and JP Morgan are working on the IPO, which previous reports said could raise around $355 million.