Seraphim Space Investment Trust – world’s first listed SpaceTech fund trades at 50% discount to NAV, shares now 50p, soon to float in the US, ready to blast-off?

22.04.2025

I like the concept of paying 50p for assets worth over 100p a share, especially in these markets.

So, I enjoyed reading a recent Space Industry Overview entitled ‘Space For Growth’ which discussed the sector as a whole and reviewed a number of its UK-based players.

One of the featured companies was the £118m-capitalised Seraphim Space Investment Trust (LON:SSIT), which I believe offers some immediate value and upside in a multi-trillion business.

The Business

This trust can be traced back to 2016 and the launching of the world’s first ‘New Space’ technology venture fund – the Seraphim Space Fund, which rapidly established itself as the ‘go to’ venture capitalist funder.

It quickly built up a portfolio of some 50 international space-related companies, with global tech investors taking a positive view and position in several of its early-stage investment situations.

In May 2021 the Seraphim Space Investment Trust was established as a closed-ended investment company, with the purpose of providing investors with exposure to a portfolio of investments in Space Tech businesses.

It raised funds to acquire an Initial Portfolio of 15 investments from the Seraphim Space Fund, valued at some £26.1m, with an agreement to acquire investments in a further four companies, taking its aggregated estimated value up to £70m.

In July that year, the trust floated on the Main Market having raised £178.4m by way of an oversubscribed IPO and, over the next few months, quickly added new investments to its portfolio.

By the end of September that year the trust’s shares touched 132.78p, despite ongoing Covid market pressures, while its net assets had increased to £221m.

Its net asset value had increased 6% to 104p a share, while its portfolio was valued at £99m, with its liquid resources available totalling some £124m, representing 56% of its NAV.

Now Speed On

Today, the trust seeks exposure to predominantly growth-stage privately financed SpaceTech businesses that have the potential to dominate globally and that are sector leaders with first mover advantages in areas such as climate, communications, mobility, and cybersecurity.

The trust’s entrepreneurs see the infinite possibilities of Space and transform those possibilities into game changing companies, while its portfolio companies are at the frontier of tomorrow shaping a better future on Earth.

Its management team has been involved in investing in more than 100 such businesses, by the end of 2024 the trust had a portfolio of 24 SpaceTech companies and one fund investment valued at £216.3m, while also holding £23.5m of cash reserves.

The Top Ten holdings included ICEYE (Earth Observation), D-Orbit (In-orbit Services), ALL.SPACE (Ground Terminals), HawkEye 360 (Earth Observation), LeoLabs (Data Platforms), SatVu (Earth Observation), AST SpaceMobile (Satcomms), Xona Space Systems (Navigation), PlanetWatchers (Data Analytics) and Seraphim Space Ventures II (Various) – those ten investments cost £134.6m and are ‘fair valued’ at £182.0m, making up 75.9% of the trust NAV.

The other investments cost £58.6m and were valued at £34.3m, some 14.3% of the trust NAV.

Manager’s White Paper

Last Thursday, 17th April, the company issued a White Paper by its Manager detailing several policy recommendations to unlock growth within the European space sector required to mitigate Europe's security crisis.

The Manager's white paper sets out recommendations to rapidly boost Europe's defence-related space capabilities by ramping up public and private sector investment and fast-tracking procurement processes to favour more innovative emerging SpaceTech companies.

James Bruegger, Chief Investment Officer of the Manager, stated that:

"The prospect of Europe no longer being able to rely on American intelligence and communications capabilities for its security plays directly to the pressing need for Europe to develop more sovereign space capabilities as quickly as possible.

Europe's over-reliance on America for these highly strategic technologies goes right to the heart of Europe's current security crisis.

The $800bn defence budget coordinated by European leaders reflects the lengths Europe is willing to go to build up its defence capabilities at speed to address such shortcomings.

Cutting-edge innovations from emerging New Space companies will have a critical role to play if Europe is to act decisively to try to address its current deficit in defence capabilities. 

The challenge now, and what this paper seeks to deliver, is several policy recommendations that can provide a much-needed boost to investment capacity and government support required to bolster the European SpaceTech market's efforts to strengthen both Ukraine's and Europe's whole security."

Key Shareholders

The Trust’s Key Shareholders are British Business Finance (14.1%), Schroders (10.6%), Hargreaves Lansdown (7.4%), RBC Dominion Securities (5.3%) and RBC Brewin Dolphin (5.0%).

Analyst View

Brendan D’Souza, analyst at Allenby Capital, notes that the discount to NAV at which SSIT’s shares trade currently offer exposure to both Space and Defence.

Stating that:

“The current discount, combined with the company’s exposure to European defence, offers investors an opportunity to gain exposure to the fast-growing space industry.”

In My View

There is definitely space for growth in this trust’s portfolio valuation, while its shares at just 50p represent an excellent purchase of over 100p per share of value.

There is potential upside of an easy 40% to rest then at around the 70p level and still be favourably discounted.

If it gets its US IPO underway before the end of the year, that 40% improvement could be rapid.