A Jersey-based fund manager, Contrarius Investment Management, is generating significant returns through a strategic investment in SpaceX. The firm quietly built a substantial position in Nasdaq-listed communications company EchoStar for its $3.4 billion Global Equity Fund, which is also registered in Australia. EchoStar is a communications company that provides satellite communication services. The company sells its spectrum licenses to SpaceX in exchange for cash and shares.
Over the past six months, EchoStar’s shares have more than quadrupled following several deals with SpaceX. These deals involve EchoStar selling spectrum licenses to SpaceX, receiving a mix of cash and shares in return. These transactions initially valued SpaceX at $US400 billion, potentially giving EchoStar a 3 per cent stake in Musk’s company. However, a subsequent funding round in December valued SpaceX at $US800 billion, with reports suggesting a possible IPO this year targeting a valuation of $US1.5 trillion.
Contrarius director Simon Raubenheimer noted the significant long-term upside for EchoStar’s holding in SpaceX, citing Starlink’s strong subscriber growth, record launches, and Starship progress. EchoStar constitutes 8.6 per cent of the Contrarius fund, helping it weather broader tech sector selling, as the fund also holds significant positions in Nvidia, Alphabet, and Meta. The portfolio returned 30.2 per cent in the 12 months to January, outperforming the MSCI World Index’s 6.5 per cent return, and has gained over 20 per cent annually over the past five years.
Australian investors seeking exposure to SpaceX have limited options, as it remains privately held. Pengana Capital, through its ASX-listed Private Equity Trust, holds a 7.7 per cent position in SpaceX. Family office BFA Global Investors has raised $US50 million over the prior six months to invest in SpaceX and xAI after offering clients a minimum buy-in of $US100,000, reflecting strong demand from Australia’s high-net-wealth investors.
