Australian fund manager Hyperion Asset Management’s substantial investment in Elon Musk’s SpaceX is encountering headwinds as the rocket and artificial intelligence company’s shares retreat towards their initial public offering price. The $12.5 billion money manager, already a major Tesla shareholder, recently disclosed a US$201 million (A$290 million) stake in SpaceX’s Global Growth Fund. This places Hyperion’s total exposure to Musk’s ventures at over $1 billion. SpaceX, a company focused on rocket manufacturing and AI technologies, initially saw its market debut propel shares 73 per cent above its IPO price.
However, this surge proved short-lived, with the stock tumbling 38 per cent to US$139.14, its lowest since the float and barely above its US$135 offer price. While Hyperion asserts the investment “reduces fundamental portfolio risk and enhances long-term potential returns,” rival fund managers like UniSuper and Plato Investment Management swiftly exited for profit. Some, including Minotaur Capital, initiated short positions in SpaceX due to valuation concerns. Other firms, such as Pengana Capital, are subject to mandatory lock-up periods, delaying potential share sales.
This sharp reversal now challenges Hyperion’s recent performance rebound, following a period of underperformance dubbed the ‘SaaSpocalypse.’ The Global Growth Fund, after strong gains in May and over three months, was largely flat in June. To accommodate its SpaceX stake, Hyperion reshuffled its portfolio, reducing holdings in Arm and Spotify, trimming Meta and Amazon, and selling American accounting software company Intuit. Despite these adjustments, Tesla remains Hyperion’s largest holding, growing 6 per cent in the June quarter to exceed US$500 million. Regulatory filings also confirmed Hyperion backed the controversial trillion-dollar pay package for the Tesla boss, approved by shareholders last November.
