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New Skåne equity fund invests in space: “The gold of our time”
Space is a hot growth sector. Now, a thematic fund is being launched to capture the companies leading the way and aiming for the stars.
According to US investment bank Morgan Stanley, the global space industry is expected to generate revenues of around USD 1 trillion by 2040. If Ace Fonder can capture a fraction of this slightly unreal market potential, it's good news for individuals who choose to invest in the Malmö-based company's equity fund, Space Fund, which was launched earlier this year.
- “It's quite a high risk fund, it's not something you should put all your money into. But it's an exciting sector that clearly has a future,” says Magnus Nicklasson, manager of the Space Fund.
The company Ace Fonder has several years of experience in narrow investment themes; in augmented reality and e-sports. A few years ago, they got in touch with the famous astronaut Christer Fuglesang and discussed a future space fund. Fuglesang took up the idea and is today a partner in the Malmö company where he also works as an advisor alongside Magnus Nicklasson.
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- There is no other fund in Sweden or Europe with the same space theme. In the US, however, you can find a few funds with a similar focus,” says Magnus Nicklasson.
Historically, space investments have almost exclusively been financed by government capital. But in recent years, the cost of launching things into space has fallen dramatically as technology has developed, with private money now flowing into the space sector.
- It just keeps getting cheaper and cheaper. This also makes it easier for companies that want to work with, for example, the satellite sector, which is the largest area in the space economy, and where we also have the core of our fund. This may involve companies that develop components and satellites, but above all companies that work with satellite data in various ways,” says Magnus Nicklasson, emphasizing the value of the information generated by satellites:
- “It is the gold of our time.
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In addition to satellite data, he highlights a number of other areas of activity: extracting solar energy from space, mining minerals from asteroids, and companies developing space infrastructure. This last area ranges from small companies specializing in satellite repairs to large space stations with a cluster of companies involved in the projects.
In addition, the launch industry itself is booming, with billionaire Elon Musk's Spacex rockets being the most famous example of private investment in the space sector. In addition, space-related technologies that are not primarily space-focused, such as artificial intelligence, are bubbling up.
-Another key example is 3D printing, which I am exposed to in the fund. This technology allows rockets to be manufactured in a more cost-efficient way. You can also take 3D printers with you to space, where you can manufacture components for satellites and space stations on site, instead of loading the rocket full of spare parts,” says Magnus Nicklasson.
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With abundant opportunities comes a host of adventurous companies seeking their fortune in space. In this context, it is easy to be attracted to young companies with interesting but relatively untested business ideas. At the other end of the scale are more established and mature companies with lower risk, but usually with a weaker connection to the space theme.
-Pure space companies are of course interesting, but often their financial situation is not as encouraging. They don't make any money, but burn a lot of money at a fast pace, and often end up in situations where they need even more money, which they then burn just as quickly. Here I have to make a balance where I want to try to have as pure a fund as possible while at the same time not making the risks too high,” says Magnus Nicklasson.
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Another well-known area is space tourism, which some predict will have a booming future. Virgin Galactic, headed by billionaire Richard Branson, is one of the companies that organizes tourist trips to space, and which also has an investment corner in the Space Fund. Otherwise, Magnus Nicklasson has a strong emphasis on investments in the United States, where a majority of the world's listed space companies are located:
- But the balance of power could change if, for example, Europe speeds up the ongoing space race, with many now wanting to explore the moon. After that, the next stage of development awaits with the race to Mars, which will have a crucial impact on the future of humanity.
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