Clients of Baillie Gifford are in line for a multibillion pound windfall as Elon Musk’s rocket company SpaceX prepares for a potential stock market debut that could be one of the biggest listings in history. The Edinburgh based investment manager was an early institutional backer of SpaceX and now stands to crystallise gains running into billions of pounds if the flotation proceeds at its mooted valuation.
Baillie Gifford first backed SpaceX in 2018, taking positions across several flagship investment trusts when the private company was valued at around 31 billion dollars, or roughly 23 billion pounds. That early conviction has since swelled in value as SpaceX’s private valuation has climbed towards 1.75 trillion dollars, equivalent to about 1.3 trillion pounds, driven by rapid growth in its launch and satellite businesses.
Current disclosures suggest Baillie Gifford’s combined SpaceX holding across four trusts is worth close to 3.9 billion pounds on recent valuation marks. If the company lists at the upper end of expectations, the asset manager is projected to lock in an average return of around 18 times its initial outlay.
Scottish Mortgage, Baillie Gifford’s flagship global growth trust, is expected to be the main winner. SpaceX already accounts for close to a fifth of its 12.8 billion pound portfolio after a series of revaluations this year, pushing the trust towards its 30% cap on private company exposure.
Scottish Mortgage’s stake, originally acquired for around 200 million dollars (about 150 million pounds), could be worth roughly 3 billion pounds at listing if the top end valuation is achieved. One recent uplift alone is reported to have added about 748 million pounds to the trust’s net asset value in a single day.
Baillie Gifford’s specialist trusts are also set for sizeable gains. Edinburgh Worldwide Investment Trust is on course for an almost 22 fold return, with its SpaceX holding rising from 8.5 million pounds to an estimated 186 million pounds on the IPO numbers being discussed. US Growth Trust may see its SpaceX stake climb from 6.5 million pounds to around 125 million pounds, despite trimming the position previously for risk reasons.
SpaceX is reported to have confidentially filed for an initial public offering with US regulators, giving it flexibility over timing. Market reports suggest the deal could seek to raise around 75 billion dollars, approximately 56 billion pounds, to fund Musk’s ambitions in heavy lift rockets, satellite broadband and space based artificial intelligence.
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If achieved, the mooted 1.75 trillion dollar valuation would make SpaceX one of the world’s most highly valued companies at IPO, on a multiple reportedly above 60 times current revenues. Some analysts warn that the scale of the deal and a demanding valuation could create volatility once trading begins, though others argue SpaceX’s dominance in commercial launches and its fast growing Starlink network justify a premium.
The looming payday comes as Baillie Gifford faces scrutiny over performance and governance at several trusts after the technology led sell off in 2022 to 2023. Activist investors have questioned earlier decisions by some boards to cut SpaceX holdings, arguing lucrative positions were sold down too soon, while managers insist the moves were prudent risk management.
For Baillie Gifford’s clients, a successful listing would feed directly into the net asset values of Scottish Mortgage, Edinburgh Worldwide, US Growth and Schiehallion, potentially delivering a material boost for savers exposed via ISAs, pensions and direct holdings. The episode is already being cited as a powerful example of the rewards and risks of backing ambitious private companies early and holding them through volatile cycles.
