High-flying Seraphim Space (SSIT) is seeking to raise up to £350 million via a C share issue.
The investment trust backs private, early-stage ‘SpaceTech’ companies with the potential to dominate globally.
Accordingly, it plans to deploy the fundraise proceeds into an ‘exciting pipeline of investment opportunities’.
Seraphim Space launched in July 2021 at 100p. After falling to a 2023 low of 26.25p, the share price has recovered strongly. The trust is the best one-year share price total return performer in the Association of Investment Companies’ (AIC) Growth Capital sector.
Seraphim Space trades on a 50%-plus premium to net asset value (NAV). This lofty rating demonstrates strong demand for the strategy which the C share issue seeks to satisfy.
What’s the money for?
The fundraise includes a Retail Book offer to private investors and an institutional placing priced at 100p per share. The money raised will go into a separate pool of assets. Once the cash is invested, the C shares will convert into ordinary shares at periodic intervals.
Seraphim Space intends to ‘double down with conviction’ on new potential leaders in its portfolio. It will also put capital to work with new growth opportunities.
The board believes the SpaceTech sector presents ‘highly attractive investment opportunities strongly aligned with significant global tailwinds.’ And manager Mark Boggett believes the SpaceTech market is at a critical inflection point.
Recent developments have caused a significant cost reduction in access to space with lower satellite and launch costs. SpaceTech’s growth is being driven by global security and climate concerns. Another big driver is the search for the next generation of infrastructure for telecoms and artificial intelligence (AI).
Positive momentum
There is strong momentum within Seraphim Space’s existing high-growth portfolio of 24 companies.
Holdings include ICEYE. This company operates the world’s largest constellation of miniaturised satellites that use radars to capture information about the Earth day and night.
Another position is HawkEye 360. It provides space-based radio frequency intelligence and is lining up an IPO.
Strong pipeline of opportunities
QuotedData analyst Matthew Read said:
‘We are pleased to see SSIT is providing a retail offer for its proposed C share issue alongside a placing.
‘SSIT’s manager has previously highlighted that it has a strong pipeline of investment opportunities, and it is often disappointing when raises of this kind are completed very quickly through institutional placings, leaving retail shareholders unable to participate.’
Read strongly believes that retail investors should have the opportunity to participate in fundraises such as these on comparable terms to larger institutional investors.
Growth-focused investors, willing to risk paying a big premium to NAV, will find Seraphim Space a fascinating proposition.
The portfolio is jam-packed with potential. In fact, six portfolio companies have achieved unicorn status following investment from Seraphim Space.
Boggett recently told Sharesify space is becoming an integral part of the AI revolution. Another key point is he believes few parts of the $100 trillion global economy will be unaffected by space.
Artemis II has rekindled mass excitement about space and our solar neighbourhood. In addition, the incoming IPO of SpaceX should boost interest in the sector.
Read the press release here: https://investors.seraphim.vc/rns-announcements/
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