SpaceX’s early investors will benefit from this

For nearly two decades, some of the world’s most prominent investors have quietly piled up stakes in SpaceX, but the rocket maker has been largely barred from the public markets.

Now, Elon Musk’s company is seeking a valuation of about $1.8 trillion in its initial public offering, and those early bets are on track to produce the largest paper gain in venture capital history.

The biggest beneficiaries include veteran stock picker Ron Barron, Cathie Wood’s Ark Investments, and mutual fund giant Fidelity Investments. Venture firms such as Founders Fund, Sequoia Capital and Andreessen Horowitz, as well as hedge funds such as D1 Capital Partners and Cortue Management, are also expected to win. Some pension funds and endowments are also set to benefit.

For investors who supported SpaceX even before its success became clear, the gains are surprising. Barron first invested in the company through an employee tender offer in 2017 when the company was valued at less than $22 billion, and has participated in 27 funding rounds since then.

By the end of March, SpaceX accounted for 33% of the $10.4 billion Baron Partners Fund’s assets and 25.5% of the Baron Asset Fund, making it one of the firm’s most significant investments.

“We believe SpaceX will be the largest and most profitable company on the planet,” Baron said during an investor webcast this week. He said his company has invested about $2 billion in the company over the years, and that stake has grown to about $12 billion.

Value creation is still in its early stages

Woods’ arc venture fund It has also benefited greatly from the rapid rise of SpaceX. The rocket maker accounted for 11.4% of the fund’s net assets as of March 31, making it its largest holding in the portfolio.

Wood said Ark views SpaceX as more than a launch provider. “Through the Starship, Starlink, and xAI acquisitions, we believe SpaceX is building a vertically integrated AI infrastructure for the larger space economy,” she told CNBC.

The investment also reflects Ark’s broader theme around technology convergence. SpaceX sits at the intersection of the company’s core innovation themes, including artificial intelligence, robotics, and energy storage. Wood believes the company’s next phase of growth could be driven not only by its existing Falcon 9 launch business and Starlink satellite network, but also by Starship, a next-generation rocket system that could open up new commercial opportunities in space.

“For long-term shareholders, an IPO provides broad access to a company that we believe is in the early stages of value creation,” Wood said.

No traditional asset manager benefited more from SpaceX’s rise than Fidelity Investments. The Boston-based company got in early through former portfolio manager Gavin Baker, who started buying shares in 2015 when SpaceX was valued at just about $10 billion.

As of March 31, SpaceX accounted for 4.7% of the $177 billion Fidelity Contrafund, one of the world’s largest actively managed mutual funds. The firm also represented 3.3% of the $103 billion Fidelity Blue Chip Growth Fund and 2.6% of the nearly $99 billion Fidelity Growth Company Fund.

Fidelity declined to comment for this story.

Ace is coming

The extraordinary profits reflect not only the company’s growth, but also the scarcity of access.

“They were taking a chance on Elon, and they hit an ace,” said Greg Martin, co-founder and managing director of Rainmaker Securities. “Once they took a chance on Elon, they found that long-term cap table positions were very scarce because the cap table is so tightly controlled.” A cap table, or capitalization table, is a written breakdown of a company’s stock ownership.

Unlike many venture-backed companies that regularly expand their shareholder base, SpaceX maintains tight control over who can invest, Martin said. As a result, investors who secured positions early often had the opportunity to participate in later funding rounds that were unavailable to most institutions.

“Our early bet on Elon not only paid off, but we were able to deploy even more capital as the business became more and more clearly successful,” Martin said.

This dynamic helped turn a relatively modest initial investment into a position worth billions of dollars. Venture firm Founders Fund began backing SpaceX in 2008, while hedge funds such as Cotu and D1 gained exposure through subsequent private rounds.

“Most of our success is thinking about all the nonsense that other people are doing, and hopefully doing it is like 75 percent of our work,” said Philip Laffont, founder of Cortue Management, at the Global Arts Conference in New York this week.

pension and endowment

Pension funds and university endowments also stand to gain significantly from SpaceX’s debut, highlighting how the company’s rise has rewarded institutions responsible for funding retirement benefits, scholarships and academic research.

The Ontario Teachers’ Pension Plan invested more than $200 million in SpaceX in 2019 through a then-newly created technology-focused investment vehicle. At the time, the pension administrator said SpaceX was an “attractive investment opportunity” due to its “proven track record of technological disruption in launch space and significant future growth potential in the satellite broadband market.”

University endowments have also emerged as major beneficiaries. Washington University in St. Louis invested about $50 million in SpaceX nearly a decade ago, and its stock rose dramatically as the company’s initial public offering price climbed toward an IPO. Its holdings now account for more than 10% of the university’s approximately $17 billion endowment, according to Bloomberg News.

The University of Washington declined to comment, and the Ontario Teachers’ Pension Plan did not respond to CNBC’s request for comment.

Correction: A previous version incorrectly listed the Baron Asset Fund’s allocation to SpaceX. It is 25.5%.