Risk-wary public investors find value in space industries

As it matures, the high-flying commercial space marketplace is drawing interest from risk-wary Wall Street bankers who are wading into the wilds usually trekked by venture capital firms, a panel of experts said during the 39th Space Symposium in April.

That’s good news for space companies, which have faced a tighter capital market amid 2022 amid rising interest rates. Large sectors of the space industry have massive up-front costs that must be financed before rockets launch or satellites head to orbit, a turn-off for mutual funds and other public equity buyers. But, especially with established space firms, the risks long associated with spaceflight are gradually being outweighed by the returns space firms can attain with success.

“I think space is investable from a public market perspective,” said Austin Moeller with Canaccord Genuity, one Canada’s largest financial management firm.

And it is not just a few investors who are looking for value in orbit.

“I think the is a broad-based consensus on space being an enduring market on a go-forward basis,” Mithil Mehta who serves as JP Morgan’s space investment expert.

Not every company in the space business will have fund managers. The most speculative ventures are still the domain of risk-loving angel investors.

Sameer Garg, who oversees Citigroup’s space investments, said conservative investors can embrace space when they spot profit.

“Ultimately, I do think it is going to be more fundamental, valuation driven,” he said. And that is what we steer our clients towards.”

Greg Konrad who oversees space investments for Jeffries, a global full-service investment and capital market firm, said to draw investment, space companies need to explain what they do in a way that shows ordinary people value.

“I think investors appreciate stories that have growth, but are also somewhat easy to understand,” he said.