«We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard,» exclaimed John Fitzgerald Kennedy in 1962.
By Rolando Grandi, CFA, Thematic Global Equity Fund Manager, La Financière de l’Echiquier (LFDE)
Today, despite the hardships and challenges, there are myriad private operators striking out to conquer New Space, Space 2.0. Pioneering companies are emerging in sectors as diverse as communications satellites, Earth observation by satellite imagery, and in-space manufacturing.
Once the prerogative of national governments, space has indeed tipped into the private sector with the creation of numerous innovative start-ups and an acceleration in IPOs around the world. This radical transformation in the space ecosystem heralds a technological and economic revolution focusing on strategic issues and creating unprecedented investment opportunities.
A Skyrocketing Market
(Image: Greg Rakozy, Unsplash)
This boom is being helped along by reusable space assets and the plummeting cost of access to space. Satellites, once outsized and clunky, are now being replaced by mass-produced nanosatellites whose production costs are as much as one thousand times less than they were.
The 21st Century’s Black Gold
The communications satellite industry is expected to grow by an estimated plus 9.2 percent per year between now and 20271. And the in-space garment industry is expected to grow by an estimated plus 7.5 percent per year between now and 20262.
The other revolution going on is space data, the 21st century’s black gold, with exponential large-scale marketing. Space data is and will continue to be used in all sectors, from communications to precision agriculture, with operators like MAXAR TECHNOLOGIES, whose satellite images are used for mapping ports, airports, and sensitive sites and to aggregate multiple sources to detect changes using artificial intelligence.
Undreamed-of Potential
(Image: NASA, Unsplash)
In the long term, this new private space industry seems to have prodigious potential. Currently valued at some $400 billion3, the space market is expected to swell to $2.7 trillion by 20454, creating a growth driver for the global economy.
We believe that in the long term, exploration and use of the space ecosystem will benefit all of Earth’s inhabitants. It is this conviction of La Financière de l’Echiquier that launched Echiquier Space5 in 2021, the very first investment fund dedicated to space and its ecosystem.
Designing New Worlds
This solution invests in innovative and lasting space operators who are looking for ways to minimize the resources used, leverage the properties of hydrogen as a propulsion source, and adopt policies for managing space debris. Such resource optimization will, we believe, meet humanity’s most pressing challenges, from climate change to biodiversity protection to bridging the digital divide.
Space 2.0 is designing new worlds, and we believe it will help improve living conditions on Earth by constantly pushing the boundaries on our planet.
1 Grand View Research, 2020
2 Research and Markets, 2020
3 PwC, December 2020
4 Bank of America Merrill Lynch, 2020
5 The fund is primarily exposed to the risk of capital loss, equity risk, foreign exchange risk, emerging market risk, and sustainability risk
