Baillie Gifford's Schiehallion Trust boosts Spacex valuation by 86%, narrows asset gap

Baillie Gifford's Schiehallion trust increased the value of its holdings in Elon Musk's Spacex by 86 per cent last year, as it aimed to narrow the gap between its share price and underlying assets.

The valuation of Spacex, which constitutes 9.4 per cent of Schiehallion's portfolio, has surged by over 600 per cent since the trust first invested in 2019, as reported by City AM.

Schiehallion holds stakes in half of the world's ten largest private companies, including Spacex (the world's largest private company), Tiktok owner Bytedance, Stripe, Databricks and Chime.

In its annual results, the trust disclosed that its share price rose 51 per cent in the year to 31 January, while its underlying asset value grew 12.9 per cent. This reduced its share price discount to underlying assets from 39.6 per cent to 19.2 per cent.

However, since its launch in 2019, the trust's share price has only risen eight per cent, despite a more than 34 per cent increase in the value of its underlying assets.

Reports surfaced in November that a tender offer had valued Spacex at $250bn (£200bn) for outside investors, sparking investor interest in the private company.

Analysts estimated that Baillie Gifford's trusts had raised the valuation of their Spacex holdings by between 40-45 per cent due to the tender offer alone and had sold some of their shares in the process.

The trust announced today: "During the final quarter of 2024 we also trimmed our position in SpaceX for portfolio management reasons, but we retain strong conviction in the company's upside potential from here."

Over the past year, Schiehallion has sold $5.4m worth of shares in the company, while maintaining a stake worth $128.8m.

Earlier this month, it was revealed by City AM that Baillie Gifford and its investment trusts had reduced their stake in Tesla, which is also headed by SpaceX CEO Musk.

The Edinburgh-based investment manager first invested in Musk's electric car company in 2013, but stated that it had now cut its stake to just 0.06 per cent of the company's shares.

Other high performers in Schiehallion's portfolio over the past year, apart from SpaceX, included its second largest holding, Italian tech firm Bending Spoons, which saw an 89 per cent increase, while TikTok owner Bytedance grew by 33 per cent.

Throughout the year, the trust made six new investments, including Runway AI, a generative-AI video firm, and Tenstorrent, a semiconductor design company.

However, one of the trust's investments, Swedish electric vehicle battery maker Northvolt, went bankrupt during the year due to increased competition from China, while others experienced significant drops in valuation.