Seraphim Space Investment Trust (LSE: SSIT) was the best-performing investment trust in 2025 and is up by a further 10% this year. This is a fantastic turnaround for a company that was struggling to attract much attention until around six months ago.
Seraphim is one of the few investment vehicles to provide private investors with access to early-stage space companies. The space market is worth around $600 billion annually, much of it controlled by governments. Global defence contractors such as Lockheed Martin have a significant foothold, but the universe of pure-play public and private businesses is small.
If you exclude SpaceX – which is aiming for a $1.5 trillion initial public offering (IPO) – the total value of pure-play public and private companies is about $160 billion. That's not a huge figure for a market that's expected to triple in value to $1.8 trillion by 2035, according to a report from consultants McKinsey – the bull case suggests it could be worth $2.3 trillion.
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Enter Seraphim, which is run by a venture capital firm of the same name that focuses solely on space technology. The £342 million trust is tiny by global standards, but it's unique – a fact that has suddenly dawned on investors. The investment trust structure is well-suited to this kind of investment: it provides a permanent pool of capital, so the manager doesn't have to worry about withdrawals and can focus on finding the best investments, while investors have liquidity and don't have to lock up large sums for extended periods.
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Investors should take a second look at Seraphim
The trust launched in 2021 with an oversubscribed IPO, but by mid-2023, it was trading on a discount to net asset value (NAV) of over 70%. However, this has gradually reduced, before flipping to a premium for most of this year. That may partly be due to the hype around the SpaceX IPO (a stock that it does not hold), but also reflects the success of the trust's own portfolio companies.
Last year, its portfolio returned 20%, led by a 25% rise in satellite firm ICEYE, its largest holding. ICEYE, the leading manufacturer and operator of synthetic aperture radar (SAR) satellites, has been contracted to supply Germany's armed forces with space-based reconnaissance data.
Seraphim owns just over 5% of ICEYE, which is now valued at $3 billion and is targeting revenue of more than €1 billion this year, up from €250 million last year. If the valuation grows at anywhere near the same rate, Seraphim's holding could be worth more than £500 million within 12 months. As a bull-case comparator, SpaceX is targeting an IPO at 100 times sales. If ICEYE can achieve a valuation anywhere near this level, Seraphim's holding could be worth billions, catapulting the trust into the FTSE 100.
ICEYE gained most attention last year, but Seraphim's largest gain in percentage terms came from communications platform All.Space, which nearly doubled its value. All.Space has announced a partnership with Aalyria, a space communications spin-out from Google, and secured funding from the European Space Agency's Navigation Innovation and Support Programme to develop navigation that works when GPS is jammed. Geolocation firm Hawkeye 360 also performed well, with its value jumping 65% after it launched its fifth satellite cluster and completed a $150 million funding round.
For most of its life, Seraphim has rightly been viewed as a high-risk vehicle with limited visibility into future growth. However, developments across the portfolio last year suggest its key holdings have reached a level of maturity that's removed much of the initial risk associated with early-stage start-ups. Investors who have overlooked the trust in the past might want to give it a second look. The portfolio is only just getting ready to take off.
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