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28 Oct 2022 11:37
London, UK, 28 October 2022
Edison issues update on Seraphim Space Investment Trust (SSIT)
Despite the equity market volatility seen in 2022, Seraphim Space Investment Trust (SSIT) has delivered modestly positive NAV growth since initial trading in July 2021 to the end of its financial year in June 2022. In aggregate, the portfolio's unlisted holdings saw positive revaluations over the period, while the listed holdings fared poorly. The fund's 80% exposure to non-sterling assets was a significant contributor to returns. Cash reserves equated to 24% of NAV at the year end and the company believes they are sufficient to support existing portfolio companies, which are all well capitalised through to at least June 2023 on average having collectively raised over $1bn in the last 12 months. In the near term, the primary focus is likely to be on ensuring suitable levels of finance within the portfolio with selective and relatively modest additions of new holdings. In our last update on SSIT, Derating offers an attractive entry point, we made the case for the company's role in addressing formidable world challenges such as climate change and defence, which accounted for more than 90% of portfolio revenues at 30 June. If possible, the application of such technology has come into ever sharper focus in recent months, validating the relevance of and potential within SSIT's portfolio.
For the contrarian investor, for those comfortable with risk, or for investors with a truly diversified portfolio and a suitably long-term investment horizon, SSIT continues to offer a unique opportunity to access tomorrow's potential space tech winners in what will surely be a multi-generational secular growth theme. The fund manager, Seraphim Space, has a demonstrable track record of investing in early-stage companies and has added to its already deep strength and depth of investment capability over the year. The full year results provide a natural opportunity to review the company's performance. Results have been mixed with share price weakness the overriding experience for investors. While this is disappointing, there are positives, which we feel should assuage long-term investor concerns. SSIT has demonstrated that its underlying operational performance is progressing, with material cash balances allowing the manager the luxury of patience with its holdings.
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