The RSMR Broadcast - The sky's the limit.....or is it?

17/08/21

The RSMR Broadcast - The sky's the limit.....or is it?

There's no shortage of knowledge and expertise at RSMR! Every fortnight we get our heads together and talk about events in the world and how investments are affected by them. Our Broadcast tackles a wide range of issues facing investors from green gilts to the legislation of tech giants and unregulated investments to the changing face of infrastructure investing. We like to think of it as cracking content for the financial adviser. Have a read & get clued up...

 

The battle for space supremacy goes astronomical as billionaires Elon Musk, Richard Branson and Jeff Bezos fight for the master of the universe trophy. What areas are they pouring money into and what’s the intergalactic dream?  

Elon Musk is focussed primarily on logistics, helping NASA transport astronauts to the International Space Station. He’s also working on putting satellites into space. Richard Branson is locked onto a galactic tourism goal to reduce flight times to wider parts of the world by travelling through the atmosphere. And Jeff Bezos is competing with Elon Musk in the space transportation game and has locked horns with Richard Branson in the physical race to space.

So, where’s the finish line? Most of the world class the cosmic boundary as the Karman line; ‘an imaginary boundary’ that's 62 miles up, or roughly a hundred kms above sea level. In the US though, the distance from Earth to space is defined as being lower; 50 miles (80 kms) is classed as the distance to the true edge of space. Richard Branson hit the US finish line in his rocket-propelled vessel, but Jeff Bezos pipped him to the Karman post in his ship, New Shepard, reaching the dizzy heights of 100 kms up. Both Bezos and Branson are looking to vastly expand the number of people in space; companies such as Virgin Galactic and Space Adventures want to make space travel and tourism more accessible and with people already buying tickets to space for a mere $450,000, the demand is as tangible as it is shocking.

It’s a pricey business and not surprisingly, all three billionaires are working on the development of reusable rockets and planes to reduce the cost of getting into space. SpaceX, formed by Elon Musk to revolutionise the aerospace industry and make spaceflight an affordable reality, has managed to lower costs by building a rocket that is reusable, with one stage lowering itself back on to a landing craft after every outing.

SpaceX is also building up a full satellite network called Starlink, consisting of several thousand mini satellites orbiting the Earth, providing super-high speed internet access to the world. It’s estimated that around 70 percent of households in low-income countries are not currently reached by fixed broadband and the ones that are often have issues with patchy service. Low-earth orbit satellites provide faster broadband as they beam their signals with lower latency. Like a super-charged version of the original internet brainwave back in 1990, this development could reshape the world, making the globe a smaller and more productive place.

Elon Musk has taken the lead in constellations of small satellites, he already has 1,400 satellites providing broadband internet access in places where connectivity is scarce, but Bezos is hot on his heels, and they’re not the only ones wanting a slice of the pie. The UK government saved OneWeb from bankruptcy last year - as a global broadband satellite communications company with plans to launch 648 internet satellites into low-earth orbit, they’re now hot news, and have since secured a $550m investment from Eutelsat, a leading satellite operator.

With Musk and Bezos looking at space development through a logistics lens, SpaceX has won a $2 billion contract with NASA to transport astronauts and satellites to space, which is also helping to fund the Mars movement. Do you fancy a trip to Mars? Space hotels are an idea that’s being floated. Is this just the pipe dream of science fiction fanatics or will this wacky idea replace the Costa del Sol as the Brits’ favourite holiday destination?

And what about the resources that we’re going to need in our quest for net zero? Space is a treasure trove of precious metal in the form of asteroids. The electrification of the world could rest on our ability to mine asteroids in space, potentially making them the next big focus for the billionaire space invaders.   

So, how can you invest in space? Virgin Galactic became a listed vehicle in the US after a merger with a SPAC (Special Purpose Acquisition Company). SpaceX has been privately held by Elon Musk since it began, but investors are able to access the company via established investment trusts. Seraphim Space trust is a newly listed UK investment trust, offering investors exposure to private companies operating in space technology.

Seraphim are targeting an annual return of 20% over the long-term on their investments; the companies they back are sector leaders with pedigrees that have first-mover advantages in areas such as climate, communications, mobility and cyber security. Some will no doubt be successful, and some won’t. It’s a young, fast-growing, exciting market with astronomical potential, fraught with risk, but investment in space could well take you to infinity and beyond!

 

Click here to access the latest RSMR podcasts

 
QUIZ QUESTION: How much does Elon Musk make a day?
LAST WEEK'S ANSWER: Asian Flu was a category 2 flu pandemic outbreak of avian influenza that originated in China in early 1956 lasting until 1958.
 
This information is for UK Professional Advisers only and should not be given to retail clients.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

Rayner Spencer Mills Research Limited is a limited company registered in England and Wales under Company Registration Number 5227656. Registered office: Number 20, Ryefield Business Park, Belton Road, Silsden, BD20 0EE. RSMR is a registered trademark. 


Share this article