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Launched on 31 May 2021, Echiquier Space is the first thematic fund in Europe dedicated to space and its ecosystem.
Interview mit Rolando Grandi, CFA, Fund Manager
Why did you launch Echiquier Space in 2021?
Our international thematic equity team identified this structural trend three years ago. The field has deepened since then, and the ecosystem has reached a turning point in 2021. Once the exclusive domain of government, space has tipped into the entrepreneurial sphere – Space 2.0. The next generation of space-based companies has matured, and their IPOs are coming in fast. With disruptive technology and the falling costs of sending assets into orbit, space is getting more accessible, encouraging the boom in space industries and creating unprecedented opportunities. The potential is dizzying: the market, currently at $400 billion, is expected to hit $2.7 trillion by 2045 . All sectors should benefit from this revolution, from communications to navigation to insurance to precision agriculture.
What are the fund’s specifics?
Echiquier Space’s positioning is international all along the space ecosystem’s value chain, and the portfolio is concentrated on some thirty stocks. From a universe of near 170 stocks today , and growing steadily, we are selecting four company profiles that use, develop or benefit from space technology. These include companies that deploy their operations from space, such as the Earth observation industry. Some of these companies are the link between Earth and space. They send space assets into orbit, the cost of which has dropped significantly over the past 20 years. In addition, we identify companies that enable or benefit from space development on Earth, as well as those that manufacture rockets and satellites or develop applications using space data. This describes JOHN DEERE , which uses those data in service of precision agriculture. Lastly, we invest in connected technology, which is indispensable to the space revolution, such as the cloud, semi-conductors and 3D printing. Take for example VELO3D, a disruptive producer of printing additives. They are experts in creating complete rocket engines, like the ones used by SPACEX.
When you’re a pioneer, you’re also accountable. Space 2.0 has fully embraced sustainability issues, and the new entrepreneurs are helping to foster a sustainable space industry. This responsible revolution is our chance to focus on the most ambitious and advanced players in this approach. For us, responsibility is crucial and is included in the fund’s design. That is why, together with our Responsible Investing Research team, we have developed an ESG Charter specific to space issues, which includes sectoral and normative exclusions. ESG analysis of the securities is also used to weigh their commitment on issues as major as managing space debris and the climate impact .
What are the real-world applications of Space 2.0? The space ecosystem revolution is generating immense opportunities on Earth as well as in orbit. Of the UN’s 50 indicators for tracking climate change, 26 are supplied by satellite imaging. PLANET and its fleet of nano-satellites are mapping the Earth to track changing coastlines or deforestation in real time. Space 2.0 is also furthering the general optimisation of satellite communications systems and the transfer of space data. For example, using laser communications between satellites, German company MYNARIC is accelerating and securing exchanges between space assets. Space exploration is also benefiting research. Experiments conducted in orbit are studying the impacts of microgravity on cells or on artificial organs obtained by 3D printing.
The space revolution is emerging at a pivotal moment. We are convinced that over the long term, the need to use the space ecosystem will make it possible to support the viable development of the human species. While this economic opportunity is part of a long-term process with a multi-generational outlook, this revolution’s premises are already offering up enormous investment opportunities with as-yet untapped potential. Let the space odyssey begin!