Space: the next frontier for investing
Paypal’s Elon Musk, Microsoft’s Paul Allen and Charles Simonyi, Amazon’s Jeff Bezos and Richard Branson – all billionaires associated with investments 62 miles beyond Earth in space. But space is now on the radar of institutional investors and is being pitted as the next great innovation economy.
There are now some 350 companies worldwide that operate in the NewSpace industry. The largest sub-sectors are those of satellites and launch vehicles but new industries are emerging.
This year start-up Planetary Resources launched with plans to mine asteroids. Microgravity Research firms are also looking to space for cures for diseases such as osteoporosis and cancer. Richard David is co-founder and CEO of NewSpace Global (NSG), which delivers information on investing in the commercialization of space as well as indices of companies that operate in space. He says around 75% of companies are privately held although more are turning to the public markets such as SpaceX which is planning to IPO.
Using a proprietary algorithm, NSG Analysts track the top 100 privately held NewSpace companies in the NSG 100 index. Last year’s top five highest NSG 100 companies produced 41%, 31% and high 20s score changes, while the worst performers lost as much as 16%. "In every hi-tech sector there is volatility, but over the next five to 10 years significant wealth will be created in the NewSpace industry. The key for investors is to make sure they are very informed and invest in companies which have a viable product that will have value to customers – not merely an impressive gimmick."