Experts weigh in on what SpaceX reveals about the private market gap for pensions
One of Canada’s Maple Eight pensions - Ontario Teachers' Pension Plan - invested roughly $220 million in SpaceX in 2019. That position is now worth billions after SpaceX’s IPO on June 12.
While Ontario Teachers' declined to comment, Carmen Staltari, managing director of investments at WTW, takes a measured view of how these bets land in pension portfolios. For most institutional clients, “it’s less a bet on the individual company but more on the private equity manager's skill to source the company and add value to that company over its ownership,” he said in a statement.
“When investing in private equity, and this includes venture capital, more times than not, you are investing in a blind pool fund which in turns invests in private companies,” he added.
Price entry is core appeal
The core appeal for institutional investors, according to Frank Burke, CIO of PPB Capital Partners, is price entry.
"Once a company goes public, it's so hard to get the IPO allocations,” said Burke. “From that point you just don't know what's going to happen. You got to get in early and really get that value bump while the companies are still private,” said Burke, noting lockup periods add another layer of risk, with insider selling creating volatility around those dates.
“You gotta pick the right winners early on and then stay with them. Establishing which ones have the right moats, to me is critical and I do think SpaceX fits that description just given the unique nature of their business,” he added.
Yet, according to Staltari, pension funds investing through blind pool structures aren't picking SpaceX directly. Rather, they're betting on the manager who found it.
"Given success of certain deals, the fund might end up being overweight to certain winners," he said.
Igor Pejic, an indpendent tech investing strategist and author, believes pension funds are uniquely positioned for this kind of strategy because they have the capital to diversify, the long-term investment horizon to ride out failures and the liquidity profile to wait for explosive growth curves. But he also acknowledged a sharp distinction between the opportunity that existed in 2019 and the one investors face today. Back then, SpaceX had a clear commercial path built around reusable rockets, government contracts and satellite internet. The merger with xAI, he argues, has changed the calculus entirely.
According to Pejic, that distinction matters for how pension funds should read the current IPO cycle.
"Given such a steep trajectory and a meaningful initial allocation, a winning bet like SpaceX necessarily becomes a risk management problem at some point because its success leads to heavy concentrations," said Pejic in a statement. "Like every private and institutional investor, pension funds then need to determine what volatility this asset [today] introduces into the portfolio and whether to trim it down and rebalance. At least after the IPO, immediate liquidity is a given."
SpaceX remains unprofitable
Despite a valuation far beyond what a typical venture investment commands, Burke acknowledged the company remains unprofitable, placing it in the early stages of its corporate life cycle regardless of how large it has grown in market capitalization.
"From the standpoint of how this should be included in portfolios, it's the same way you're investing in your riskiest assets," he said. "It's a speculative investment. There's no question about that. When there is no profitability yet and you're paying top dollar, valuation wise, to get access to it, you're just betting on a long-term growth stream.”
Still, according to Burke, SpaceX has become the largest position in the University of North Carolina's endowment, with some calling it a generational event for the institution. The key to landing that kind of exposure, he argues, comes down to partnering with the right venture funds rather than trying to approach companies directly and secure a place on their cap table, something he says is unrealistic for most allocators.
Relationships are key for allocation decisions
Co-investment opportunities are central to how these positions get built, he said, noting investors lean on the research and conviction of their fund managers, and that relationship is what drives allocation decisions.
Ontario Teachers' had the capital base to make an aggressive $220 million play in 2019, but the decision was also backed by the calibre of the venture capital ecosystem around SpaceX - including Musk's track record, his early PayPal-era connections and the involvement of top-tier VC firms like Founders Fund. He believes that institutional-grade backing gave allocators a level of comfort in sizing up a large speculative position.
SpaceX IPO highlights the case for private market exposure
Anthony Spagnolo, client relationship director at Baillie Gifford, sees the SpaceX IPO as a symptom of a much larger structural shift in capital markets. He emphasized in a statement that companies are staying private for longer, and a larger portion of their value creation is happening before they ever reach public investors.
A listing, in his view, doesn't change the fundamentals of a business. If the investment case holds, long-term investors can continue to benefit from growth well after a company goes public. The goal is to identify strong businesses early and stay through multiple stages of development, rather than treat an IPO as an exit signal.
“A key distinction is that private companies get to choose their investors. Companies like SpaceX are highly selective about who appears on their cap table. They're looking for investors who can support the business over many years and don't view an IPO as the end of the investment journey. The most attractive companies want shareholders who are prepared to remain invested long after a public listing,” said Spagnolo in a statement.
Burke believes the company straddles two major investment theses at once. Its Starlink satellite network is profitable, but the AI side of the business - bolstered by the xAI acquisition - is weighing on the bottom line. Investors are pricing in what AI monetization could mean down the road, and Burke notes that dynamic extends across the private tech landscape.
Will SpaceX’s IPO acclaim last?
Still, the IPO pipeline may soon test these dynamics as OpenAI and Anthropic are expected to go public later this year and Burke sees a broader opening for the private markets exit cycle. Their listings, combined with SpaceX, could "spark, I think a much more robust exit cycle for private investments over really the next few years here," he said.
"The OTTP model strengths are large in-house teams, direct investing to reduce fees and gain influence, and patient capital," said Pejic. "It's important to stress that the bet when SpaceX was still in the private markets and before the xAI happened, was a completely different one than today. The lesson of this success is not that pension funds should engage in glitzy AI companies whose valuations rely primarily on narrative, on the contrary. OpenAI and Antropic are much more like SpaceX today rather than SpaceX in 2019."
Beyond SpaceX itself, Burke sees a broader case for private market exposure, noting the public company universe continues to shrink, and private fund managers retain the ability to drive operational improvements, change management teams and push companies toward the next stage of growth.
Still, Spagnolo sees the implications extending well beyond any single listing.
"We often talk about an illiquidity premium in private markets, but there may be an access premium too," he said, noting how getting into a small number of exceptional companies before they become widely available is the real challenge for institutional investors. But he believes the firms that can do it consistently hold a meaningful edge.
"The broader lesson from successful investments such as SpaceX is that investors need to adapt to where value creation is occurring," he said. "For long-term asset owners, the distinction between public and private markets is becoming less important."
