Multi-asset space race. Billionaires are rocketing into the stratosphere
The big money is propelling the space tech firms. Here is how they are likely to be part of multi-asset trading soon
Whether your brokerage is either interested or willing to embrace the very necessary multi-asset trading environment that is required in order to future proof the electronic trading industry’s retail sector is a matter of choice and ability.
Whether the assets that are required as an integral part of tomorrow’s trading environment should be listed or over the counter, or should be spot currency pairs or corporate equities is also a subject for boardroom debate as the need to evolve has become apparent to every entity from London to Limassol and from New York to Nanjing.
There has been substantial encouragement by some of the more avantgarde trading platform development companies toward a very much needed in-house infrastructure model, emulating the large, well established firms with thousands of asset classes, however this week’s target for massive influx of investment is other worldly. Literally.
With pioneers (or lunatics!) such as Elon Musk with his much vaunted SpaceX company (an acronym for Space Exploration Technologies) and various high budget initiatives from Google, space technology has garnered tremendous interest recently from investors wishing to increase the scope of their portfolio.
Even UBS, one of the most conservative financial institutions in the world and a Tier 1 FX dealer with significant market share, has begun to take this method of investment very seriously.
Low earth orbit internet satellites, which in due course will make high speed internet available anywhere on the planet, are an example of a technology which is going to see a boom, according to UBS. The bank also notes that America’s NASA has been tasked with returning to the moon by 2024, and this will require ‘significant government investment and spending.’
It is expected by market analysts in North America that a significant proportion of this money will find its way to private companies providing the technology required to make it happen, however this is far from straightforward at this point. The issue is that much of this work and investment is being done in the private arena, by unlisted companies.
Currently it is not possible to buy large blocks of shares in SpaceX, or Amazon founder Jeff Bezos’ Blue Origin, however it is very likely that it may well be in future.
Currently, the ways to move broadly into this area for retail investors include buying into listed aerospace or satellite maker stocks, investing in technology funds that target these areas, or a snapping up shares in a private equity investment trust that has these sort of companies within its portfolio. This could easily be made available on any multi-asset retail trading platform, espcecially considering that nowadays there are firms such as CQG that can give even MetaTrader users access to listed derivatives on the same platform as their OTC accounts.
There are not any dedicated ‘space race’ funds yet available to retail investors, however that is very likely to change very soon. There are already plenty of funds targeting particular global trends, such as AI or the rise of robotics, so space and rocket technology funds look likely to appear especially given the massive bottomless pit budgets that governments and innovators are now committing to it.
In terms of seed funding, for example, it is very difficult to obtain large investments for machine learning or AI projects that were once the absolute darling of major consultancies whose think tanks deemed AI to be vital for the efficiency of large companies, which is a very valid application of technology in existing business sectors, however it is very easy to obtain tens of millions from private investors to try to get a lunar excursion module onto the moon, as per the ill-fated SpaceX mission from Cape Canaveral recently in which Israeli philanthropist and businessman Morris Kahn took the lead in completing the mission by funding $40 million of the project, and a further $90 million was committed from other private sources, and all now lost.
This level of spend would surely spur technology firms into action, hence they are likely to be the ones which will garner investment from funds and traders.
The issue with such funds would be the same as with AI and other specialisms. Namely, how effectively does the fund provide exposure to the rise of the technology in question. Either way, it is a definite investment trend at the moment for large private equity magnates, and is therefore likely to be part of multi asset portfolios soon.