Update on Echiquier Space
The 21st century will be the century in which we conquer space. A pioneering fund, Echiquier Space is part of the greatest economic revolution of our time. Over the past decade, visionary entrepreneurs and disruptive start-ups looking to make space accessible have made the sector more dynamic. Pursuing the dual goal of exploring space and improving life here on Earth, Space 2.0 has reached the point of no return. This launch into the future is made possible by multiple types of technology and innovation that are criss-crossing the space sector, creating a flourishing ecosystem on which we are focusing our investments, all over the world.
The space odyssey is transforming the space ecosystem, a market that could be worth $2.7 trillion by 2025. That’s why the fund targets four company profiles – to capture the ecosystem’s value creation: companies deploying their activities in orbit, like Earth observation and manufacturing items in microgravity; businesses operating between Earth and Space, like satellite communications providers and rocket manufacturers; companies working on Earth by widely adopting space technology to create lasting competitive advantages, for example in agriculture or renewable energy. Lastly, we’re investing in cross-technology that fosters the sector’s technological development, including 3D printing, cybersecurity and Artificial Intelligence. In an investment universe with more than 170 stocks, we are building a focused portfolio of about thirty convictions, with the aim of investing long-term in what we consider to be one of this century’s most important themes.
In spite of a challenging 2022 for growth stocks, the space theme remains exciting. The fine start to 2023 contrasts with last year’s difficult environment. Inflation fears leave room for debate over the recession, which our companies are less sensitive to because they’re positioned on structural trends in our economy. In our view, company valuations are becoming attractive. For example, Maxar, a leader in satellite manufacturing and Earth observation, has received a buyout offer from private equity fund Advent International. The +130% premium announced in December has been good for the fund but does not seem unreasonable, when it values Maxar at about 13 times EBITDA, a slight discount compared to the aerospace sector.
During the past few months, we’ve focused our investments in next-generation communications satellite projects. The technological advances will make it possible to directly connect smartphones and other devices to satellites. With this in mind, IRIDUM has forged a strategic partnership with Qualcomm. Meanwhile AST Space Mobile, which launched its test satellite in 2022, says it will be starting its first connectivity tests soon. The projects are proliferating, and Europe is getting set to launch its satellite constellation with the Iris² programme, which addresses a sovereignty issue. So we have invested in European front-runners like Eutelsat in France and Ses in Luxembourg – companies that are transforming themselves with these next-generation satellites launched in low or middle orbit.
Rolando Grandi, CFA, Fund Manager of Echiquier Space
 Bank of America Merrill Lynch, 2020
Disclaimers: The Fund is mostly invested in equities and is primarily exposed to the risk of capital loss, equity risk, currency risk, emerging market risk and discretionary management risk.
The stocks referred to are given by way of example. Neither their presence in the portfolio nor their performance are guaranteed.
For more information on the characteristics, risks, and costs of these funds, and before making any investment, we invite you to read the regulatory documents available on our website at www.lfde.com.
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