Scottish Mortgage Investment Trust defended its $1.25tn valuation of SpaceX ahead of its anticipated blockbuster IPO, despite Elon Musk’s $1.75tn valuation target. The UK’s most popular investment trust, managed by Baillie Gifford, emphasized its £3bn SpaceX holding represents 19% of its portfolio, citing “verifiable transactions” over speculative reports. The trust, which first invested in SpaceX eight years ago, clarified its valuation process after shareholder queries surged ahead of the IPO.

SpaceX’s IPO, potentially timed to Musk’s 55th birthday and a rare planetary alignment in June, has driven Scottish Mortgage’s private asset exposure to 41.5%, exceeding its 30% limit. The trust’s £16bn portfolio grew from £200mn invested in SpaceX by 2021, with no new investments in five years. Analysts note this concentration reflects SpaceX’s meteoric rise, now deemed “infrastructure for the global economy” by manager Tom Slater.

The trust’s private asset strategy faces scrutiny, with former director Amar Bhidé departing in 2020 over governance concerns. Shareholders recently approved £250mn in additional private investments, acknowledging SpaceX’s role in offsetting earlier risks. Investec’s Alan Brierley highlighted SpaceX’s impact on the trust’s recovery, though he warned heavy private exposure complicates liquidity during market stress.

This IPO could reshape Scottish Mortgage’s trajectory, balancing its high-growth bets with regulatory pressures. As SpaceX prepares audited financials for its prospectus, the trust’s valuation hinges on transparency, potentially easing investor nerves about its opaque private holdings.