The boss of the world’s first listed space-focused investment trust says European governments are “desperate” to access space technologies to reduce their reliance on the United States for defence.
Mark Boggett, chief executive of Seraphim Space Investment Trust, said the rapid increase in European defence spending had been a massive tailwind for the trust’s portfolio. Seraphim’s top ten portfolio companies achieved revenue growth of 80 per cent in the past year. “All of that is driven by defence euros,” he said.
“Europe has driven a coach and horses through its traditional procurement processes for acquiring defence-related capability,” Boggett said. “They’ve been in a desperate rush to access the space-related capability that they need because they know that they can’t rely on the US any more. This is the reason why so many of our portfolio companies have witnessed this massive growth in revenues, because these defence euros are now starting to flow.”
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Boggett pointed to the Re-arm Europe plan, launched in March last year, which aims to mobilise over €800 billion by the end of the decade. It followed President Trump’s decision to suspend US military support for Ukraine in February 2025, including intelligence sharing.
Trump’s decision revealed to European governments the extent of their reliance on American technology, including the use of satellites to detect Russian bomber launches and to guide precision-guided weapons.
“There was a rapid realisation that Europe and the UK don’t have anything in this area, because they’ve exclusively relied on the US. So when it switched off, it became really acute that you actually need this capability to manage the theatre of war,” Boggett said.
ICeye, a Finnish company recently valued at $2.8 billion and Seraphim’s largest holding, has been one of the principal beneficiaries. The company operates satellites that can be used in climate monitoring and insurance as well as defence and intelligence.
The satellite operator ICeye is Seraphim’s largest holding
Governments in Denmark, Finland, Poland, Germany, Portugal and Switzerland have chosen ICeye to develop their own satellite network in the past year. Revenue at ICeye more than doubled to about $250 million last year, and the company reported a contracted backlog of $1.5 billion, which it said reflected “sustained sovereign intelligence demand”.
Boggett said that many of the fund’s holdings were “defence companies by accident”, having initially focused on commercial use before repositioning to take advantage of the demand for sovereign space capabilities.
This momentum has been highly supportive of the fund’s market position. After years of trading at a persistent discount to its net asset value, the trust transitioned into a premium this year, which rose to 34 per cent in April. Its share price has gained 83 per cent so far this year, cementing its place as one of the top-performing stocks on the FTSE All-Share Index.
Looking beyond defence, Boggett said the space sector more broadly was at an “inflection point” thanks to the significant reduction in launch costs and growing recognition of its potential to support a wide range of sectors.
Space X’s development of Falcon 9 reusable rockets has helped cut launch costs by 95 per cent over the past decade, according to McKinsey. Boggett said that Space X’s new rocket, Starship, could help bring down costs to a tenth of that price and support the launch of much larger structures. “That could potentially start to open up the ability to build mega structures in the space environment,” he said, pointing to data centres, solar farms, communication towers and even manufacturing plants.
A Falcon 9 rocket launch seen from the Sea of CortezMichael Nolan/robert harding/Getty images
“Defence accounts for 80 per cent of revenues across our portfolio, but in five years time, it will have flipped back to being only 20 per cent because the rest will come from the commercial customers across these sectors,” Boggett said.
It may seem like science fiction, but investors are interested. Last week Seraphim raised £137 million in the first tranche of its C share issue, including £45 million from retail investors. This was the largest fundraise for a listed investment trust since 2023, and the largest UK retail capital raise in more than five years.
Interest in space investment is also only likely to grow as Space X’s potentially record-breaking initial public offering approaches. Boggett said the listing, potentially valuing the business at as much as $2 trillion, would be a “game changing event” for the sector. He estimated that Space X accounted for a “maximum” of 20 per cent of the space market opportunity, leaving plenty of opportunity for investors to find value elsewhere.
“There’s going to be a massive wall of money that’s going to be seeking space-related opportunities [after the IPO] from these investors that are effectively trying to recycle into the same thematic area that they’ve succeeded in already,” he said.