Seraphim Space (SSIT ) shares enjoyed a rare reprieve today as the investor in space commercialisation ruled out any impact on its net asset value (NAV) from the crisis surrounding Silicon Valley Bank.

Although eight of Seraphim’s 24 portolio companies used SVB as their main bank, the investment trust said in a statement that it did not ‘anticipate that the recent SVB events will have any impact on the company’s NAV’.

Two days after other investment companies distanced themselves from the collapsed tech company lender, Seraphim confirmed that SSIT did not bank with SVB, nor its fund manager, Seraphim Space Manager LLP.

In a falling market, Seraphim shares firmed a penny to gain 2.2% to 43.5p.

Launched at the top of the market in the summer of 2021, Seraphim shares have been battered in the selloff of growth investments. Its £216m portfolio of interesting but speculative satellite-based businesses has been the last thing most investors have wanted as markets have roiled at surging inflation and interest rates.

After this morning’s modest rise, the shares are still well below half their 100p launch value in July 2021. They also languish on a huge 52% discount to NAV that reduces the closed-end fund’s market value to £104m. 

Last week after Seraphim published half-year results to 31 December, fund manager Mark Boggett agreed the investment trust was ‘muddling through’ the difficult market environment.

The intense pressure on NAV relented somewhat with a 7.2% decline in the second half of the year largely caused by share price falls in Seraphim’s few listed investments and currency movements, rather than writedowns in the mostly unquoted, dollar-denominated portfolio.

However, the stock slid 15% in the six-month period as investors feared Seraphim would be unable to support its companies while its shares traded on a steep discount, preventing share issuance to raise new funds.

Serpahim said it had £41m, or 18% of NAV, in cash to invest in its companies. It said almost half the portfolio raised money over the half year and all but two companies had secured enough cash to last until next year.

On average Seraphim said its companies grew revenues by 56% over the second half of the year, driven by demand for their expertise in defence, global security and climate change.

‘The evidence is mounting that the area we’re focused on is robust,’ said Boggett (below). ‘The discount that’s applied to our NAV really suggests armageddon in terms of the future valuations of our portfolio and a limited ability to attract additional financing for these high capital companies. That is just not what is happening in the market.’ 

Satellite company All.Space and Satellite Vu, which aims to monitor the temperature of any building on the planet to determine valuable insights into economic activity, energy efficiency and carbon footprint, are currently fundraising and are expected to close the investment they require over the next quarter.

The $76m funding round in February achieved by Japanese company Astroscale was testament to investor demand, Boggett said, given it is the market leader in removing debris from space, a ‘market that is yet to really exist’, the manager said, and ‘as spacey as it gets’.

Seraphim’s largest position at 19.6% of total assets is Iceye. Using satellites, the Finnish company monitors and detects changes in small patches of land across the globe day and night. In August the Ukraine government signed the company up to monitor Russian troop activity.

In the half year, Seraphim evenly invested £4.2m across two new companies, including Israeli agriculture-focused company Taranis, which uses earth observation data to optimise crop yields and increase global food supply.

It also invested in Voyager, which is developing Starlab, a ‘free’ flying space station. The project will provide the facilities for astronauts from NASA and global space agencies to support research and manufacturing in space. Projects include failed pharmaceutical projects on earth that may benefit from a zero-gravity environment.

Seraphim also made six follow-on investments totalling £9m over the period, including space taxi company D-Orbit and data firm PlanetWatchers.