00:00Tema has the NASA ETF. That is the Tema Space Innovators ETF. And let's just talk through the holdings because
00:07my understanding was that prior to the IPO you had exposure to SpaceX in the form of an SPV. Now
00:13I take a look at your holdings. It looks like you do have the common shares. So just to set
00:18the scene talk us through what that process looked like converting from the SPV into holding the actual shares themselves.
00:27Thanks for having me on the show. So basically in the space category what we recognized was there were space
00:32ETFs but there was no professionally managed space ETFs and no space ETFs that included SpaceX Direct. So we offered
00:40an opportunity for investors to invest in the space economy with SpaceX exposure before IPO. But actually it was a
00:48small exposure. It's a single digit exposure in the fund and it was consistently held at cost until the
00:55closing of the IPO book the day before the IPO last Thursday. So space for us is still early. Space
01:02is risk. Risk needs to be managed. Active allows us to manage our risk. And not investing in SpaceX if
01:09you're investing in space would seem like you're missing the biggest value creator, capital allocator, and ultimately innovator across the
01:15space economy.
01:16So Katie mentioned that SpaceX, you're now holding the common shares. It makes up about 7% of your portfolio.
01:23Echo Star and Rocket Labs have bigger weightings. Echo Star at about 10% and Rocket Labs at 9.3%.
01:31Why put such heavy weightings in both these two companies?
01:35Yeah. So for example, if you look at what in the Echo Star's case, there's actually it's trading in a
01:39material discount to the NAV. So effectively you're getting prospective SpaceX exposure because the deal has not closed at a
01:47material discount to what the implied NAV would be, especially with the uplift of the SpaceX valuation since the listing
01:53last week.
01:53So again, as if what we are focused on in NASA is not just investing in three companies. We're focusing
01:59on investing across the space economy and deep into the space economy supply chain. So that also includes smaller companies,
02:07for example, Filtronic, which is a small company that has done very well since we listed and is an example
02:13of a smaller company that feeds directly into SpaceX.
02:16SpaceX is a supplier to SpaceX. But again, it's not necessarily a bellwether company that you expect to see in
02:21a space economy ETF. So the whole idea of NASA is not a trading tool for just one or two
02:26companies. It's across the space economy. It's actively risk managed and professionally managed by an experienced investment team. And that
02:33means that we will look at dislocations of valuation. EcoStar, relative to where it's trading to NAV, we think is
02:39an interesting way to get exposure to SpaceX directly post SpaceX IPO.
02:44Let's talk about SpaceX just real quick. So you guys bought the special purpose vehicle. It converted to SpaceX shares
02:52on Friday. Did you get a bump in the NAV when you did that? And then are any of the
03:00shares locked up? Or could you sell all the SpaceX today if you wanted?
03:04I just want to walk through those two things. Great question, Eric. So SpaceX was held at cost until the
03:10IPO.
03:10So that meant basically on the day of the close of the IPO book, it was moved from cost to
03:15$1.35, which was the price that it was IPO'd out on Friday. And since Friday morning, it's traded at
03:20a market price.
03:21So yes, there was a bump to SpaceX specifically on Friday. But as you may be aware, the overall space
03:27economy sold off on Friday as investors allocated from ex-SpaceX to SpaceX.
03:33In terms of the lockup, our SpaceX exposure is exposed to the same lockup as all pre-IPO investors, which
03:40in the case of SpaceX is quite unique, as in there's an accelerated lockup, which depends on share price performance.
03:46And the first unlock will come as early as day 60, depending on share price performance. So we are subject
03:52to the S1 lockup. And that's why it's also been intentionally a risk-managed exposure far below the 15%
03:57threshold.
03:58And we've continued to buy until the S1 was published. And post-S1, we were not able to purchase until
04:04the IPO now.
04:05Well, really appreciate that context there. And I do just want to talk more broadly about the competitive landscape when
04:11it comes to SpaceX ETFs and space-themed ETFs.
04:15We were just having this conversation with Sylvia Jablonski. Eric, you know, used the sort of idea that there's a
04:22spectrum from being able to buy an island to maybe starving to death.
04:26And I just want to talk about how you're feeling that competition as the CEO of an asset manager who
04:31is competing in this space.
04:33I mean, what does the pressure feel like for this specific company, for this specific theme versus maybe other areas
04:40that you've been involved in?
04:42Yeah, I think there's three things I would say. I think the ETF space has never been more competitive.
04:47We at Temer are an investment firm focusing on three things, product, process, performance, not on marketing.
04:54I think specifically in space, I think while it's true that first-mover advantage is really important in ETFs, what
05:00we showed with NASA is product quality still matters.
05:03And if you can come up with a better quality product that is simple to understand for investors,
05:08you have an ability, even with a 70-year delay, to still outperform first-mover products.
05:13So we're chiefly focused on product quality.
05:16And I think what we demonstrated with NASA is that product quality in specific cases does really matter over and
05:20above first-mover advantage.
05:21Thank you very much.
Comments