Danish pension fund rejects SpaceX IPO over valuation and governance concerns

A Danish pension fund that previously attracted attention for selling US Treasuries and exiting Tesla has said it will not invest in SpaceX, citing concerns over both valuation and corporate governance.

AkademikerPension, which manages approximately $25 billion in assets, said the company is grossly overvalued and suffers from what it described as significant governance shortcomings.

According to Anders Schelde, chief investment officer of AkademikerPension, governance concerns are the main reason behind the decision.

"The primary reason" for avoiding SpaceX is its "exceptionally poor performance on governance matters," Schelde said in an email to Bloomberg on Friday.

AkademikerPension added that its concerns are shared by other institutional investors.

Valuation concerns add to investment reluctance

The pension fund also questioned the valuation being sought by SpaceX as it prepares for a public listing.

The company is targeting a valuation of at least $1.8 trillion in its initial public offering.

However, AkademikerPension believes such a figure is difficult to justify.

Schelde said the fund would not be able to support an investment in the company based on expected returns.

AkademikerPension "would not be able to justify" participating in the IPO "from an investment-return perspective," Schelde said, as cited in a Bloomberg report.

According to the fund's calculations, SpaceX cannot reasonably exceed a valuation of $1 trillion.

The pension fund argued that investors are being asked to accept unusually low compensation for the risks involved.

Governance structure remains the key issue

Despite its concerns about valuation, AkademikerPension indicated that governance issues alone would be enough to prevent an investment.

Schelde said the fund would still blacklist SpaceX even if the company was offered at a more attractive valuation.

He described the company's governance framework as a "catastrophic governance structure."

According to Schelde, Elon Musk is expected to retain more than 80% of the voting rights while simultaneously holding several key positions within the company.

Schelde noted that Musk is expected to serve as chief executive officer, chief technology officer, and chair of the board.

The concentration of voting power and leadership responsibilities has become a major concern for the pension fund, which believes such a structure weakens accountability and shareholder oversight.

Consistent approach to controversial investments

AkademikerPension has gained attention in recent years for taking public positions on investment decisions linked to governance and political risks.

Last year, the fund sold its stake in Tesla, citing concerns that Musk was in the process of destroying the company's brand and value.

Earlier this year, the pension fund also announced it was selling US Treasuries.

At the time, it said the US government was not a good credit.

While AkademikerPension is relatively small compared with some global pension investors, its investment decisions have regularly drawn attention due to their outspoken rationale.

IPO marketing expected to begin in June

SpaceX is expected to begin formal marketing of its IPO as soon as June 4, with pricing potentially taking place as early as June 11.

The timetable remains subject to change.

AkademikerPension has made clear that it will not participate in the offering under any circumstances.

Goldman Sachs Group Inc., Morgan Stanley, Bank of America Corp., Citigroup Inc., and JPMorgan Chase & Co. are leading the IPO alongside 18 other banks.