Insight alert: Space infrastructure: An emerging asset class

Space related assets are becoming investable for infrastructure investors, but not uniformly and not on conventional terms. 

For experienced infrastructure investors, the immediate opportunity lies less in broad exposure to the space economy but more in assets with infrastructure-like cash flows: ground stations, mission control assets, data-processing facilities and selected dual-use platforms (supported by credible government or enterprise counterparties). 

Traditional infrastructure investors need to be conscious of:

• rapidly advancing technology – including refresh risk in the context of investment horizons; 
• regulatory due diligence – which may include spectrum, orbital rights, export controls, sovereign risks and foreign ownership constraints; and
• revenue bankability – prioritising counterparty quality, procurement durability and risk allocation over market or sector-level growth projections. 

While the broader debate for scaling the space economy through private capital has focused on venture capital and public-private partnerships, infrastructure investors need a narrower lens. The relevant question is not whether the space economy will grow, but which assets can support long-duration, contract-backed, financeable cash flows. 

Ultimately, investment discipline remains familiar: isolate the cashflow asset, test the counterparty quality, price the regulatory and technology risk, and avoid mistaking sector growth for investability.

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