Private investment into space companies in the third quarter of 2020 bounced back after a significant dip in the prior quarter, according to a report Thursday by NYC-based firm Space Capital.
“After the slowest quarter on record for [space infrastructure] investment since 2009, investment in this layer of the stack rebounded in Q3 to pre-COVID levels,” Space Capital managing partner Chad Anderson wrote in the report. “With just three quarters booked, 2020 is already the largest year on record for infrastructure investment with $5.5 billion invested [this year].”
The quarterly Space Capital report divides investment in the industry into three technology layers, with space infrastructure including what many would typically consider to be space companies: Those which build rockets, satellites, spacecraft, space exploration projects and more. The report found that space infrastructure companies brought in $3.6 billion during the third quarter, the largest single quarter of investment on record. More than half that investment came through SpaceX’s about $2 billion raise in August.
An investment freeze due to the coronavirus pandemic was seen as a serious risk by space companies earlier this year. But executives from companies such as Sierra Nevada Corporation, Virgin Galactic, Relativity Space and Virgin Orbit have recently told CNBC about the progress each have made in spite of the pandemic, while companies like Kymeta, ICEYE and Astroscale have successfully closed new fundraising.
The space application and distribution layers also brought in $1.2 billion and $102 million, respectively. That represents slower growth than the previous quarters, when both layers brought in the bulk of this year’s space investment. Despite the slower growth, the distribution layer has seen even the largest U.S. tech companies join in – such as Microsoft’s Azure Orbital satellite service, which seeks to compete with Amazon’s AWS Ground Station service.
“The increased involvement of these tech companies will service as yet another catalyst for growth in this sector,” Anderson wrote. “In the same way that every company today is a technology company, the companies of tomorrow will be space companies.”
NASA doles out over $370 million in space tech awards
Space Capital’s latest quarterly report comes a day after NASA awarded more than $370 million in fixed price contracts to 14 companies to develop various space technologies. Although the NASA contracts technically come in the fourth quarter, and would not be counted under Space Capital’s investment criteria, the awards represent the U.S. space agency’s continued support for a growing field of companies.
The awards were made under NASA’s Tipping Point program, which seeks to fund new technologies. Lockheed Martin, SpaceX, and United Launch Alliance won contracts worth $89.7 million, $53.2 million and $86.2 million, respectively, to conduct demonstrations of new cryogenic fuel transfers and storage. Small rocket builder Rocket Lab will launch a demonstration mission for Eta Space, which won $27 million for a small-scale orbital flight demo of a cryogenic fluid management system. Multiple awards for lunar lander technologies were awarded, including $41.6 million to Intuitive Machines, $10 million to Masten Space Systems, and $5.8 million to Astrobotic.
“Tipping Point is a fantastic program designed to significantly mature a technology for use in commercial space applications. These are not R&D projects that are going to get filed away in a basement and collect dust. These awards give next generation technologies the capital they need to reach their next milestones and get one giant leap closer to commercial use,” Anderson told CNBC.
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Global foreign direct investment halved amid pandemic, but China remained resilient – UN News
FDI includes cross-border mergers and acquisitions, international project finance, and corporate investments in new “greenfield” projects abroad, and it can be an indicator of the growth of the corporate supply chains that play an important role in world trade.
Worse than expected
“This was due to the lockdowns around the world, which slowed existing investment projects, and the prospects for deeper recession which led the multinationals to reassess new projects. And that’s the current mood of the investors – they try to be very conservative at this stage”, he said at a press conference in Geneva.
All major forms of FDI and all regions suffered from the slowdown, although developed economies were worst hit, with FDI flows of $98 billion in the six months – a 75 per cent reduction from a year previously.
China holds course
However, China was bucking the trend, with FDI flows relatively stable at $76 billion in the first half of the year, while Hong Kong bounced back as an FDI destination after a weak 2019.
“Overall investment flows into China remain at a high level and this is partly because China was one of the very few countries, among the first, to control the pandemic and to resume its production system in the country.
“In the meantime the Chinese government put in place effective measures to retain investment, to service operations of the multinationals operating in the country, and also put in place new measures to attract investment”, Mr. Zhan said.
Most of the FDI heading to China went into high-tech industries. The value of Mergers and Acquisitions transactions into China, grew by 84 per cent, mostly in information services and e-commerce industries, while several multinational companies also expanded their investments into China, he added.
Global outlook highly uncertain
The global outlook remains highly uncertain, with question marks over the duration of the pandemic and the effectiveness of the policy response, but prospects for the full year remain in line with UNCTAD’s earlier projection of a 30-40 per cent decline, Mr. Zhan said.
The rate of decline in developing economies is expected to flatten because of the signs of impending recovery in East Asia, but the global decline is expected to continue, with a further reduction of 5-10 per cent foreseen in 2021, the UNCTAD official added.
FDI is the most important source of external funding for developing economies – outstripping remittances, bank loans and overseas development assistance.
The current value of FDI invested in projects around the world is equivalent to 42 per cent of annual global GDP, said Mr. Zhan.
Microsoft announces biggest investment in Taiwan – Anadolu Agency
The US-based Microsoft Corporation has announced its biggest investment in Taiwan amid faltering US-China trade ties.
In a news conference on Monday, Microsoft Taiwan CEO Ken Sun said the company will build a data center in Taiwan, creating over 30,000 jobs with an investment of over $10 billion until 2024, daily Taipei Times reported on Tuesday.
The investment in four digital projects also include research and development of artificial intelligence hardware. It has been the first time in last 31 years that Microsoft announced such a big investment in the island nation.
Taiwan President Tsai Ing-wen said in a tweet: “I am proud to be part of reimagining Taiwan with @Microsoft & welcome their investment. Our collaboration is yet another step forward for the Taiwan-US partnership, as we reimagine supply chains & create business opportunities for a better tomorrow.”
The huge investments come amid weakening US-China relations which have hit the bottom rock. Washington has increased its relations with Taiwan which China claims a “breakaway province”.
Beijing has warned against hobnobbing with Taipei arguing it violates “One China Policy”.
Microsoft said it will also train more than 200,000 “digital talents” to serve its ventures.
“We have been increasing our investment in Taiwan every year for the last five years,” Microsoft Taiwan Corporation General Manager Ken Sun said. “And now we are making the biggest investment in Microsoft’s 30-plus-year history in Taiwan.”
Tsai said Microsoft’s investments came at a “critical time”.
“As the world’s supply chains are rapidly reforming in the wake of COVID-19, this is the most powerful moment for us to take our trade relations with the US to a new level,” Tsai said.
Top US investment consultant selected Diligend solution to automate and digitize investment managers operational due diligence – Canada NewsWire
NEW YORK, Oct. 27, 2020 /CNW/ — Diligend, a leading provider of investment management software, has been selected by FEG Investment Advisors (FEG), an independent investment consulting and OCIO firm, to automate and digitize the collection of manager data and documents in its operational due diligence (ODD) of investment managers across public and private markets and hedge funds.
FEG partnered with Diligend for a robust, flexible, and reliable solution to support their growth and the centralization of their ODD practice in order to provide a more effective and efficient due diligence process.
Diligend specializes in the collection and in-depth analysis of qualitative and quantitative manager data, from initial onboarding to ongoing monitoring for ODD, manager research, ESG and compliance teams. The technology frees up much-needed time by automating and simplifying processes that previously required a heavy manual workload. With Diligend’s technology solution, FEG will be able to efficiently collect and digitize both qualitative and quantitative information and produce ODD reports providing scoring on important operational tenets.
“The flexible nature of Diligend’s platform combined with their ongoing innovation will enable us to more efficiently support our growing client base and their evolving due diligence needs and expectations,” said Douglas Walouke, CFA, Director of Operational Due Diligence at FEG. “Building upon FEG’s historical diligence efforts with our dedicated ODD practice under development, we identified Diligend as the right fit because their technology solutions will not only help streamline our due diligence processes, but will also enable us to perform critical in-depth analysis and improved reporting on our clients’ investment managers.”
Diligend’s platform gives consultant clients the ability to more easily gather comprehensive and accurate timely due diligence data from their investment managers, allowing them in turn to bring increased oversight and tailored analysis to their own clients.
“We are delighted to have FEG as a client and to have the opportunity to work closely with their team to efficiently digitize their due diligence processes. We are looking forward to a successful long-term relationship with FEG,” said Louise Verga, Managing Partner at Diligend.
About FEG Investment Advisors
FEG has more than three decades of experience helping institutional investors build long-term focused portfolios through services that include traditional consulting and OCIO as well as alternative strategies’ investment manager research, due diligence, and monitoring. For more information, visit www.feg.com.
SOURCE Diligend, Inc.
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