The Ontario Teachers’ Pension Plan (OTPP) stands on the brink of a monumental financial windfall, potentially reaping up to US$11 billion from its initial investment of approximately $300 million in Elon Musk’s SpaceX. As the aerospace and AI technology pioneer gears up for its public offering next week, the Toronto-based pension fund’s strategic early involvement could redefine its investment landscape.
Early Investments Pay Off
OTPP first ventured into SpaceX in June 2019, participating in a funding round that raised US$314 million. At the time, SpaceX was in its nascent stages of rolling out the Starlink satellite internet service, and the AI boom was still on the horizon. This investment marked the inaugural move for Teachers’ Venture Growth (TVG), a newly established division of the pension plan designed to invest in high-potential companies beyond their initial funding phases.
According to estimates, the pension fund’s stake, initially valued at around US$220 million (approximately $300 million when currency rates are factored), has seen unprecedented growth. Despite the lack of official disclosures regarding the total size of its stake, calculations indicate that OTPP’s investment could soar to an astounding value of approximately US$5.8 billion at SpaceX’s pre-IPO valuation of US$800 billion as of last December.
Anticipating the IPO
As SpaceX prepares to price its shares at US$135 each for the upcoming IPO, the projected valuation could climb to a staggering US$1.75 trillion. Should this valuation hold, OTPP’s investment from 2019 could escalate to an eye-watering US$11.6 billion. This would not only mark a remarkable return on investment but also potentially position it as the most lucrative single investment in the history of the pension plan, which currently manages assets worth $279 billion for around 346,000 members, including both active and retired educators in Ontario.
Olivia Steedman, the executive managing director and global head of TVG, expressed the fund’s satisfaction with its investment strategy, stating, “Given the strong performance of the SpaceX team and their consistent execution against ambitious objectives, we have added to our position several times since.” Despite the impressive figures, OTPP has refrained from commenting on the specifics of its investment or performance.
Navigating Market Challenges
TVG’s journey has not been without its challenges. Since its inception, the division has made over three dozen investments, representing about 3% of OTPP’s overall portfolio as of early 2025. The tech sector has faced significant volatility in recent years, with rising inflation and interest rates impacting valuations sharply. The unit experienced a notable setback in 2022 when the collapse of cryptocurrency exchange FTX resulted in a US$95 million loss.
Nevertheless, TVG has shown resilience, with its portfolio reportedly increasing by 30% last year, largely due to the surge in SpaceX’s fortunes and other companies like Databricks, Inc. As the potential earnings from the SpaceX IPO loom large, they could overshadow previous setbacks and signal a robust recovery for the investment arm.
Looking Ahead: The Road to Realisation
The upcoming IPO does not guarantee that OTPP will immediately realise these substantial gains. Existing shareholders, including OTPP, are subject to a lockup period that restricts the sale of shares, meaning that full access to capital will unfold gradually over 180 days following the expected trading start date of June 12. The performance of SpaceX shares during this period remains uncertain, especially with other tech giants such as Anthropic and OpenAI also aiming for public listings soon.
Furthermore, OTPP has indicated that the IPO may not serve as an exit point for its investment. Gillian Brown, the plan’s chief investment officer, revealed that the pension fund is likely to evaluate ongoing growth opportunities rather than rushing to divest. This positions OTPP strategically to benefit from continued developments within SpaceX, especially following the recent acquisition of Mr. Musk’s xAI, a company with substantial data centres and advanced AI capabilities.
Why it Matters
The potential financial gains from OTPP’s investment in SpaceX highlight the significant benefits of strategic late-stage venture capital investments, particularly in high-growth sectors like aerospace and artificial intelligence. As the market navigates through fluctuating valuations, OTPP’s experience serves as a case study for institutional investors looking to balance risk with reward, demonstrating how judicious investments can yield transformative results for future generations of educators and their beneficiaries.
