The Ontario Teachers’ Pension Plan (OTPP) stands poised for a monumental financial gain of up to US$11 billion from its initial investment of approximately US$300 million in Elon Musk’s SpaceX, as the aerospace company prepares to go public next week. This landmark investment, made in June 2019, was part of a funding round that raised US$314 million, a time when SpaceX was just beginning to launch its Starlink internet service and the artificial intelligence surge was still on the horizon.
A Strategic Investment
OTPP’s investment was executed through its newly established division, Teachers’ Venture Growth (TVG), which aimed to target fast-growing companies beyond their early funding stages. Olivia Steedman, the executive managing director and global head of TVG, remarked on the performance of SpaceX: “Given the strong performance of the SpaceX team and their consistent execution against ambitious objectives, we have added to our position several times since. It has been a rewarding investment, and we remain enthusiastic about the company.”
While the pension plan has not disclosed the specifics of its total stake in SpaceX, estimates suggest that its initial investment has grown significantly. Reports indicate that when OTPP first invested, SpaceX’s valuation ranged between US$33 billion and US$36 billion. With the company achieving a pre-IPO valuation of US$800 billion last December, the initial stake could now be valued at approximately US$5.8 billion, excluding the effects of subsequent funding rounds.
Anticipation of the IPO
As SpaceX aims for a staggering US$1.75 trillion valuation and plans to price its shares at US$135 each during the upcoming IPO, OTPP’s investment could escalate dramatically. Should the company’s market performance sustain its projected valuation, the pension plan’s stake could potentially reach an eye-watering US$11.6 billion. This would represent an extraordinary return on investment for the OTPP, which manages assets totalling $279 billion on behalf of around 346,000 teachers in Ontario.
Such a return would not only underscore the efficacy of OTPP’s late-stage venture investment strategy but also highlight the potential for substantial rewards compared to traditional asset classes like stocks, bonds, and real estate that typically form the backbone of pension portfolios.
Navigating a Volatile Market
Since its inception in April 2019, TVG has undertaken over three dozen investments, accounting for about 3 per cent of OTPP’s overall portfolio as of the beginning of 2025. The unit faced challenges in 2022 when a significant investment in the cryptocurrency platform FTX went awry, leading to a loss of US$95 million. However, recent developments have bolstered optimism, with a 30 per cent increase in portfolio value last year, largely driven by the performance of SpaceX and other entities like Databricks, Inc.
Despite the promising outlook, OTPP faces uncertainties regarding the realisation of its projected gains from the SpaceX IPO. After the public offering, existing shareholders will be subject to a lockup period that restricts the sale of shares. This lockup period will conclude 180 days post-IPO, making it challenging to forecast the performance of SpaceX shares amid the anticipated public listings of other tech giants such as Anthropic and OpenAI.
Additionally, OTPP has indicated that it may not immediately sell its stake post-IPO. Gillian Brown, the pension plan’s chief investment officer for public and private investments, remarked that the IPO is not necessarily a definitive exit point. Instead, the focus will be on whether SpaceX can sustain another wave of substantial growth, especially following its acquisition of Musk’s xAI, which operates expansive data centres and the Grok chatbot.
Why it Matters
The impending IPO of SpaceX not only represents a potentially transformative event for the Ontario Teachers’ Pension Plan but also highlights the evolving landscape of venture capital investments in high-tech sectors. With its strategic focus on high-risk, high-reward opportunities, OTPP’s success could set a precedent for other pension funds considering similar investment strategies. As the tech industry adapts to shifting market conditions, the ability to navigate these challenges while capitalising on emerging opportunities will be crucial for institutional investors looking to secure robust returns for their stakeholders.