{"id":7866,"date":"2026-08-27T17:39:26","date_gmt":"2026-08-27T17:39:26","guid":{"rendered":"https:\/\/nextcitydigest.com\/?p=7866"},"modified":"2026-08-27T17:39:26","modified_gmt":"2026-08-27T17:39:26","slug":"spacex-windfall-presents-dilemma-for-california-pension-fund","status":"publish","type":"post","link":"https:\/\/nextcitydigest.com\/?p=7866","title":{"rendered":"SpaceX windfall presents dilemma for California pension fund"},"content":{"rendered":"<div>\n<div>\n<p><strong>By Preeti Singh, Bloomberg<\/strong><\/p>\n<p>A California pension\u2019s tiny SpaceX investment has ballooned to about $2 billion, creating a windfall for the portfolio \u2014 and an unexpected headache.<\/p>\n<p>Read more <a href=\"https:\/\/nextcitydigest.com\/?p=7864\">Body cam footage shows 49ers owner Jed York\u2019s arrest in Ohio<\/a><\/p>\n<p>Roughly eight years ago, Orange County Employees Retirement System backed Elon Musk\u2019s aerospace and space technology company with $60 million. The investment has grown so large that it\u2019s become a much more concentrated position than originally expected, and the pension must now re-vamp some risk and portfolio strategies to manage such a large and volatile asset over the long term.<\/p>\n<p><strong>RELATED:\u00a0Zelenskyy gives award to Elon Musk for Starlink\u2019s role in Ukraine<\/strong><\/p>\n<p>The investment was done in two funding rounds through co-investments with venture capital managers in the pension fund\u2019s portfolio, according to Chief Investment Officer Molly Murphy.<\/p>\n<p>SpaceX went public on June 12, surging to about $225 per share before falling as low as $104.83. It now trades at around $136.20.<\/p>\n<p>But the volatility of the share price has led to big swings in the pension fund\u2019s exposure to the company, with SpaceX\u2019s portion of the portfolio ranging between 4% to 9% since the IPO, Murphy said. In contrast, the Magnificent 7 stocks and Broadcom Corp. account for a more consistent 1% each in the public equity book, she said.<\/p>\n<p>\u201cWe believe that we\u2019re buying generational holdings, but living with SpaceX month to month, quarter to quarter is going to be interesting,\u201d Murphy said in an interview.<\/p>\n<div>\n<\/div>\n<p>It\u2019s a high-class problem, but a problem nonetheless. OCERS, as the pension is known, will need to adopt different risk parameters for the position, Murphy said.<\/p>\n<p>\u201cLet\u2019s just say it doubles from here, which is a pretty tame expectation for the next five years,\u201d Murphy said. \u201cSpaceX will be a very concentrated position for a very long time for the pension. So we have to not just think about concentration risk, but also volatility in the stock.\u201d<\/p>\n<p>Read more <a href=\"https:\/\/nextcitydigest.com\/?p=7862\">School bus chaos in Sierra foothills: Mom climbs through window after driver locks kids in<\/a><\/p>\n<p>OCERS invested in the rocket company as part of its effort to become a bigger participant in California\u2019s economy, Murphy said. At that time, SpaceX\u2019s plants were located in the state. When the pension first invested, it was underwriting \u201cthe promise\u201d of Starlink Inc., SpaceX\u2019s satellite internet service, Murphy said.<\/p>\n<p>\u201cWe were really getting the opportunity to invest in a next-gen communications company with a rocket company as collateral and the Department of Defense contracts that the main body of SpaceX\u2019s business was providing us,\u201d Murphy said.<\/p>\n<div>\n<\/div>\n<p>OCERS has backed other ventures related to artificial intelligence and holds them in its venture capital portfolio, Murphy said, declining to name the investments. The pension\u2019s venture capital holdings are \u201cexploding because of these big wins\u201d and now exceed their target size.<\/p>\n<p>\u201cWe\u2019re actually trying to do a lot of maintenance,\u201d Murphy said. OCERS will move SpaceX to its public markets asset class in the near future to rebalance its venture book, she said.<\/p>\n<p>The pension doesn\u2019t want to sell down its position or cash in on SpaceX yet, Murphy said.<\/p>\n<p>\u201cWe believe this is a holding that we\u2019ll probably have for as long as we believe in the company, which I think is tethered to the longevity of Elon Musk in some way, shape or form,\u201d she said.<\/p>\n<p>Read more <a href=\"https:\/\/nextcitydigest.com\/?p=7860\">Lottery ticket worth $138,836 sold in San Jose<\/a><\/p>\n<p>More stories like this are available on bloomberg.com<\/p>\n<p>\u00a92026 Bloomberg L.P.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A California pension\u2019s tiny SpaceX investment has ballooned to about $2 billion, creating a windfall for the portfolio \u2014 and an unexpected headache.<\/p>\n","protected":false},"author":1,"featured_media":7865,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-7866","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - 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