North Carolina Treasurer Declines Direct SpaceX Investment, Prefers OpenAI and Anthropic Stakes for Pension Fund
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You might want to know
Is a sky-high valuation a sufficient reason for a large public pension fund to avoid a popular IPO?
How can exposure to a company be achieved indirectly if a fund avoids private placement participation?
Main Topic
North Carolina State Treasurer Brad Briner recently explained why his office chose not to acquire a direct stake in SpaceX as the rocket and satellite company prepared for an initial public offering. Managing a pension portfolio that covers teachers, firefighters and police officers, and overseeing approximately $200 billion in assets, the treasurer emphasized that valuation considerations and the need for predictable returns for retirees drove the decision.
Briner acknowledged the technical achievements and entrepreneurial leadership behind SpaceX, led by Elon Musk, but said the companys proposed public-market valuation, which approached roughly $1.75 trillion to $1.8 trillion, made it hard for his fund to justify a direct investment at that price point. He framed the choice in terms of fiduciary duty: the pension fund seeks a high-single-digit, predictable rate of return for its beneficiaries, and extremely large valuations can compress expected upside and raise downside risk.
The context for this decision was SpaceXs IPO pricing: the company planned to offer 555.6 million shares around $135 each, a transaction expected to raise about $75 billion and to put the company among the largest listings ever. Such size and a lofty valuation prompted debate among institutional investors. Some view SpaceX as a near-unique asset with strong competitive positions in launch services and satellite broadband, while others caution that current market prices may already reflect much of the companys long-term potential.
Rather than committing capital directly to SpaceX in the private market, Briner said his office had chosen to allocate capital toward leading artificial intelligence companies — specifically OpenAI and Anthropic — which the treasurer believes offered a more attractive risk-reward profile. North Carolina invested about $40 million in OpenAI and committed roughly $250 million to Anthropic earlier in the year. According to Briner, the Anthropic position has appreciated substantially and is now worth more than $600 million, an outcome he described as evidence of the investment opportunity identified when the company appeared mispriced.
Briner characterized the judgment as a comparison of perceived future returns versus present price. He noted that while SpaceXs technology and market positions are impressive, at some point an asset becomes "fully priced," reducing the margin of safety for long-term investors aiming for steady returns. This approach reflects a broader institutional-investor tradeoff: balancing exposure to disruptive, high-growth companies with the responsibility to preserve capital and deliver consistent outcomes for beneficiaries.
As for gaining exposure without participating in a private placement, Briner indicated that North Carolinas pension system expects to obtain indirect exposure to SpaceX through publicly traded index funds once the company lists. That path lets the fund participate broadly in the markets allocation to the company while avoiding the concentrated, potentially pricier private-market purchase. He confirmed the fund held no private holdings in SpaceX at the time of his comments.
The treasurers remarks drew attention to a broader debate among asset managers and pension funds over whether to chase headline-grabbing IPOs or allocate to emerging technologies through targeted private investments. In this instance, Briners office favored the latter: placing sizeable bets on AI developers where he saw clearer value based on the funds assessment of pricing and technology. He specifically cited the power of Anthropics technology as justification for the earlier allocation when the firm appeared undervalued.
Institutional reactions to large IPOs are often mixed. Some investors prioritize ownership of category-leading companies regardless of peak valuations, motivated by the belief that sustained monopoly-like profits or structural growth will justify initial prices. Others, like Briner, prioritize disciplined entry points and measured exposure, mindful of the obligations to retirees and the need to manage downside risk. The decision also illustrates how large public pensions can influence or reflect broader capital flows: choosing where to allocate hundreds of millions in private capital signals confidence in certain technologies and skepticism about others.
Finally, Briner noted that while his fund avoided a private allocation to SpaceX, it did not rule out participation altogether. Through passive public-equity index positions, the pension plan will likely gain some exposure if SpaceX becomes a component of major indices after its listing. This compromise allows the fund to remain involved in the companys public-market performance without taking on the concentrated private risk at a valuation the treasurer considered excessive.
SpaceX did not immediately respond to a request for comment at the time Briners remarks were reported.
Key Insights Table
| Aspect | Description |
|---|---|
| Valuation Concern | Treasurer cited roughly $1.75$1.8 trillion valuation as limiting upside for pension returns. |
| Pension Fund Size | Manages about $200 billion for public employees. |
| Alternative Allocations | Allocated ~$40M to OpenAI and ~$250M to Anthropic, with Anthropic position appreciating beyond $600M. |
| Indirect Exposure | Plans to gain exposure to SpaceX via index funds after IPO, not through private stake. |
Afterwards...
Looking ahead, the treasurers stance highlights an enduring tension in institutional investing: how to balance participation in transformative companies with disciplined valuation-based decision-making. As more private companies approach public markets at lofty prices, pension funds and other large investors will continue to weigh concentrated private opportunities against diversified, index-based exposure. The outcome of SpaceXs IPO and the performance of AI investments will likely inform future allocation choices at public funds that must align investment strategy with long-term obligations.
