Valor Equity Partners’ investment in Elon Musk’s SpaceX tops $76 mln

  • Valor Equity triggers antitrust review for SpaceX holding
  • Chicago-based firm has invested in SolarCity, Tesla, PayPal
  • Valor Fund III wins commitment from Illinois fund

The disclosure came in a filing late last month with the Federal Trade Commission, which requires an antitrust review of investments greater than $75.9 million. The filing with the FTC also indicates that Valor Equity holds a minimum 10 percent of all outstanding voting securities in the company — or if it holds less, it has a board seat or otherwise may intend to be an activist investor, according to federal guidelines.

There’s no way to know whether the FTC filing threshold was met over a long period of time, but it indicates that it reached the level of at least $75.9 million in February. The FTC doesn’t disclose the total size of an investment.

Valor Equity founder Antonio Gracias sits on the board of directors for SpaceX, according to an April 2013 regulatory filing. Founded 2002 as a private contractor for space travel, the company recently won a job with SKY Perfect JSAT Corp of Japan to launch a communications satellite on a Falcon 9 rocket in the second half of 2015. In another milestone, the company’s Dragon-2 spacecraft has delivered two cargo shipments to the International Space Station out of 12 planned missions.

Meanwhile, Valor Equity drew a $5 million commitment from the Illinois Municipal Retirement Fund for Valor Equity Partners Fund III. The firm has been targeting $350 million for the fund, according to a Buyouts report from late 2012. Valor Equity raised $300 million in 2007 for its previous fund.

A spokesperson for Valor Equity declined to comment. An email to SpaceX by Buyouts was not answered. On its web site, SpaceX describes itself as a private company, with a staff of 3,000, owned by management and employees, with minority investments from Draper Fisher Jurvetson, Valor Equity Partners and a founder fund.

Valor Equity lists two Elon Musk ventures — SolarCity Corp and SpaceX — in its current portfolio of six holdings, which also includes the restaurant chains Sizzling Platter Inc and Fast Gourmet Group, Family Home Health Services LLC and consumer products maker Astral Brands.

Tesla Motors, Musk’s electric car company, and PayPal, where Musk made his big fortune in 2002 when he sold it to eBay for $1.5 billion, are listed as prior investments on Valor Equity’s website.

Valor owned 4.9 million shares of Tesla Motors with a market value of $83 million when the electric car maker held its initial public offering at $17 a share on June 29, 2010, according to a public filing. Valor CEO Gracias continues to serve on the car maker’s board of directors, according to its website.

Valor Equity also owned 2.7 million shares of SolarCity with a value of  $21.6 million when the company went public at $8 a share on Dec. 13, 2012. Shares of Solar City have since risen to $73.65 a share on March 11.

Gracias continues to serve on SolarCity’s board of directors, with his term scheduled to expire in 2014. Gracias and entities managed by Valor Equity continued to own 2.7 million shares of SolarCity as of April 30, 2013.

Gracias founded Valor Equity in 2001 after launching MG Capital, another private equity firm.