Summary update from iFast, on behalf of Kenanga & the private equity fund manager, Ericsenz Capital
[00:00]
Overview and Session Introduction
- The session provides an update on the Unicorn Fund II portfolio, covering the current fund status, exit process, key value drivers, fund performance, projections, and next steps.
- The primary objective remains to exceed original fund maturity targets by year-end 2025, although recent developments have impacted timing.
[00:41]
Exit Process and Fund Extension
- The exit process started with a formal buy outreach in Q1 2025, followed by price discovery and a final bid window in August 2025.
- Discussions extended into December 2025 but were paused due to significant changes in SpaceX’s valuation and IPO plans.
- SpaceX conducted an internal raise at an $800 billion valuation, doubling its prior raise earlier in 2025.
- Bloomberg reports suggest a potential SpaceX IPO valuation could reach approximately $1.5 trillion.
- Given the magnitude of the potential valuation jump, a rushed exit is deemed not in investors’ best interest.
- Consequently, the fund’s life was extended to February 7, 2028, allowing capture of this historic upside rather than premature exit.
[02:03]
Realized and Unrealized Asset Updates
- Realized exits:
- Unreal was exited late 2023, capitalizing on an upswing in the defense sector, yielding about a 10% absolute return in under a year.
- Sensetime, GOGOX, and GDL exited during August-September 2025, benefitting from a Hong Kong market rally post US-China tariff pause.
- Epic Games exit finalized in December 2025; final distribution tranche expected by end of January 2026.
- Unrealized portfolio:
- Currently represents 35% of fund NAV, with SpaceX as the largest private holding.
- CLA is under lockup until March 2026.
- Klarna and WeFox combined represent residual 6%.
- These positions will be managed actively, with exits pursued opportunistically as market conditions allow.
[03:25]
SpaceX: The Primary Value Driver
- SpaceX’s current $800 billion secondary pricing reflects a significant pre-IPO discount, with the valuation trajectory entering the final steep growth phase before IPO.
- Historical data shows the majority of value is realized during the IPO step-up. Exiting now risks missing this final surge.
- SpaceX is one of the most in-demand private companies globally, with IPO plans for late 2026 actively discussed in major financial media.
- The current valuation already implies a nearly sixfold return on invested capital, trending toward the $1.5 trillion IPO target.
- Business fundamentals are strong, with revenue expected to grow 48% year-over-year to approximately $23 billion in FY 2026.
- The main uncertainty is timing of public market readiness, not business momentum.
- Extending the fund preserves flexibility to realize value at optimal pricing instead of secondary market discounts.
[05:16]
Fund Performance Summary
| Metric | Value/Comment | Notes |
|---|---|---|
| Fund NAV as of Dec 2025 | 37% drawdown | Based on $400B SpaceX valuation |
| SpaceX contribution to fund gains | >20% net gain impact | Unrealized gain at $400B = 3x invested capital |
| SpaceX valuation at $800B | ~6x invested capital multiple | Recent secondary round valuation |
| China holdings impact | ~30% negative impact on NAV | Due to regulatory tightening, US chip restrictions, property downturn |
| Other late-stage assets impact | 4-7% negative impact each | Affected by global capital rotation into AI names |
- The China holdings Sensetime, GOGOX, JDL were significantly pressured by regulatory and market headwinds.
- Other late-stage assets such as Epic, Klarna, Calm, and Wefox were affected by the global shift of capital toward AI-specific companies.
[07:07]
Asset Management and Exit Strategy
- SpaceX will be held opportunistically for market conditions to reflect fair value near IPO price, maximizing premium upside.
- CLA will be reassessed after the lockup expires in March 2026, with exit timing based on market stability and valuation.
- Wefox and Calm represent smaller residual positions; exits will be pursued opportunistically within the extended fund timeline.
[07:49]
Fund NAV Projections Under Different Scenarios
| Scenario | SpaceX Valuation | Projected Proceeds (Million $) | Fund Return on Inception |
|---|---|---|---|
| Current NAV (Dec 2025) | $400B | Not specified | 37% drawdown |
| Secondary round valuation | $800B | $8.3M | Slight discount |
| Potential IPO valuation | $1.5T | $15.5M | +53% return |
- Extending the fund allows shifting from capital preservation to potentially significant capital gains by capturing SpaceX’s IPO value appreciation.
- Besides SpaceX, CLA remains the next largest holding, locked until March 2026, with Wefox and Calm as minor positions.
[10:08]
Q&A: Rationale for Holding SpaceX Position
- Although SpaceX has relatively strong secondary liquidity, immediate liquidation is avoided because:
- Secondary buyers typically require a 10-20% liquidity discount below headline valuations, reducing realized proceeds.
- The anticipated IPO at around $1.5 trillion could double the current $800B valuation, offering substantially greater returns.
- Holding for IPO aligns with maximizing risk-reward, avoiding premature exit at a discount.
- The fund has held SpaceX for six years, and exiting just months before IPO would forfeit a large portion of total expected returns.
[13:06]
Addressing Concerns Over Fund Extension and SpaceX IPO Uncertainty
- The fund extension is justified by the strong liquidity profile and strategic demand for SpaceX shares, driven by sovereigns and large institutions.
- SpaceX’s business is resilient across economic cycles, unlike typical consumer tech stocks.
- The exit strategy is not solely dependent on an IPO; active secondary markets and tender offers provide alternative liquidity paths.
- The extension provides runway to choose the highest exit price, whether through IPO or strategic secondary sales.
[15:43]
Validity of the $1.5 Trillion IPO Valuation
- The $1.5 trillion valuation is based on reports from Bloomberg and Reuters citing SpaceX insiders.
- The secondary market price has already doubled from $400 billion in November 2025 to $800 billion in December 2025, reflecting market optimism.
- In the unlikely event that the IPO does not materialize at expected valuations, secondary sales remain a fallback option.
- The $800 billion valuation is from an insider funding round, expected to be reflected in fund NAV statements by March 2026 (affecting Kenanga Unicorn 2 NAV in April 2026).
[17:38]
Portfolio Diversification: Beyond SpaceX — CLA Update
- CLA IPOed in September 2025 at about $40/share; initial surge to $57 followed by decline to around $30, below IPO price.
- Recent quarterly earnings showed 26% revenue growth but an adjusted operating loss of $14 million, which missed expectations, partly due to increased credit provisioning.
- Market headwinds include capital concentration in AI-focused stocks, affecting fintech and buy-now-pay-later segments like CLA.
- Wall Street analysts maintain a strong buy consensus, with price targets ranging from $45 to $55, indicating significant upside potential.
- Post-IPO lockup expiry (March 2026), the fund will seek a stabilized exit window to avoid selling into crowded markets.
- The 2-year fund extension allows flexibility to time exits to optimize pricing rather than forced liquidation.
[21:17]
Exit Considerations for CLA
- Exit timing will depend on:
- Share price performance post lockup expiry.
- Market volatility and overall stability.
- Analyst price targets and company fundamentals.
- The fund aims to dispose of shares once acceptable price levels consistent with analyst guidance are reached.
[23:44]
Other Residual Assets: Calm and Weox
- Calm remains the global leader in mental health platforms, but the digital wellness sector has faced a sharp valuation reset.
- Secondary liquidity for Calm is currently thin and selective, with valuation recovery constrained relative to past highs.
- Wefox underwent a predatory down round in July 2025 to restructure, causing significant dilution and limiting recovery potential.
- Despite operational stabilization and improving cash flows, Wefox’s recovery is muted by dilution.
- Liquidity for Calm and Wefox is limited; forced exits now would likely result in distress sale pricing, detrimental to fund value.
- Extension removes pressure to sell prematurely, allowing time for asset price recovery.
- These positions are smaller allocations and have limited impact on overall fund performance compared to SpaceX.
[26:54]
Exit Strategy and Market Conditions for Residual Assets
- Market conditions, especially capital rotation towards AI, have suppressed valuations for Calm and Wefox.
- Discussions with potential buyers have revealed lackluster liquidity and pricing interest.
- The fund will continue to pursue exit opportunities and update investors as discussions progress.
[28:13]
SpaceX IPO Lockup and Secondary Exit Options
- Standard IPO lockup periods are expected to be around six months, though specifics are not confirmed.
- In the event of IPO delays or extended moratoriums, the fund may pivot to strategic secondary sales, potentially at a discount but still better than pre-IPO secondary prices.
- The fund maintains multiple exit options to maximize outcomes rather than being locked into a single path.
[30:14]
Summary of Planned Milestones and Exit Timelines
| Asset | Milestone | Expected Timeline | Exit Approach |
|---|---|---|---|
| SpaceX | IPO and lockup expiry | IPO late 2026; lockup expiry mid 2027 | Hold for IPO premium; opportunistic exit post lockup |
| CLA | Lockup expiry | March 2026 | Exit post lockup within extension window |
| Calm & Weox | Opportunistic exit | Within fund extension (by Feb 2028) | Exit when market conditions improve |
- Proceeds from divested assets (Sensetime, GogoX, JDL, Unreal, Epic) have been or will be distributed promptly to investors.
- Fund does not consider capital locked; distributions occur as and when assets are divested.
[36:09]
Final Remarks and Strategic Rationale
- The fund extension centers on maximizing value rather than adhering strictly to original timelines.
- Holding SpaceX for IPO could generate returns substantially above current multiples (3x or 6x), aligning with fund’s long-term growth mandate.
- The team remains committed to distributing proceeds promptly from other assets as exits occur.
- This approach is presented as the responsible action to protect and grow investor capital.
- Further written updates and newsletters will be circulated to keep investors informed.
[37:29]
Clarification on Current Fund Valuation and Future NAV Adjustments
- Current fund valuation reflects a 37% drawdown, not yet incorporating the recent $800 billion SpaceX valuation.
- The $800 billion valuation will be reflected in the fund’s NAV statements by March 2026 (affecting Kenanga Unicorn 2 NAV in April 2026), expected to uplift the NAV from -37% to approximately -3.8%.
[39:22]
Frontier Fund and SpaceX Investment Context
- Frontier Fund considered SpaceX as an asset at its launch in December 2021 but did not invest due to:
- Strict and highly competitive allocation limits for SpaceX shares.
- Pricing challenges and lack of executable valuations during the investment window.
- Private company investments like SpaceX involve negotiated transactions, not open market trades, leading to liquidity and pricing complexities.
- Frontier prioritized deploying capital into assets with clearer access and pricing at the time.
[41:43]
Closing Remarks
- Investors are encouraged to monitor SpaceX developments closely via news alerts.
- Further communications and updates will be provided to maintain transparency.
- The fund team remains available for questions and ongoing support.
Key Conclusions:
The fund’s NAV is expected to materially improve in upcoming statements as new SpaceX valuations are incorporated.
SpaceX is the primary driver of Unicorn Fund II’s value, and the extension to 2028 is a strategic decision to maximize returns by capturing the full upside of an anticipated IPO at potentially $1.5 trillion valuation.
Immediate exits at current valuations risk significant value loss, especially due to secondary market discounts and large potential IPO step-up.
The fund has successfully realized and distributed proceeds from several portfolio companies, demonstrating commitment to returning capital when opportunities arise.
Other portfolio assets (CLA, Calm, Wefox) are being actively managed, with planned exits post lockups or when market conditions improve, though their impact on overall fund performance is smaller relative to SpaceX.
Investors face some uncertainty regarding timing but benefit from a clear, flexible exit strategy with multiple liquidity pathways.