The 83-year-old investor who admires Musk and hopes that his businesses will rescue him from the shuffle

What could improve Barron’s situation is if his “friend” Musk’s SpaceX stock soars following its IPO next month, which is expected to be the largest in stock market history.

Barron invested in the launch rocket and satellite company back in 2017, when its value was estimated at less than $22 billion. As of May, SpaceX accounted for almost 30% of his largest fund, and next to it, Tesla shares – another venture of friend Musk – accounted for close to 19% of the fund. This is an unusual concentration of investments that indicates the great confidence in Musk’s closet. In addition, Barron invested huge sums in other companies controlled by the man worth trillions.

The relationship with Musk grew stronger in 2022, when it had trouble raising cash to buy X (then called Twitter). Barron called him and offered to invest 100 million dollars – 65 million dollars from his two mutual funds and 35 million from his own money. “Really?!”, Musk responded to the offer.

Musk recalled this exchange in a taped interview at Barron’s annual investor conference last year, where he also expressed his appreciation for the man. “I really see you as a true friend and a person I can trust,” Musk said at the same event, which was held at New York’s Lincoln Center and included performances by singers Pink and Shania Twain.

Shortly after, Barron Capital was forced to reduce the value of its investment in X, but since then the value of the holding has more than doubled, and is now worth more than $700 million.

Barron’s enthusiasm for everything Musk touches is somewhat surprising. For many years he has been known for his skepticism about technology stocks, a position that helped him avoid the heavy losses of the dot.com bubble collapse in 2000. But Musk knows how to inspire an almost ritualistic loyalty, even among long-time investors. Barron’s enthusiasm is so great that in conversations with customers and others he often uses the word “we” when talking about SpaceX’s ambitions, including the settlement of Mars.

Barron’s annual investor conferences, in which artists such as Elton John, Paul McCartney and Lady Gaga have appeared over the years, illustrate his devotion to Musk, when among the prizes distributed to the participants were Tesla Model Y cars, and the human robot Optimus was presented at the events.

Skepticism towards Tesla turned into admiration for the man who invented it

But despite the glamor and connection to Musk, Barron has experienced an abandonment of investors amid the decline in popularity of actively managed mutual funds. According to data from Manhattan-based Barron Capital, the company manages assets amounting to $43.9 billion in mutual funds and ETFs. According to the Morningstar company, this is a decrease compared to a record of $52 billion recorded in October 2021. Barron himself refused to comment on the data.

Barron grew up in Asbury Park, a beach town in New Jersey where Bruce Springsteen also grew up. As a child, he worked as a golf club carrier and other odd jobs in the area, saving $1,000 for college. He invested the money in shares of a local bank and increased the amount to $1,700, more than enough to finance most of his first year at Bucknell University, where he studied chemistry.

“Wow. It was easy”, he recalled later, and decided that this is what he would like to do.

Barron began working as a financial analyst in 1970, and later founded his own investment company. His aversion to risk was seen as a disadvantage during the euphoria of the 1990s, but the dot.com crash in 2000 made his fund a household name in the market.

In the years that followed, he looked for small companies that he could hold for a decade or more, alongside managers he was willing to bet on, including Jay Pritzker, one of the founders of the Hyatt hotel chain.

Barron also made headlines thanks to personal moves, including the purchase of a 162 dunam plot of land in the Hamptons for more than $100 million, for the purpose of establishing a spacious family complex. The deal even earned him a mention in the Page Six gossip section of the New York Post.

In 2010, Barron met Musk, who came as CEO of Tesla to present the company’s IPO to him. At first, Barron showed the skepticism that characterized him over the years and rejected the offer, thinking that Tesla would have trouble breaking through. In 2014, he changed his mind, and over the next two years he purchased shares of the company for $400 million. Barron Capital told investors that its funds had collected more than 6 billion dollars from the investment.

In 2017 Barun invested as mentioned in SpaceX. He explained to the shareholders that the move is based on his belief that reusable missiles will increase the company’s market share, and on his assessment that a large part of the world’s population still does not have access to reliable Internet service, which creates a significant opportunity for the company’s Starlink service.

According to him, the value of SpaceX increased in the first quarter of this year by 24.5%, and was valued in the market at 1.25 trillion dollars. The value of the Barron Partners fund, Barron Capital’s largest fund, in the space company reached 3.89 billion dollars, which gave it profits “on paper” of billions of dollars.

Who else benefits from the SpaceX IPO

After the IPO, SpaceX’s value is expected to reach $1.5 trillion and even more, which may further increase Barron’s profits.

Despite this, the Barron Partners fund fell by about 1.6% from the beginning of the year to May 22, compared to a 5.6% increase in its main reference index, the Russell 1000, according to Morningstar data. In the last five years the fund has lagged behind the index, but in a 10-year period it has outperformed Russell and most of the competing funds.

The decrease recorded this year is due, among other things, to the weakening of the Tesla share and decreases in other shares in which the fund has invested. According to the company, over the years, the Barron Partners fund has produced a higher return than its preferred reference index, the Russell 3000 growth index.

“SpaceX’s successful IPO and subsequent strong stock performance could quickly change the picture, given the large holdings in the fund,” said Adam Saban, co-director of Morningstar. “Most investment managers would have reduced their exposure, but Barron went for it with all his might.”

Barron won’t be the only one on Wall Street to benefit big if SpaceX takes off. Mutual fund investor Cathy Wood, who has been criticized for aggressive purchases of technology stocks and other stocks, also owns SpaceX through the ARK Venture Fund. As of March 31, 17% of the fund’s assets were invested in the company, and according to Wood’s investment company, SpaceX has been the fund’s largest holding for a long time. The fund increased by almost 8% from the beginning of the year until May 22.

Barron is convinced that Musk and the companies he built will provide additional profits in the future as well. As of April 30, Barron’s funds held SpaceX shares with a total value of more than $6 billion.

At the investor conference he held last year, Barron expressed enthusiasm for another of Musk’s visions: Tesla’s plan to deploy billions of humanoid robots in the future to perform routine tasks for humans at home and at work. He also heaped praise on Musk’s achievements: “No person has influenced our lives more than Elon,” he declared.