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Vy Capital to Close to External Investors After Raking in 28% Annual Returns

Strategic Insights

— 1 min read

Vy Capital, a secretive technology investment group, will cease taking outside financing after achieving 28% annual returns over the past decade, leveraging its $15 billion assets under management. The four-person investment team led by John Hering and Alexander Tamas has backed Elon Musk's companies, including SpaceX and xAI, with impressive valuations. Vy's success has made it a vital player in financing Musk's business ventures, including a $700 million commitment to Musk's Twitter takeover.

Key Takeaways:

  • Vy Capital has $15 billion in assets under management and has generated 28% annual returns over the past decade.
  • The group plans to continue managing its current portfolio and investing its own capital after closing to external investors.
  • Vy has been a lead investor in SpaceX, with the company's valuation set to reach $400 billion, more than doubling its value in less than two years.
  • Vy has also backed xAI, targeting a valuation of up to $200 billion, a 10-fold increase from early last year.
  • The group is the largest external shareholder in Neuralink and BoringCo, with Neuralink's valuation increasing to $9 billion in the past two years.
  • In 2022, Vy committed $700 million to Musk's bid for Twitter, becoming one of the biggest backers of the $44 billion takeover.
  • Pablo Mendoza, former managing director at Vy, joined Elon Musk's "transition team" at Twitter and later became head of finance for xAI, which acquired Twitter.
  • Vy has raised three funds of less than $1 billion each and has a total operations team of about 20 people.

Statistics:

  • 28%: Annual returns generated by Vy Capital over the past decade.
  • $15 billion: Assets under management by Vy Capital.
  • $400 billion: Expected valuation of SpaceX.
  • $200 billion: Targeted valuation of xAI.
  • $9 billion: Current valuation of Neuralink.
  • $700 million: Commitment by Vy to Elon Musk's Twitter takeover bid.
  • $44 billion: Total value of Elon Musk's takeover of Twitter.

Sources:

  • People familiar with the matter
  • Vy Capital
  • PitchBook
  • Twitter (renamed X)
  • Elon Musk
  • John Hering
  • Alexander Tamas
  • Pablo Mendoza
  • Hannah Murphy
  • San Francisco Chronicle

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