Early Tesla Backer Debuts Funds Tied to Musk’s xAI, SpaceX
Ron Baron’s funds, partnership offer entry to private startups
‘I want my business to last for 100 years,’ Baron says
Excerpt
Originally published July 17, 2024 at 10:02am EST
Ron Baron, an early backer of Tesla Inc., is deepening his embrace of ChiefExecutive Officer Elon Musk by setting up partnerships that would permit clients to invest in two of the billionaire’s private ventures.
Baron Capital Management formed a pair of funds in recent months to invest solely in Musk’s xAI, the artificial intelligence startup that raised some $6 billion through a private stock sale earlier this year. Baron’s firm also started a private partnership to buy more shares of Space Exploration Technologies, Musk’s rocket and satellite company.
Soaring demand for the limited supply of SpaceX and xAI shares hasspawned a cottage industry in which Wall Street firms create single-purpose vehicles that charge stiff fees for the chance to invest in the company.
The Baron vehicles, on the other hand, are forgoing high compensation for adifferent sort of payoff: a wager that providing access to SpaceX and xAI will raise the firm’s profile among family offices and private bank clients who might later invest in its mutual funds.
“We are doing this because we want people to know about our mutual funds,” Baron, 81, said in a telephone interview. “I want my business to last for 100 years.” […]