In early 2017, WashU’s Investment Management Company (IMC) invested about $50 million in SpaceX. Now, the stake represents WashU’s biggest investment position ever, roughly 10% of the school’s $17.7 billion endowment. 

WashU’s endowment grew from $13.4 billion to $17.7 billion in fiscal year (FY) 2026. Chancellor Andrew D. Martin wrote in an Oct. 8 letter that the endowment’s 37.3% year-over-year increase was likely among the best in the country. 

SpaceX went public in June at $135 a share, becoming the largest-ever initial public offering (IPO), at a valuation of $1.77 trillion. The stock has since climbed above $200 and now trades around $150.

“After the IPO, when the stock was above $200, [SpaceX’s share of the endowment] was quite a bit bigger than 10%,” WashU’s Chief Investment Officer Scott Wilson said.

WashU’s Executive Vice Chancellor for Finance and Chief Financial Officer David J. Gray said he and Associate Vice Chancellor for Finance and Treasurer Amye Kim will likely recommend raising the yearly share of the endowment the University spends for FY 2028.

Each year, WashU spends between 3% and 5.5% of the endowment’s average value over the previous five years. Within that range, the IMC board decides annually how much to adjust spending. For FY 2027, it approved a 4% increase in endowment spending, Gray said.

“We will be seeking a percentage increase in the spending rate that will be greater than the 4% that was applied this year,” Gray said. 

Gray said the higher spending should be good news to deans of both Danforth Campus schools and the School of Medicine, whose schools rely on endowed scholarships and professorships to operate. 

In its 2025 annual endowment report, the IMC listed 63% of endowed funds as donor-restricted, leaving 37% without donor restrictions. About 23% of the endowment is restricted for scholarships and fellowships, according to Gray.

In the past, WashU’s endowment had been subject to an annual 1.4% tax on its net investment income. Signed in July 2025, the One Big Beautiful Bill Act replaced the previous flat 1.4% tax with a tiered structure, based on endowment value per student, starting in 2026. WashU’s endowment is now subject to a 4% tax rate.

Gray said the University’s excise tax bill has averaged about $9 million a year in recent years and estimates it could rise to as much as $50 million next year.

“It’s just unfortunate. We don’t particularly like having to deal with it, but it’s the law, and we will adhere to it, and it will have a detrimental effect on the University,” Gray said. 

Gray said that the SpaceX position now exceeds the University’s traditional limits on how much of the portfolio any single asset should make up. The IMC now wants to shrink it.

“It’s a high-class problem, but it is just a problem,” Wilson said. “We want a diversified portfolio, and having more than 10% of our assets in one stock is not something we want long-term.” 

Wilson said the IMC has already hedged some of its position since the IPO and plans to sell gradually over the next several years.

“In the case of SpaceX, we’ve perhaps granted some extra latitude there simply because it has been such a stellar performer,” Gray said. “We’ve at least tried to be very thoughtful about how we intelligently deploy a hedging strategy to safeguard those gains. So far, it’s looking pretty good.”

After an IPO, early investors typically can’t sell their shares right away. SpaceX’s IPO had a 180-day staggered lockup period, meaning every few months a set percentage becomes available.

Even then, WashU doesn’t fully control the timing. Wilson said most of the stake is held through a fund set up specifically to invest in SpaceX, and that the University’s partners decide when to distribute shares.

According to Wilson, IMC Managing Director Adam Kurkiewicz was responsible for the SpaceX investment. 

WashU invested in a fund run by Vy Capital, which strongly believed in SpaceX. 

The IMC then did its own research and visited SpaceX alongside Vy Capital, ultimately deciding it wanted more exposure to the company than the fund alone would give it.

“The thesis in 2016 was pretty simple,” Kurkiewicz said. “Space was a really huge potential market, but the industry had astronomical launch costs and very low launch frequency that were the bottlenecks to creating different orbital business models.”

At the time of the investment, SpaceX had landed an orbital-class rocket but hadn’t yet shown it could reuse boosters consistently, Kurkiewicz said. Nearly a decade later, the company has demonstrated that ability. Starlink, SpaceX’s satellite internet service, and its later expansion into artificial intelligence have also helped drive growth. 

“A lot of what is now SpaceX didn’t exist,” Wilson said. “The only thing we were really underwriting at the time was the launch business, which we thought could be a $40, $50 billion plus business.”

WashU isn’t the only school to benefit from an investment in SpaceX. The Wall Street Journal estimates that WashU will have the largest 10-year return of any endowment, competing with universities like Harvard and Brown.

“It’s been a wonderful story to be a part of,” Kurkiewicz said. A lot of companies are pretty boring. This one’s actually fun. You get to watch stuff go to space.”