There is a lot of fascination with space travel these days. So much, in fact, that Morgan Stanley is predicting that the space sector will be valued at over $1 trillion by 2040. Actor William Shatner recently took a trip on Jeff Bezos’s Blue Origin, and NFL hall of famer Michael Strahan is on tap to do the same. But I wonder what is attracting all the buyer attention to the sector?

Surely whenever there is an emerging trend in a fragmented industry, a rush of consolidation follows. Everyone wants to be the first to invest in something, but no one will let one business have the entire pie. According to one PE investor, the space industry is growing at a rapid pace. Launch costs are falling, which is opening up new commercial opportunities and attracting investors.

“Launch continues to attract a lot of capital, as witnessed by the activity of SpaceX, Rocket Lab, ABL, and others,” AE Industrial Partners partner Kirk Konert tells Mergers & Acquisitions. “AE Industrial has been attracted to investing in space infrastructure, and the picks and shovels for this space. That was our strategy in building Redwire, and why we invested in Sierra Space. Sierra Space will be the cargo transportation and real estate provider in space that will allow for some of the exciting new technologies to flourish.”

Earlier in November, AEI, General Atlantic, and others, invested in Sierra Space. Sierra Space is developing a space station called Orbital Reef in partnership with Blue Origin.

“Record capital has flowed into the space sector, which has naturally led to more M&A and industry consolidation,” Konert adds. “Just a few years ago, space was not a focus area for private equity.”

Are you looking to invest in space companies? I’d love to hear about it at [email protected]

– Demitri Diakantonis