Photographer: Johannes Eisele / AFP / Getty Images
Photographer: Johannes Eisele / AFP / Getty Images
The horrible check company that was taken on Wall Street by the storm is now spreading to Asia. A collection of funds and a financier in the sector is taking advantage of their bidding capabilities and understanding of U.S. capital markets to jump on the bandwagon with specialized construction companies, or SPACs.
They include Deutsche Bank AG and Lehman Brothers banker Joaquin Rodriguez Torres, who is now speaking to more than a dozen companies in the sector for the SPAC Poema Global Holdings LLC that raised just $ 345 million. Others diving into the action include L Catterton with LVMH support Asia Unit, Hong Kong tycoon Richard Li, Singapore-based healthcare entrepreneur David Sin and former hedge fund manager George Raymond Zage.
“Asia is the next major financial source for SPAC applicants,” said Torres, co-founder of investment fund Princeville Capital. “Money that has experience in both companies operating in Asia and how US capital markets work is a great asset.”
Known as blank check companies, SPACs raise money from investors and then look to acquire another business, usually a private business. A total of 248 SPACs were recorded on U.S. exchanges in 2020, raising nearly $ 83 billion, and at least 93 have started trading this year.
With trillions of dollars in stimulus flowing into the global economy and investors promising a steady rally in capital markets this year, the number of SPACs listed is racing against time to identify targets they will receive before their 24-month start-up post offering arrival deadlines.
SPAC Mania
North America produces a lion’s share of SPACs
Source: Bloomberg
“According to their 24-month expiration dates after IPO, these SPACs must meet a target in 2021 or 2022, almost equal to the total campaign value of closing SPAC contracts in the last decade,” he said. Goldman Sachs Group Inc. strategists. by David Kostin he wrote in a note Wednesday.
North American-based SPACs make up 85% of the global market, with Asia just 5%, according to data compiled by Bloomberg. While the UK and Canada approve SPACs, the US has become the largest center for such organizations. Old Asian finance hands are trying to understand both the region’s companies – particularly Chinese technology – and U.S. capital markets.
About 300 SPACs are under the pressure of de-SPAC – merging with their target firms – this year according to law firm Morrison & Foerster, or are in danger of being disbanded, with the 24-month deadline.
“If 2020 is the year of the SPAC, 2021 is the year of the de-SPAC,” said Mitchell Presser, co-chair of the Morrison & Foerster global corporate division. “Many of these SPACs look to Asia for de-SPACing opportunities. ”
But anyone looking for targets could run into the issue of supply and demand. Few quality companies are able to join them compared to the current number of SPACs, according to Sin, which raised the 2019 SPAC SC Health Corporation $ 150 million.
‘SPAC-Offs’
“High-demand companies in Asia are so hot that they hold ‘SPAC-offs’, which are the equivalent of baking, and their sponsors need a line up to make decorative displays, ”he said.
At the same time, interest from within the sector is growing. That sees a spike this year in interest from Asia ‘s limited partners, including institutions, private equity funds, high – value individuals and private banking.
“We’re going to see a lot of competition among sponsors fighting for Asian companies,” said Liao Ming, a Beijing-based former Morgan Morgan banker and former is a founding partner of Prospect Avenue Capital, an investment fund overseeing $ 500 million of targeted funds. on tech contracts mostly in China. “To remove a successful SPAC you need to have a well-known supporter but also a great ability to find. ”