Thousands of miles from Wall Street, the boom in blank check businesses is taking hold in a region where large stock exchanges do not allow companies to raise money for unspecified uses.
In mainland China, Hong Kong and Singapore, investment firms controlled by tycoons and money managers have amassed billions of dollars in the New York Stock Exchange and Nasdaq Stock Market over the past year through special vehicles. SPAC boom was.
The vehicles are publicly listed shell companies, with pools of cash ready to invest in private companies and merge. It is being touted by investment bankers as an easier way to open up new businesses. If a SPAC cannot find a merger target within a deadline, usually two years, investors can take back their money.
On February 18, eight corporate-sponsored SPACs raised $ 2.3 billion this year, according to Dealogic data. The amount is small compared to what was raised by US companies, but it exceeds the total acquired for the entire 2020 by SPACs in the region. Bankers believe more issuances are likely, also from private equity groups.
“This is a compelling pocket of capital that all the major private equity and venture capitalists in Asia are going to consider,” said Udhay Furtado, co-head of Asian capital markets at Citigroup Inc.