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April 3, 2021
SPACs have so dominated Wall Street thinking this year that they are now the stuff of memes and ironic t-shirts.
Thanks to their burst in popularity with celebrity and retail investors alike, more than half of companies that went public last year happened through a SPAC. But the promise of these unconventional investment vehicles of bigger, more efficient returns on a shorter timeline than traditional IPOs may be starting to fall short.
Also termed blank-check companies, SPACs are shell companies that take private firms public by raising money on an exchange and then merging with or acquiring them to take their place on the exchange. It’s a back door for private firms to go public without bothering with the tedious IPO or direct listing process. Recent data on the trajectory of SPAC acquisitions show a strong run-up in the number and size of those deals last year, followed by a steep one-month drop-off in March. The number of deals fell more than 50% between Februa
Morning Brief (ET Bureau)
Arijit Barman | 31:06 Min | March 05, 2021, 8:00 AM IST
The frenzy of market listing via blank cheque companies has gripped companies worldwide and is now landing on Indian shores. Renew Power chairman Sumant Sinha and Girish Vanvari, founder of tax advisory firm Transaction Square, decode how Special Purpose Acquisition Companies work.
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Why the ultra-rich putting their money into blank-check companies
SPACs raise money from investors and then look to acquire another business, usually a private one, within two years.Premium
2 min read
. Updated: 04 Mar 2021, 09:00 AM IST Bloomberg
Near-zero interest rates have prompted Asia’s wealthy to seek alternative channels of investment, paying special attention to SPACs sponsored by large private equity funds
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Asia’s richest families and individuals are jumping on the SPAC wagon, investing in the blank-check companies that have taken global markets by storm.
Family offices including those backed by casino mogul Lawrence Ho are piling into special purpose acquisition companies to generate better returns in the low interest-rate environment.
ETF Trends CEO Tom Lydon discussed the
SPAC and New Issue ETF (SPCX) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.
SPCX is an actively-managed fund that aims to provide a broad exposure to Special Purpose Acquisitions Corporations (SPACs) and newly-listed firms.
According to Tuttle, the most appropriate strategy for managing a portfolio of SPACs is through active management as it can be more flexible in reacting to market events. This is no place for an index fund based on a rigid set of rules. When looking at investing in a SPAC, focusing on the management team is key.