HONG KONG SAR –\u00a0Media OutReach<\/a>\u00a0– 22 February
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SPAC Trend Continues To Heat Up<\/b><\/p>\n
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While SPACs continue to be favoured by institutional and private
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“We aim to be one of the first Asian family offices to build an
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One catalyst, Two Criteria<\/b><\/p>\n
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Mr. Tam considers the current close-to-zero or, in some cases, negative
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Mr. Tam commented that the family office places importance on the
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The relatively straightforward structure of SPACs also begins to appeal to many family offices. “As the name
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Mr. Tam believes that investor education will encourage more Asian family offices as well as
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In terms of Black Spade Capital’s target return with regard to SPACs,
HONG KONG SAR –\u00a0Media OutReach\u00a0– 22 February
2021 – 2020 proved to be a great year for Special Purpose Acquisition Companies
(SPACs). The market saw more high-profile investors joining the party while a
record number of companies went public through this unique structure. With a
whopping US$80 billion raised by over 230 blank-cheque companies, SPAC …<\/p>\n","protected":false},"author":1,"featured_media":12507,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[60],"tags":[],"_links":{"self":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/12506"}],"collection":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/comments?post=12506"}],"version-history":[{"count":0,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/12506\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/media\/12507"}],"wp:attachment":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/media?parent=12506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/categories?post=12506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/tags?post=12506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n2021 – 2020 proved to be a great year for Special Purpose Acquisition Companies
\n(SPACs). The market saw more high-profile investors joining the party while a
\nrecord number of companies went public through this unique structure. With a
\nwhopping US$80 billion raised by over 230 blank-cheque companies, SPAC IPOs not
\nonly represented approximately 50% of total IPO issuance in the US in 2020, the
\nmassive amount raised by SPACs even eclipsed traditional IPOs last year.\u00a0 <\/p>\n
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<\/p>\n![](\"https:\/\/release.media-outreach.com\/release.php\/Images\/Thumb\/500x0\/125623\/-.jpg#image-125623\")
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<\/p>\nMr. Dennis Tam, President and CEO<\/h5>\n
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\ninvestors alike in the US, they are also gaining momentum in Asia. Savvy
\ninvestors in the East are catching up fast with the trend and among them is Black
\nSpade Capital Limited<\/a>, the family office of casino magnate Lawrence
\nHo Yau Lung.\u00a0 <\/p>\n
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\nSPAC-themed portfolio,” said Mr. Dennis
\nTam, President and CEO of Black Spade Capital<\/b>. He added that “of course, we
\nhave to be selective — only high-quality SPACs with great potential are
\nconsidered”.<\/p>\n
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\ninterest rate environment as one of the catalysts that contribute to the
\nsuccess of SPAC IPOs. “Loose monetary policy means lower cost of funds and
\ngreater incentive for investors to look for new investments. SPACs enjoy a
\ngreat start this year with over US$45 billion raised by more than 140 new SPACs
\nto-date — the fact that both the number and size of SPAC deals in the first two
\nmonths of 2021 represent some 56% of the full-year performance in 2020 reflects
\njust how buoyant the SPAC market is. The whole SPAC trend has to do to a
\ncertain extent with the abundance of capital in the market seeking return. When
\nthe interest rate picks up, the trend may slow down” said Mr. Tam.<\/p>\n
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\nsponsors in terms of selection criteria. “There are two main criteria –
\nsponsors’ reputation and their track record. Sponsors are the face of an SPAC.
\nThey set out the road map of the investment vehicle. Their track record gives
\nus a glimpse of what the sponsors are capable of. I always find one-on-one
\ninvestor meeting a good way to learn about the vision and strategy that the
\nsponsors have for their SPACs. A reputable sponsor boosts investor confidence.
\nSome people point out that sponsors typically receive 20% of the equity in the
\nSPAC; in my opinion, this mechanism helps align sponsors’ interest with that of
\ninvestors which is actually positive — as long as the sponsors deliver, they
\ndeserve a matching reward. After all, if the sponsors successfully acquire or
\nmerge with a promising target (i.e. de-SPAC), everybody wins” explained Mr. Tam.
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\nsuggests, an SPAC has the sole purpose of merging with a private company and
\ntaking it public. The tenor is usually capped at two years and the sector from
\nwhich the SPAC identifies its acquisition target is announced before the SPAC
\nis listed. The fund raised by an SPAC usually serves as a good indication of
\nthe size of the future target, which is typically 3x to 4x the size of the
\nSPAC. This is the kind of clarity that investors appreciate,” explained Mr. Tam.
\n“Also, SPAC issuers offer to redeem the shares from investors at a call price
\nequivalent to the IPO price if they do not like
\nthe acquisition target. This capital protection mechanism affords greater
\nassurance to investors” added Mr. Tam. <\/p>\n
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\nother investors in the region to
\nparticipate in this SPAC trend. “We had several rounds of in-depth discussions
\nwith various investment banks and private banks before making our first SPAC
\ninvestment last year,” recalled Mr. Tam. “In the process, our bankers get to
\nunderstand our investment appetite and selection criteria and are able to
\nintroduce different SPAC opportunities to us” said Mr. Tam.<\/p>\n
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\n“We have seen some truly impressive performance of certain star SPACs, such as
\nQuantumScape and Draft Kings, which have realized a return of close to 10x and
\n4x, respectively, in 2020. Naturally, we look for above average return and we
\nbelieve the key to achieve this is to invest in quality SPACs at the time of
\nIPO” said Mr. Tam.<\/p>\n<\/p><\/div>\n\n
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