Thousands of miles from Wall Street, the boom of blank check companies is taking hold in a region where major 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 collectively raised billions of dollars in the New York Stock Exchange and the Nasdaq over the past year through acquisition for special uses, showing its scope The SPAC boom has been.
Vehicles are commercial companies that are listed on the stock exchange and have cash funds ready to invest in private companies and combine them. Investment bankers have promoted them as an easier way to make emerging companies public. If a SPAC does not find a merger target within two years, usually investors could get their money back.
On Feb. 18, eight company-sponsored SPACs in Asia raised a total of $ 2.3 billion this year, according to Dealogic data. The amount is small compared to what U.S. companies have collected, but it already exceeded the total SPACs collected in the region throughout 2020. Bankers say there are likely to be more issues, including private capital.
“This is an attractive capital pocket that all the big private and venture capital firms in Asia will consider,” said Udhay Furtado, co-director of Asian equity capital markets at Citigroup Inc.