Asset Management

Asia-Focused SPAC Lists, Raises $86 Million

Tom Burroughes Group Editor 13 June 2024

Asia-Focused SPAC Lists, Raises $86 Million

In the past, several banks serving family office and HNW clients were involved in the sector, which has cooled considerably in the past three years. These entities are called "blank cheque" or special purpose acquisition companies – "SPACs".

Chenghe Acquisition II Co has listed in New York, netting gross proceeds of $86.25 million. 

This Asia-focused company is an example of a blank cheque entity, or special purpose acquisition company (“SPAC”), which became red hot about four years ago – drawing attention from private banks and wealth managers – before cooling sharply.

The company, incorporated in the Cayman Islands, said yesterday that its initial public offering of 8,625,000 units (including 1,125,000 units sold upon exercise of the underwriters' over-allotment option in full), achieved a public offering price of $10.00 per unit.

The SPAC exists to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganisation, or similar business combination with one or more businesses or entities. 

So far, it hasn’t chosen target firms or held talks to make deals. It intends to concentrate on firms operating in Asia or global businesses that have a presence in the region, Chenghe Acquisition II Co said.

SPACs are created to merge with a private company within two years of the listing. US regulators in 2021 frowned on the fast pace of SPAC listings at the time, concerned about possible abuses and the impact on market behaviour. Since that year, the sector has cooled sharply. 

Chenghe Acquisition II Co said that Cohen & Company Capital Markets acted as lead book running manager, Seaport Global Securities acted as a joint book runner for the offering, and Revere Securities, Chenghe Capital Management and Webull Financial acted as co-managers.

A number of banks serving high net worth and family office clients have been active in the space, such as Citi Private Bank (see this interview here). 

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