Private banks, family offices and other wealth management organisations have pushed into the space.
Vistra has launched a service aimed at “blank cheque” businesses, aka special purpose acquisition companies (SPACs) which have surged in the US and are also growing in other parts of the world. The offering adds to Vistra’s advisory and administrative support to fund, corporate, capital market and private wealth clients.
The offering will work with clients at different stages of SPACs, starting with initial public offerings of these entities.
A SPAC is a shell corporation listed on a stock exchange with the purpose of acquiring a private company, thus making it public without going through the traditional initial public offering process. Buoyant equity markets, ultra-low interest rates and interest in non-traditonal investment routes has boosted the sector in the US, in particular. Private banks, family offices and other wealth management organisations have pushed into the space. Typically, a SPAC has two years to find a suitable target operating company, then effect a reverse takeover, after which the SPAC is an operating company.
“As we experience accelerated change across the business landscape globally, SPACs have picked up pace and continue to develop as an alternative to traditional IPOs in capital markets due to the speed in which they can bring companies to the public market – providing the strategic combination of funding and know-how of sponsors to rapidly scale high growth businesses around the world,” Navita Yadav, global head, capital markets, Vistra, said.
“Although the process for public listing has accelerated via SPACs, there are still multiple considerations such as selection of stock exchange, jurisdiction for entity set-up, entity governance, and operational support to name a few. Vistra helps remove the complexities associated with going public through our full lifecycle SPAC offering,” Debbie Farman, head of Vistra’s UK advisory and global co-lead advisory, said.
US initial public offerings – important liquidity events that wealth managers track – surged in the first half of 2021 reaching $171 billion, beating the 2020 record of $168 billion (source: Dealogic). SPACs have fuelled some of this rise. (See here for an article going into recent changes in the US and European markets.)