Investment Highlight: International SPACs

Our analysis of Q1 2021 SPAC mergers and their performance a year later reveals that, of 42 mergers, only 7 are trading at higher prices than the public debut. Some investors have declared that companies that went public via SPAC are inherently uninvestable. But, while the U.S. is cooling its enthusiasm for SPACs and even traditional IPOs amidst market volatility, international shell companies are cropping up at a record pace.

                                          Fred Hu of Primavera Equity 
Primavera Equity has filed for one of the first special purpose acquisition companies in Hong Kong. Headed by former Goldman Sachs partner Fred Hu, the SPAC will seek a target in greater China deemed high-growth in technology, consumer, or retail. The state-owned investment firm Temasek filed for its own SPAC in Singapore last month. The U.K. and Brazil are also turning on to SPACs.

New rules promulgated in countries outside of the U.S. have convinced companies in these non-U.S. countries to stay at home instead of opt to go public via a U.S. SPAC. It remains to be seen how these new SPACs will perform.

For more on SPACs, read about SPACs as bond alternatives, the role of PIPEs in SPACs, and a general overview of how they work.