SPACs Supported by Major Asian Investors Expand Entry into US Market

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Amid the ongoing boom in Special Purpose Acquisition Company (SPAC) investments in the United States, SPACs supported by major Asian investors are also expanding their entry into the U.S. market.

On the 21st (local time), The Wall Street Journal (WSJ) reported that investment firms controlled by major players from China, Hong Kong, and Singapore are raising billions of dollars through SPAC listings on the New York Stock Exchange (NYSE) and Nasdaq.

According to the report, eight SPACs backed by Asian companies have raised a total of $2.34 billion (approximately 2.5833 trillion KRW) as of the 18th this year. This amount has already surpassed last year's annual total of $2.26 billion.

For example, a SPAC called "Primavera Capital" recently raised $360 million through its NYSE listing. This SPAC was supported by a private equity fund established by Fred Hu, who was formerly head of Greater China operations at Goldman Sachs.

Richard Li, son of Hong Kong's richest man Li Ka-shing, supported another SPAC.

The Journal also pointed out that some major Asian stock markets, such as Singapore, do not allow SPAC listings, which is one reason why these major investors from those countries are entering the U.S. SPAC market.

A SPAC is a type of paper company created for the purpose of acquiring businesses. It earns profits by acquiring promising companies, and the target companies can easily go public through the SPAC. Generally, if a SPAC fails to find a company to acquire or merge with within two years, it returns the raised funds to investors.

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