Special purpose acquisition companies (SPACs) are gaining in popularity with private equity firms as an investment vehicle. Sidley Austin LLP attorneys explain what they are, who is using them, and say they entail a relatively low upfront investment, but offer a very significant upside potential and shorter investment horizon.
In recent years, private equity firms have looked increasingly to special purpose acquisition companies (SPACs) as an alternative investment opportunity. A SPAC is a unique investment vehicle that allows a company to raise capital through an initial public offering (IPO) prior to establishing any operations and to use the capital to acquire a business.
They are also an attractive alternative to an exit through an IPO because they provide the buyer and sellers greater control over valuation, allow the sellers to receive more cash at closing, and are a viable route to the public markets even during periods of market volatility. Click to read more.
The coronavirus pandemic has led to an unprecedented slowdown in the global economy. The U.S. gross domestic product (GDP) fell by 33% on an annual basis in the second quarter, more than triple its previous worst quarter. The eurozone fared even worse: Its GDP contracted by 40% on an annual basis during the second quarter.
In the midst of this global slowdown and ongoing geopolitical uncertainty, the alternative assets industry remains healthy. Yield-hungry investors are continuing to pour capital into alternatives with assets under management now exceeding $10 trillion according to Preqin, the alternative assets industry’s foremost provider of financial data and analytics. Click to read more.
The pace of economic recovery improved during the previous week on account of divergent trends in indicators like mobility and employment, according to a Nomura note on Monday.
The Nomura India Business Resumption Index (NIBRI) increased to 71.8 in the week ending August 9, after being stuck around the 70 mark for the past three weeks. NIBRI is a weekly tracker of the pace at which economic activity normalizes. Click to read more.