Displaying items by tag: SPACs

Special purpose acquisition vehicles (Spacs) have been one of the go-to alternatives for high-income investors in the last year, but for Goldman Sachs that could be changing. The SEC is proposing reforms to Spacs in order to improve transparency and align with traditional investments. Goldman will pause their Spac offerings in response. GS was one of the largest underwriters for Spacs in 2021 and raised almost $16 billion. This isn’t expected to be an isolated event for GS, other Wall Street firms are expected to follow suit as regulation will make these less attractive ventures.

Finsum: Biden’s SEC has been a not-so-quiet regulator when it comes to alternatives where they are quickly expanding scope to come down on these sub-industries

Goldman Sachs has a new financial product that is giving its investors a chance to bet on special purpose acquisition vehicle performance. The new product acts as a two-year bond that plays out according to SPAC performance, and gives institutional investors an income option with SPAC exposure. Goldman will take a portion of the SPAC stock itself as opposed to a fee, and will offer the option for investors to lever-up on the SPAC as well. Some are concerned about Goldman’s relationship because they are also financers and advisors of SPACs themselves, potentially posing a conflict of interest.

FiNSUM: This is one of many new products that can replace income investors’ missing-link in their portfolio, and with rates at ultra lows it’s a nice alternative to dividend stocks.

Privatized space launches were a hot topic in news cycles this year, with success from SpaceX and private launches of billionaires Bezos and Branson. However, space didn’t just move headlines this year, it moved bottom lines as well. Privatized space infrastructure investment drew $3.9 billion in 2021Q3, setting an annual record of $10.3 billion. Space investments are broadly divided up into infrastructure (which posted the record year), distribution, and application. Special Purpose Acquisition Companies (SPAC) were the predominant factor in space investments. The capital was raised in private markets and mergers to go public happened frequently this quarter by Rocket Lab, Spire Global, BlackSky, Momentous, and Redwire. The trend won’t stop this quarter as more deals SPAC deals are expected to place and set more records in Q4. Space investment has raised nearly $231.2 billion in private equity since 2012.

FINSUM: While a lot of major deals are done in private equity, retail investors can look to ETFs like ARKX to invest in this growing market segment.

(New York)

The market has been hard on special purpose acquisition companies (SPACs) as prices have fallen dramatically…see the full story on our partner Magnifi’s site

(New York)

There has been a lot going on in the SPAC world, and high yield bonds have been very active lately given the rate environment too. But from a casual glance it would be hard to see that the two have much impact on one another. Yet, as it happens, SPACs are helping strengthen the high-yield bond market. According to the Wall Street Journal, “The wave of cash raised by special-purpose acquisition companies is rolling into the junk debt market, aiding distressed companies and rewarding investors who own their bonds and loans … SPACs, also known as blank-check companies, have issued roughly $100 billion of stock this year, a record, to buy private companies and take them public. Some SPACs are targeting companies with below-investment-grade credit ratings, hoping to use their cash piles to pay down debt and grow the businesses”.

FINSUM: When there is that much money in search of targets, it makes perfect sense that the search would extend into the high yield market.