Secondaries Investor Quotes Daghlian and Keegan on Use of SPACs in Secondaries Market

Akin Gump investment management partner John Daghlian and corporate partner Harry Keegan have been quoted in the Secondaries Investor article “Is there a place for SPACs in secondaries?” The article looks at how special purpose acquisition companies (SPACs) might be employed specifically in the secondaries market.

According to Secondaries Investor, SPACs raised more than $83 billion last year. As of early this month, the amount raised was already at about $42 billion. Using a SPAC, the article says, allows sponsors to list a company more quickly due to fewer regulatory hurdles and less disclosure. They can also take advantage of a potentially huge source of capital from retail investors, though the article notes that, in the United States, SPACs are only allowed to merge with a single company, not a portfolio of companies.

“[A SPAC] would work for a single asset deal, but I'm not sure it’s ever been done for a portfolio,” said Daghlian. “Having said that, there is so much U.S. capital available, it is worth seeing if the boundaries can be pushed.”

Keegan added that there is no regulatory or structural reason why a SPAC cannot be used to invest in a GP-led deal in the U.K. “If you start by buying a portfolio,” he said, “you could structure it so selling LPs could get listed shares in the acquiring vehicle or do a vendor placing of shares to raise cash to pay to LPs who want a cash out. You could even launch the vehicle on AIM [on the London Stock Exchange] because that is a relatively fast process, then move it up to the main market later.”