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Sales view: As special purpose acquisition companies (SPACs) have been popular fundraising vehicles in the US, Asian exchanges are also admitting these new asset class to add depth and diversity in our markets. Globally, SPAC deals have risen 20-25% to US$940-979b in 2021. This rising momentum is expected to spill over to 2022 where a high percentage of current deals will come from technology, media, and telecom, comprising car tech, fintech and e-commerce. UBS M&A head cited about 40 SPACs in Asia and expects further tech unicorns to undergo SPAC deals in Asia.

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SGX is on route to be the first Asia bourse to list SPACs and I agree with Dealogic that “the first few SPACs in Asia will be a test of investors’ appetite, the market needs to understand if investors would be comfortable to invest without the same level of access to the issuer and scrutiny”

To help investors navigate this new territory, Sachin and team’s report covers SGX SPAC framework, compares these with US SPACs and offer useful tips to assess SPAC deals.

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In a nutshell, key considerations for investors are:

Sponsor qualification & network

Point of entry matters for investors

Alignment of interests between Sponsors and investors is key

Commitment levels by Sponsor

Deals due diligence when deciding to stay invested in the SPAC and/or redeem one’s shares

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