Queen's Gambit: Walkers Riding the SPACs Wave

The big story so far this year, and it’s continuing to expand outside the original US base, is SPACs. are indeed big news. Although they have existed for decades on public markets, a tipping point occurred in 2019 when private equity firms began to use SPACs more often, creating an explosion of interest over the past 12 months in this relatively arcane financial instrument. 

High-growth sectors, such as biotech, fintech, healthcare and life sciences are among the most prominent issuers. SPACs have also provided a route to market for businesses ranging from established entertainment and software companies to young, innovative, fast-growing companies, as well as the more speculative transformational developers of electric vehicle technology and flying taxis. But when fund managers, such as Oaktree, Apollo and Cerberus successfully brought SPACs to market, it was a sign that things had really taken off.

For Cayman-based firms such as Walkers, SPACs have also provided rich pickings. The firm’s global managing partner Ingrid Pierce notes: ‘There has been a lot of SPAC activity in the tech space, plus combinations with large PE houses backing these deals. We’ve seen our traditional institutional private equity clients getting involved because there’s so much investor appetite.’ She explains: ‘Part of that has been driven by the amount of capital out there to be deployed. People are just waiting for the right opportunity and then jumping on it.

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CAYMAN ISLANDS
Ingrid Pierce Global Managing PartnerT +1 345 814 4667ingrid.pierce@walkersglobal.com

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