- Data on the Data
- Episode 4: Will SPACs surge in Europe?
Data on the Data
Episode 4: Will SPACs surge in Europe?
In this week’s episode of Data on the Data, David Craig, Group Head, Data & Analytics and CEO, Refinitiv at LSEG and Oliver Hetherington of Refinitiv, look at the US surge in the listings of SPACs compared to the very low levels of activity in Europe. Data usage, however, shows that the European investor appetite for these vehicles is as strong as it is in the US. Is the time now right for Europe to join the SPAC Age?
The content and information (“Content”) in the video programs (“Video Programs”) is provided for informational purposes only and not investment advice. You should not construe any such Content, information or other material as legal, tax, investment, financial, or other professional advice nor does any such information constitute a comprehensive or complete statement of the matters discussed. None of the Content constitutes a solicitation, recommendation, endorsement, or offer by Refinitiv or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature, is illustrative only and does not address the circumstances of any particular individual or entity. Refinitiv is not a fiduciary by virtue of any person’s use of or access to the Video Programs or Content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content in the Video Programs before making any decisions based on such information or other Content. In exchange for accessing and viewing the Video Programs and Content, you agree not to hold Refinitiv, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other Content made available to you through the Video Programs.
The Content and information in the Video Programs has been obtained from sources believed to be reliable, but Refinitiv makes no representation or warranty as to the accuracy, timeliness or completeness of the Content. Any opinion or recommendation expressed in the Video Programs is subject to change without notice. Refinitiv does not recommend, explicitly nor implicitly, nor suggest or recommend any investment strategy. Refinitiv disclaims all liability for any loss that may arise (whether direct, indirect, consequential, incidental, punitive or otherwise) from any use of the information in Video Programs. Refinitiv does not have regard to any individual’s, group of individuals’ or entity’s specific investment objectives, financial situation or circumstances. Refinitiv does not express any opinion on the future value of any security, currency or other investment instrument. You should seek expert financial and other advice regarding the appropriateness of the material discussed or recommended in the Video Programs and should note that investment values may fall, you may receive back less than originally invested and past performance is not necessarily reflective of future performance
[00:00:06] Hi, I'm Oliver, Director of Customer Analytics at Refinitiv, and welcome to 'Data on the Data'. SPACs or Special Purpose Acquisition Companies, are the buzzword in the financial markets at the moment. Having raised around 10 billion US dollars prior to 2020, we've seen explosive growth since then, continuing into 2021. Also known as 'blank check' companies, they offer an investor greater speed, flexibility and price certainty when compared to IPOs, especially in this pandemic time. On the face of it, it looks like a US craze driven by Silicon Valley investors riding the wave of their tech investments over the last couple of years. Whilst amounts raised are heavily skewed toward the US, Refinitiv's David Craig explains that interest in SPAC's is far more geographically diverse than that number implies.
[00:00:57] Thanks, Ollie. SPACS raised over 70 billion dollars in the US last year, nearly seven times more than the previous year, and we're already approaching that figure just barely three months into 2021. These numbers, of course, dwarf what's been raised in Europe, barely two billion dollars last year. So it does feel like SPACs are an exclusively US phenomena. But then look at the SPAC data usage across our platforms. We're finding that European investors are just as hungry for data on specs as their US counterparts. In fact, among asset managers, activity in Europe has been higher than anywhere. By contrast, in the US, and this is where we're seeing some fascinating differences, there in the US, the strongest interest is from the brokers and dealers. So this could suggest that the US is benefiting from both the listing opportunity as well as the investment demand. What's the take-home for me? That the European market's appetite for SPACs is just as strong. So should they emerge in Europe, the demand seems to be there. It's clear from the capital figures raised that the US is the dominant force within the SPAC landscape, and where retail investors in the US have been given that chance to participate in more venture capital style investments. This could mean more volatility, but it's an opportunity that European investors are embracing. And that appetite could eventually increase the size and scale of European listings and start to close the gap with the US. And I think a really good question is if that SPAC boom does take off in Europe, could it fund the innovation and investment that Europe so badly needs or will it just not materialize? Whatever happens, I think the data shows us that the investor demand from Europe is certainly there.
[00:02:33] Thank you for watching 'Data on the Data'. Don't forget to subscribe so you never miss an episode. See you next time.