Happy Tuesday, PE Hub readers!
It might seem like the SPAC saga is never-ending, but two merger arbitrage strategists anticipate a market pullback at some point.
DuPont Capital’s Harris Arch said that a SPAC spurred market retreat is welcome and needed. “Pullbacks are healthy; they get rid of the excess.”
The pause will be led by targets that went public too soon and will result in inexperienced sponsor management teams exiting the market.
“In the public market there’s a lot more criticism and they [poorly chosen targets] won’t do as well,” Arch said.
According to Arch’s colleague Daniel Moore, SPAC co-portfolio manager at DuPont, there will be a clear distinction made between SPAC sponsor management teams that have benefitted their shareholders and those that have disappointed. Arch and Moore have participated in SPAC deals for almost two years now.
When it comes to blank check companies, DuPont’s strategy is to establish a position during a SPAC’s IPO offering before a target is found. This means the firm’s portfolio includes a host of premerger SPACs bought at approximately $10 per share.
Check out the full report on PE Hub.
Big sale: Wells Fargo announced the sale of its asset management unit, Wells Fargo Asset Management to to GTCR and Reverence Capital Partners for a whopping $2.1 billion.
The transaction, which is one of the largest asset management deals in a decade, is expected to close in the second half of this year. Wells Fargo will retain a 9.9 percent ownership stake in the business.
The sale includes Wells Fargo Bank N.A.’s business of acting as trustee to its collective investment trusts and all related WFAM legal entities.
That’s it for today! Have a great week, readers, and as always, write to me with feedback, tips and gossip or whatever at firstname.lastname@example.org.