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ZEST launches the first Alternative Investment Fund, exclusively focused on US listed SPACs.
"Since the beginning of 2021, about the 80% of new listings in the United States have passed through a SPAC; today there are 400 active SPACs listed on the NYSE and on the NASDAQ, for an aggregate market capitalization of approximately 125 billion dollars. Other 69 SPACs are in the pipeline for registration by the end of Q2, for an additional 17 billion". With these words Antonio Midolo, Portfolio Manager of the Zest US Spac Fund, introduced the launch by Zest of the first European mutual investment fund exclusively focused on Spacs (Special Purpose Acquisition Companies) listed on the American stock exchanges.
The fund aims to exploit the revaluation of these companies, systematically divesting before the completion of the "business combination", which is the reverse merger between a Spac and the acquired company, that brings the company acquired to an automatic listing. The Zest US Spac fund aims to be an innovative investment solution for liquidity, aiming, on one hand, to protect the capital and, on the other, to generate returns characterized by low volatility and decorrelation from the markets.
In 2020, the American SPACs in search of a company to acquire offered average returns of around 4% per year, while those that announced the business combination recorded an appreciation of more than 30%. "The objective of the Fund - adds Midolo - is to diversify its investments in an equally weighted basket of listed Spacs, always exiting before the business combination. When the value of the positions will be higher than the repayment value, the Spac shares will be sold on the market; while, in the event of a flat or negative share performance, the fund will ask for the invested capital plus the interest accrued in the segregated account ".
The Zest US Spac fund will not invest in European Spacs, but only in companies listed in the United States, where, in the last two years, the 45% of new IPOs have passed through a Spac, testifying the substantial benefits of a listing through Spac compared to the traditional process. The Zest US Spac fund is a Luxembourg fund, qualified as a Raif (Reserved Alternative Investment Fund), intended exclusively, by law and by nature, for an audience of institutional and qualified investors (so-called well-informed investors).