Sign of the times: It really is shaping up to come to be the hottest year in ten years to improve investor money for corporations in the development stage without specific business plan or perhaps purpose.
This week, a former hedge fund manager and a former property executive are raising $500 million to search for buyouts in the “blank check company” in the hospitality and property sectors.
Landscape Acquisition Holdings, go by Person GLG founder Noam Gottesman and ex – Vornado President Mike Fascitelli, could begin trading found in London as soon as this week. Both are putting $40 million of their own cash in to the blank check organization and raising the others from outside investors.
It shows up the same week mainly because former Procter & Gamble executives plan their $345 million Legacy Acquisition to begin trading found in the U.S., centered on snapping up corporations in consumer packaged merchandise, food, retail and restaurant sectors.
Blank check companies, also called exceptional purpose acquisition companies, raise money from investors initial and make usage of it to buy companies down the road, usually within a specified period range. They are often run by ex – executives of the market or sector they goal. Up to now this year, 27 of these have begun trading in the U.S., increasing $7.7 billion, the most active year since 2007, according to Renaissance Capital.
Low rates of interest and high market valuations are making hedge funds and different investors itch for opportunities. Blank check companies certainly are a place for them to put cash and hope to reap any gains if the firms are successful, but recover their cash if the companies neglect to find suitable investments.
In September, ex – Facebook executive Chamath Palihapitiya rolled out a $690 million blank check company dedicated to investing in a Silicon Valley “unicorn” and taking it public.
The largest this season was the $1 billion raised by Silver Run Acquisition Corp., according to Dealogic. Silver Go is managed by ex – Anadarko Petroleum CEO James Hackett to give attention to discounts in the energy sector. It lately struck a offer to combine with two Houston-area corporations.
The former CEO of Starwood Resorts, Steve Heyer, recently raised $300 million for Haymaker Acquisition Corp., to check out deals in consumer-related products and services. And the private equity firm TPG raised nearly $700 million for its TPG Pace Energy Holdings earlier this season, to be run by ex – Occidental Petroleum CEO Stephen Chazen.
Last year, exceptional purpose acquisition companies were 3 percent of overall IPO volume, in accordance to Dealogic, the best percentage since 2008 as global IPO volume fell. Exchanges have already been fighting for the business enterprise as well, with Nasdaq lately proposing rule adjustments to make listing a blank check organization there easier.
Gottesman is the ex – chairman and co-CEO of GLG Companions, a hedge fund sold to Person Group in 2010 2010. He’s also the co-founder of Nomad Food, billed as Europe’s major frozen foods organization, and TOMS Capital, owner of the New York restaurant Eleven Madison Park in addition to the restaurant at the NoMad Hotel.
Fascitelli is the ex – president and CEO of Vornado Realty Trust, a real estate giant that owns Chicago’s Merchandise Mart and One Penn Plaza in NY, among other houses. Both will be alumni of Goldman Sachs.
The range of Landscape Acquisition’s potential discounts includes hotels, resorts, restaurants and gaming. The original public offering is being managed by Morgan Stanley, Credit rating Suisse and Goldman Sachs.