As we enter the last quarter of 2017, we continue to see strong investor interest in private equity. The year appears on track to set records for fundraising, particularly with the closing of a number of very large funds this year. The challenge remains for fund managers to deploy their dry powder in a period marked by high valuations.
One trend we have witnessed is the resurgence of the use of “special purpose acquisition companies,” or SPACs. The popularity of SPACs waned after the financial crisis, as a result of uncertainty in the equity capital markets and a decline in M&A activity. PE sponsors are now increasingly using SPACs to supplement the traditional PE investment model and tap into public markets for a permanent source of equity. In this issue, we take a closer look at the benefits to PE of the SPAC model and explain how the SPAC offering process works.
We also explore four other recent developments impacting PE fund structuring and compliance programs:
- A potentially game-changing US tax decision that could affect how non-US investors invest in US funds
- Developments in Brexit and European regulatory changes
- Regulatory scrutiny on the financial services sector and increased global coordination in the enforcement of anti-bribery/anti-corruption laws
- BEPS—the global move towards new base erosion and profit shifting rules that will impact fund structures
We wish you good reading!