Credit Suisse Is The Top SPAC Underwriter For 2020
Niron Stabinsky is spearheading the charge and with him Credit Suisse has built relationships with some of the most prominent SPAC founders including venture capitalist Chamath Palihapitiya, veteran deal maker and Vegas Golden Knights owner Bill Foley, and real-estate investor Barry Sternlicht.
“Niron has become Mr. SPAC,” said Mr. Foley, who has worked with him on deals for nearly two decades.
The fees bankers can earn throughout the SPAC process include setting up a blank-check firm when it initially goes public, raising money for an acquisition, and advising on target company. for possible mergers. SPACs, IPOs and other share sales last year produced $771 million in revenue at Credit Suisse in the first nine months of 2020.
“They’re perceived as a kingmaker,” said Kristi Marvin, founder of data and research provider SPACInsider.com and a former banker. “Anytime they do a deal, people automatically assume it’s good quality.”
Credit Suisse says ultrawealthy clients want more investment-banking advice to sell companies and raise funding, while rich customers more generally want to replace low-yielding government bonds in their portfolios.
Due diligence on some of mergers with the blank check companies was one of Credit Suisse’ssorespots last year. Luckin Coffee Inc., a Chinese company it helped bring public in 2019, said in April some of its officers fabricated sales, cratering its shares. Another company, Germany’s Wirecard AG , collapsed less than a year after Credit Suisse marketed securities to investors that were tied to the company’s shares.
Mr. Stabinsky said “I do get concerned that if things go badly, it does have a reputational taint for SPACs.”