Goldman Sachs creates SPAC team in Hong Kong amid surging Asian interest in blank-check companies

Goldman Sachs creates SPAC team in Hong Kong amid surging Asian interest in blank-check companies

Goldman Sachs has created a SPAC team in Hong Kong dedicated to handling the surge in blank-check deals that have emerged in the Asian region.

The strategic team was set up last year but was not made public, according to Reuters. SPACs - short for special purpose acquisition company - gained traction in Asia moving in step with the frenzy in the United States although with less volume.

Raghav Maliah, the global vice-chairman of Goldman Sachs' investment banking division, leads the team alongside Vikram Chavali and Edward Byun, Reuters reported.

SPACs, which are shell companies seeking to merge with private companies with the intention of taking them public, have since taken off given. Proponents cite their simplicity and lower cost.

Regulators however have publicly expressed caution over the recent SPAC mania. On Thursday, acting SEC Chair Allison Herren Lee said that SPAC returns don't warrant the "hype" they're getting. The agency also released an investor alert that specifically warned of the risks involved with celebrity-backed SPACs.

SPACs have been around for more than a decade but have since recently boomed. In 2019, a total of 59 SPACs raised $13.6 billion in the US, according to SPAC Analytics. The figure quadrupled to 248 in 2020 and