Financial Times
Emma Dunkley, Brooke Masters
10 June 2022
https://www.ft.com/content/37a4249c-c512-42a7-bdcf-4417d455477d
Tidjane Thiam’s investment vehicle has parted ways with Pimco, claiming to have found “a better fit” in Chinese entrepreneur Edward Zeng.
Freedom Acquisition Corp, a special purpose acquisition company led by ex-Credit Suisse chief Thiam as executive chair, floated in February 2021 and has yet to identify a private company to merge with.
The loss of the world’s largest bond manager was revealed in a regulatory filing this week, which showed that Pimco had agreed to offload its entire stake in the sponsor vehicle to Next G, an affiliate of Zeng’s advisory firm China Bridge Capital. Zeng has also been appointed as a director to replace Jamie Weinstein, Pimco’s head of corporate special situations.
Freedom’s chief executive Adam Gishen said it took the decision. “We actively managed the replacement of Pimco by Edward Zeng as our co-sponsor,” said Gishen, a former investment banker at Credit Suisse.
“We believe Zeng’s involvement — with his proven track record of creating value through Spacs — is a better fit for Freedom and its investors in the current environment. We remain focused on doing a deal — at the right price — as promised to our investors.”
Pimco declined to comment.
Spacs are shell companies that list on stock exchanges and use the proceeds to hunt for private companies they can acquire and take public through a reverse merger. Most are required to complete a deal within two years of their initial public offering or return the money raised to investors.
Freedom shares are trading at $9.81, below the $10 float price.
Freedom raised $345mn in its initial public offering on the New York Stock Exchange in early 2021. The vehicle, which focuses on fintech, counts François Pinault, the French billionaire who founded luxury group Kering, among its investors.
The Spac is Thiam’s first move in financial services since his departure from Credit Suisse in 2020. He is among a number of bank chiefs who have launched blank-cheque vehicles, including former UniCredit boss Jean Pierre Mustier.
The boom in Spacs has receded in recent months. Rising interest rates and the prospect of tougher regulation from the Securities and Exchange Commission have spooked investors and made some investment banks reluctant to work with the vehicles.