In The News - HedgeWeek - Lee Robinson’s Altana Wealth steps into the SPACs surge with new launch

Altana Wealth, the credit, currencies and special situations-focused hedge fund led by industry veteran and former Trafalgar Asset Managers co-founder Lee Robinson is gearing up to launch a new strategy that will capitalise on the fast-growing SPAC sector.

By Hugh Leask

SPACs, or special purpose acquisition companies, raise capital from investors, via IPOs, to buy shares in private companies, with a view to taking them public, typically through a merger with the publicly-traded SPAC.

Shareholders can then either choose to participate further with the merger as an investor, or redeem stock for the cash held in escrow following a takeover – an event driven optionality Robinson sees as “highly attractive.” Should no takeover targets be found within two years, the SPAC dissolves, with cash returned to investors. 

Altana’s new strategy will aim to capitalise on the burgeoning SPAC sector by building a diversified portfolio of SPACs, investing at, or near, cash value – both in the IPOs and on the open market. The fund will also try to bolster returns by trading detached warrants before or after a de-SPACing announcement, as well as strategically trading SPACs in volatile downside periods during the de-SPACing process, among other things.

“If you can be involved in the IPOs, if you can be trading around the regular SPACs, the more expensive SPACs, and you can be involved in that de-SPACing period where there’s optionality to enter the new deal or the newco, or take your money back, then those series of options, in our opinion, can be exploited with very little risk,” Robinson tells Hedgeweek of the broad spectrum of opportunities. 

“There’s also very little timing risk because you’re often only holding them for a few days from the vote date to the new company listing.”

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