Wall Street's US$100b SPAC boom upends league tables

New York

THE blank-cheque listings craze is shifting fortunes on Wall Street, knocking some of the world's biggest banks off their perches and bringing unexpected bragging rights for others unaccustomed to competing for league-table glory.

Cantor Fitzgerald LP, long one of the top underwriters for special purpose acquisition companies (SPACs), has been the biggest beneficiary of the boom and ended the first quarter as the No 10 adviser on initial public offerings (IPOs) globally.

The boutique, which has not ranked that high for any full year in the past decade, got 99 per cent of this year's deal credit from blank-cheque work, data compiled by Bloomberg showed. Without those deals, it would be 155 places lower.

SPACs raised US$100 billion in the opening three months, equivalent to more than two-thirds of the haul from all US listings.

That meant league table spots were heavily affected by a bank's expertise in a once-niche part of the market that has suddenly ballooned in popularity.

Citigroup jumped six spots in the rankings to become the busiest IPO arranger globally in the first quarter, thanks in part to its status as the No 1 SPAC underwriter. Rival Bank of America rose nine places from this time last year to No 6.

On the flip side, Switzerland's UBS Group and four Asian investment banks - China International Capital Corporation, Citic Securities, China Securities Co and Sinolink Securities Co - all dropped out of the top 10.

There was a chance to boast for firms further down the tables too. Though they still ended a way off the top, both Oppenheimer Holdings and BTIG LLC - niche players in the world of equity capital markets - saw their IPO rankings boosted by more than 100 spots thanks to roles on SPAC listings this year, the Bloomberg data showed.

To be sure, investment banks that are too dependent on SPAC listings could be caught flat-footed when volumes dry up, and signs are already emerging that these deals will not maintain their breakneck pace.

Last week, blank-cheque companies filed plans to raise a combined US$8.4 billion through US IPOs, down 36 per cent from the previous week. Their combined fundraising target, as well as the number of deals, both represented the lowest weekly tally since the end of January.

On Wednesday, for the first time in a long while, there were no new SPACs that lodged registration documents.

The brief drought marked a big change from recent months, when particularly prolific dealmakers were filing for three IPOs in a single day.

For now at least, some banks have something new to shout about with rivals and clients. BLOOMBERG