(Bloomberg) — Tidjane Thiam, the former chief executive officer of Credit Suisse Group AG, has lost the backing of fund management giant Pimco for his fintech SPAC.
Pimco, which was one of the financial backers behind the creation of Thiam’s Freedom Acquisition I Corp., has agreed to sell its entire stake in the sponsor vehicle for the blank-check firm to an affiliate of China Bridge Capital, according to a filing Wednesday.
Jamie Weinstein, Pimco’s head of corporate special situations, has resigned from the board of the special purpose acquisition company effective June 6. China Bridge Capital founder Edward Zeng has been appointed as a director in his place, Freedom Acquisition said in the filing.
It’s very rare for one of a SPAC’s early backers to end their involvement after it starts trading. Walking away at this stage is a bold move, particularly as blank-check firms often attract investors based on their sponsors’ credentials.
Sponsors help front the money to set up a blank-check firm and, in return, stand to benefit handsomely from a successful deal. That’s become less of a sure bet as souring sentiment leaves hundreds of SPACs scrambling to find a target in a difficult environment.
Soured Market
Freedom Acquisition raised $345 million in its February 2021 initial public offering after Thiam increased the size of the transaction. It’s seeking a merger with a technology-enabled business in the financial services industry, according to previous filings. One of Pimco’s private funds was part of its sponsor group and committed to buying shares in the IPO.
Pimco’s move shows the sharp turnaround in sentiment from last year, when high-profile investors were flocking to support SPACs from financiers in Europe. Thiam’s blank-check IPO attracted investors including Francois Pinault, the billionaire founder of luxury conglomerate Kering SA.
The listing recorded an oversubscription level in the mid-teens, and about a third of the deal went to rich individuals’ family offices, Bloomberg News reported at the time.
Thiam is executive chairman of the SPAC, which is run by one of his key lieutenants, ex-investment banker Adam Gishen. Freedom Acquisition, which is still hunting for a deal, has until February 2023 to complete a transaction or it will need to return investors’ capital.
Silicon Valley venture capital firm Tribe Capital also announced this week it’s abandoning a SPAC it helped set up. The investment firm will no longer back the sponsor of Tribe Capital Growth Corp. I, which started trading last year and hasn’t found a target yet.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
