Former CBA executives at Serendipity Capital bring new SPAC to Asia, Australia

SPACs are coming to the Asia Pacific in a round about way, with the latest being raised by a group including top former CBA executives.

Robert Jesudason (left), and Ian Narev in earlier times when they were CFO and CEO of Commonwealth Bank respectively. Picture: James Croucher

Former Commonwealth Bank executives are behind a new special purpose acquisition company that will target financial services and technology companies across the Asia-Pacific.

Former CBA finance boss and Credit Suisse banker Robert Jesudason, who is Serendipity Capital chief executive and executive director, is spearheading the firm’s move to raise $US250m ($333m) for a New York-listed blank cheque company.

Former CBA chief executive and now Seek boss Ian Narev is a senior adviser to Serendipity Capital and is mentioned in the listing documents alongside a group of 10 other advisers.

Mr Jesudason said his firm was targeting a fourth quarter listing for the new SPAC, and he backed a “more rigorous” assessment of the vehicles by investors. “We are supportive of a more ordered market and higher bar,” he said.

Singapore-based Serendipity Capital brings together a string of well-known financial services stalwarts.

Its chairman is former Manulife executive Stephen Roder. Former Goldman Sachs Australia executive Stephen Fitzgerald and former CBA legal counsel and now AMP board member John O’Sullivan serve as independent board directors.

Serendipity Capital has lodged documents to list the SPAC in the US, and has the option to raise as much as $US287.5m.

It will focus on investments in the Asia-Pacific, and Goldman Sachs is the deal’s underwriter.

SPACs have been a big force in the US market over the past 12 months amid a rush of listings. But some of the hype has subsided in recent weeks, as US regulators tried to stem the flow of retail investors into the sector, some on the back of celebrity endorsements.

Mr Jesudason said the increased caution about SPACs did not affect Serendipity Capital’s listing plans, and said the new entity had restrictions around the transfer of founder shares.

So far this year SPACs have raised $US105.4bn ($140.6bn) globally, easily surpassing the $US81.2bn raised in calendar 2020, according to Refinitiv.

Australia has largely sidestepped the trend because the ASX does not permit SPACs to list here, although it is closely assessing developments.

Moves by Serendipity Capital and others to seek out acquisitions in this part of the world via a SPAC will, however, put local companies on notice.

“While we may pursue a business combination target in any industry, sector, or geographic region, we intend to concentrate our efforts on financial services and technology companies that operate in the financial services sector with a bias towards the Asia-Pacific region,” the Serendipity Capital listing documents say.

“We intend to capitalise on the deep operating and investing experience in financial services and technology of our management team, board of directors and our sponsor in order to pursue attractive investment opportunities.”

Field Research director Stewart Oldfield said the Australian market would be drawn into the SPAC universe.

“Australia has been sheltered from the SPAC phenomenon so far to date but that doesn’t stop companies in the region being targeted as acquisition opportunities by offshore-based SPACs,” he said.

Singapore-based Catcha raised $US275m for a New York-listed SPAC earlier this year. It will include Australia among its target investment markets.

The Serendipity Capital SPAC listing documents highlight the career experience of those involved in the firm, but also outlined potential risks.

“We are a newly incorporated Cayman Islands exempted company with no operating results, and we will not commence operations until obtaining funding through this offering,” the documents say.

“Past performance of our management team, Serendipity Capital Holding Limited, or their respective affiliates may not be indicative of future performance.”

Serendipity Capital as a firm was valued at $US300m at its latest equity capital raising. In December, it participated in a financing round for Cambridge Quantum Computing alongside other investors including Honeywell Ventures, IBM Ventures and JSR Corporation.

An ASX spokesman said the exchange’s focus regarding SPACs was on ensuring the “best outcome” for Australia’s market and investors.

“We have had approaches from parties about our preparedness to consider changing or waiving our anti-cash-box rules to facilitate SPAC transactions. However, the history of cash box companies in Australia has been poor and there are important scale, regulatory and commercial differences between the Australian and US markets,” he added.

“Nevertheless, the structure for SPACs is evolving. We are doing work to consider the opportunity carefully.”

Serendipity Capital’s website says the firm has an internal rate of return of 29.3 per cent since inception last year.

This month, it appointed former Canada Pension Plan Investment Board CEO Mark Machin as a non-executive director.

Tyme Global co-founder and former CBA executive Coenraad Jonker is also a Serendipity Capital senior adviser.

Tyme is among Serendipity Capital’s investments, which also include Pollination, a climate change advisory and investment firm.