CHAPEL HILL, N.C., Jan. 26, 2021 /PRNewswire/ -- Chapel Hill, North Carolina-based asset
manager Morgan Creek Capital Management and New York-based fintech company EXOS Financial
today launched the Morgan Creek – Exos SPAC Originated ETF (ticker:
SPXZ), an actively managed ETF with an investment strategy focused
on Special Purpose Acquisition Companies, or SPACs, and the public
companies born from them.
We believe active management should be a key consideration for
those investing in this space.
SPXZ seeks to provide investors with liquid, transparent,
actively managed exposure to a portfolio of the innovative
companies that go public via SPAC mergers. The fund expects to hold
approximately two thirds of its capital in an equal dollar weighted
portfolio of the largest companies to have completed SPAC mergers
over the past three years, and approximately one third of its
capital in an equal dollar weighted portfolio of pre-combination
SPACs.
"We're absolutely thrilled to partner with EXOS to launch SPXZ,"
said Mark Yusko, CEO and Chief
Investment Officer at Morgan Creek Capital Management. "As an
increasing number of the most innovative companies in the potential
'industries of the future' choose
to go public via SPACs, we think it's important to provide
investors with a liquid, transparent, actively managed vehicle to
gain access to those companies of the future."
"We're very excited to be partnering with Morgan Creek on SPXZ,"
said Brady Dougan, CEO at EXOS
Financial. "We see SPACs as an area we can add tremendous value.
One where our experience, knowledge of management teams,
relationships, and a deep understanding of evolving technological
trends is a true differentiator."
SPXZ targets the largest 50 pre-combination and largest 50
post-combination SPACs in building its portfolio. "We believe
active management should be a key consideration for those investing
in this space," said Mark Yusko, CEO
and Chief Investment Officer at Morgan Creek, "because
historically, SPAC returns have been bifurcated, with the top deals
performing very well, but the bottom deals performing poorly.
Given the nature of the embedded sponsor incentives in these deals,
we expect this performance bifurcation should continue in the
future."
Sometimes referred to as "blank check" companies, Special
Purpose Acquisition Companies, or SPACs, are investment vehicles
that enable a management team to raise capital via an IPO with the
express purpose of engaging in a business combination with an
operating company. SPAC mergers have increasingly become the
preferred way for many of the most innovative companies from an
increasing number of the potential "industries of the future" to
raise capital and go public, as we believe the structure offers
several advantages over a traditional initial public offering.
The expense ratio of SPXZ is 1.00%.
About Morgan Creek Capital Management
Morgan Creek Capital Management is an asset manager founded by
Mark Yusko, the former CIO of the
University of North Carolina Endowment.
Morgan Creek uses an endowment-like approach to investing,
specializing in targeting opportunistic-focused investments. The
firm has decades of investment experience and relationships around
the globe, and is a thematic investor focusing on important secular
trends such on innovative technology, the wealth transfer to
developing markets, next generation consumers, as well as
demographics and new models in healthcare.
About EXOS Financial
EXOS is a fintech company building a modern institutional
finance platform to disrupt the legacy investment banks. Helmed by
Brady Dougan, the former CEO of
Credit Suisse, EXOS has deep experience and intellectual property
in all aspects of SPACs. With SPXZ, EXOS is bringing its banking,
capital markets, technology expertise, and resources to its first
publicly listed fund.
Carefully consider the Fund's investment objectives, risk
factors, charges and expenses before investing. This and
additional information can be found in the Fund's prospectus and
summary prospectus, which may be obtained by calling (855)
857-2677. Read the prospectus carefully before
investing.
Investing involves risk, including the possible loss of
principal. Shares of any ETF are bought and sold at market price
(not NAV), may trade at a discount or premium to NAV and are not
individually redeemed from the Fund. Brokerage commissions will
reduce returns. Past performance is no guarantee of future
results.
The Fund invests in equity securities and warrants of
SPACs. Pre-combination SPACs have no operating history or
ongoing business other than seeking Combinations, and the value of
their securities is particularly dependent on the ability of the
entity's management to identify and complete a profitable
Combination. There is no guarantee that the SPACs in which the Fund
invests will complete a Combination or that any Combination that is
completed will be profitable. Unless and until a Combination
is completed, a SPAC generally invests its assets in U.S.
government securities, money market securities, and cash.
Public stockholders of SPACs may not be afforded a meaningful
opportunity to vote on a proposed initial Combination because
certain stockholders, including stockholders affiliated with the
management of the SPAC, may have sufficient voting power, and a
financial incentive, to approve such a transaction without support
from public stockholders. As a result, a SPAC may complete a
Combination even though a majority of its public stockholders do
not support such a Combination. Some SPACs may pursue Combinations
only within certain industries or regions, which may increase the
volatility of their prices. The Fund invests in
companies that are derived from a SPAC. These companies may be
unseasoned and lack a trading history, a track record of reporting
to investors, and widely available research coverage.
Post-Combination SPACs are thus often subject to extreme price
volatility and speculative trading. Post-Combination SPACs
may share similar illiquidity risks of private equity and venture
capital. The free float shares held by the public in a
Post-Combination SPAC are typically a small percentage of the
market capitalization. The ownership of many Post-Combination SPACs
often includes large holdings by venture capital and private equity
investors who seek to sell their shares in the public market in the
months following a Combination transaction when shares restricted
by lock-up are released, causing greater volatility and possible
downward pressure during the time that locked-up shares are
released. Because the Fund is "non-diversified," it
may invest a greater percentage of its assets in the securities of
a single issuer or a lesser number of issuers than if it was a
diversified fund. As a result, a decline in the value of an
investment in a single issuer or a small number of issuers could
cause the Fund's overall value to decline to a great degree than if
the Fund held a more diversified portfolio. The fund is new
and has a limited operating history.
Markets have experienced significant periods of volatility in
recent years due to a number of economic, political and global
macro factors, including the impact of the coronavirus (COVID-19)
pandemic and related public health issues. As a result, the
risk environment remains elevated.
Opinions expressed are subject to change at any time, are not
guaranteed and should not be considered investment advice.
The Morgan Creek – Exos SPAC Originated ETF (SPXZ) is advised by
Morgan Creek Capital Management, LLC, sub-advised by Exos Asset
Management, LLC, and distributed by Foreside Fund Services,
LLC.
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SOURCE Morgan Creek Capital Management