• Charles Heighton

Perella Weinberg Partners is supposedly going public via a SPAC



By Charles Heighton – The London Financial Markets Editor and VP of Trading at King’s Global Markets


Perella Weinberg Partners is a boutique investment bank that has been around since 2006. Founded by two titans of the industry, the firm has been a leading advisor since its inception. Although it has lost a significant number of senior team members this year. PWP was going to file an IPO back in 2018, but this never came to fruition. Rumours are now suggesting that they have turned to a SPAC to list.


The oddity here is the alleged use of a SPAC. PWP is not a market-disrupting fresh start-up, it is an established and leading boutique in a decade's old industry. Many of its boutique competitors are listed and they did it via IPO’s, not a SPAC. If this is to seal PWP as an established icon of investment banking, then it seems reckless to endanger that legacy on the hit and miss approach that is a SPAC merger.


It is important to note that this is all rumoured and has not been confirmed by PWP, although the partners have supposedly been briefed and talks are apparently advanced. The SPAC in play has not yet been leaked but if it is, the reaction might be interesting. PWP is a solid business, it is obvious why a SPAC would want to merge with it. However, the SPACs investors might have been looking for a disruptive tech business rather than a profitable but rather mundane investment bank.


The appeal from PWP’s side is less obvious. This might just be a way for the company to list quickly, securing wealth for its 64 partners. Perella himself has the most to gain from this listing but most of the partners will see their wealth likely increase exponentially. The suggested date is early next year so the windfall will be swift.


While it is not the perfect comparison, the IPO of Goldman Sachs just before the new millennium netted an average of $54 million for GS’s 221 partners. Hank Paulson, the CEO, and chairman at the time received an estimated $180 million. You can see why listing appeals. Although, Goldman listed at a valuation of $30 billion, so the sums should be significantly smaller, as PWP is allegedly aiming for a $1 billion valuation. This listing will not include the asset management business.


My opinions on SPAC’s can be found in other articles and do not belong here. While I do believe that it is a good idea for PWP to list, I am shocked that this is the approach they seem to be taking. Perhaps they want to join the prestigious ranks of other SPAC targets like Playboy, Nikola, and Multiplan. Perhaps there is a method hidden in this madness. It may be led by practical concerns, as this is probably the swiftest way to access the public markets. Either way, you have to respect the deal if it goes ahead. PWP is a gem of a business for a SPAC compared to most of this year's mergers, and one that might even be a tempting investment. Although I would be surprised if all the SPAC investors felt this way.


Sources:

https://news.efinancialcareers.com/uk-en/3004864/perella-weinberg-spac

https://www.reuters.com/article/us-perella-weinberg-ipo/perella-weinberg-to-seek-ipo-through-blank-check-firm-source-idUSKBN27Z37Q

https://www.ft.com/content/f8c30ba5-7624-4fcb-8e2c-04ad63ad669f



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