2021 – a Jekyll and Hyde year for SPACs

SPACs were the darling of Q1 2021 with 298 SPACs raising a total of USD88 billion, exceeding the USD76 billion raised in the whole of 2020 and representing a 2,200% increase year on year versus Q1 2020. In comparison, since 1 April 2021 only 20 SPACs have priced with commentators now questioning the market for SPACs. In this article we offer our views on why this has happened and look ahead to the future for SPACs and what may happen next.

Related briefings

Isle of Man – extension of economic substance requirements to partnerships and limited liability companies

The Income Tax (Substance Requirements) Order 2021 was approved by Tynwald on 16 June 2021. This Order extends the scope of the economic substance rules in Part 6A of the Income Tax Act 1970 to cover partnerships, including limited partnerships both with and without legal personality, and limited liability companies (LLCs). The expanded rules will apply to accounting periods commencing on or after 1 July 2021.

Economic substance Q2 2021

Since our Q1 update, important developments have occurred with respect to the applicability of the economic substance regime. Specifically, amendments are proposed that will bring partnerships (or, in the case of Bermuda, more types of partnerships) into scope.

Solvency statements under Companies (Jersey) Law 1991 – is it time to go paperless?

In April of this year, the Royal Court of Jersey considered the practicalities around the making of a solvency statement pursuant to the Companies (Jersey) Law 1991, as amended. The judgment handed down in the matter of Crystal Lake Investments Limited (2021: JRC104) may well change the way in which these statements are documented in practice going forwards and also serves as a timely reminder to Jersey boards to ensure an appropriate paper trail supports decisions made.

Trustee knowledge series: Advanced paper one: adding and excluding beneficiaries

Offshore trusts often include provision for the addition, appointment and removal of beneficiaries, to provide flexibility for the future and to “arm the trustees with a weapon which will enable them to consider all developments and respond to all future mishaps and disasters”. Without the benefit of a crystal ball, settlors cannot predict if a change in future circumstances may mean certain persons either need to be added to the class of beneficiaries or removed from the existing class. This paper is intended to give an overview of the relevant powers of addition and removal to be taken into account before exercising the powers and some of the common issues that may arise in relation to exercising the powers.

Latest Briefings

Employee ownership: getting the best from your trustees

When a business chooses to transition to employee ownership (EO), a trust must be established for the benefit of the employees of the company. The trust becomes the legal owner of the company shares, and the trustees are appointed to the board of that trust. Their role is to protect the interests of the employees as shareholders.

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