Here's what to know on the risks and rewards of pipe investing скачать в хорошем качестве

Here's what to know on the risks and rewards of pipe investing

CNBC's Leslie Picker reports on the risks and rewards of pipes and the investor incentives with Asim Grabowski-Shaikh of BakerHostetler. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi For most investors these days, it’s literally a “PIPE dream.” PIPEs, or private investments in public equity, are mechanisms for companies to raise capital from a select group of investors outside the market. But as PIPEs are increasingly being deployed in conjunction with a surge in SPAC mergers, a larger group of fund managers are seeking access to this security, with limits on who and how many can invest. While SPACs, or special purpose acquisition companies, will tap the public markets to raise capital to fund a future takeover, PIPEs are allocated to a small group of investors. Managers of the funds participating in the PIPE will sign a non-disclosure agreement, with trading restrictions, and are brought over a proverbial “wall,” where they’re given material, non-public information from the SPAC about which target they’re looking to acquire. They’re then allowed to choose whether or not they want to invest at the SPAC’s IPO price — or sometimes at a discount — and ride what they’re hoping is a pop when that takeover is announced. Bankers from several firms have told CNBC they’ve received an uptick in inbound interest recently from investors looking for future PIPE opportunities. “Many of these transactions are performing very well, and have been well-received in the post-announcement period,” said Warren Fixmer, who runs SPAC Equity Capital Markets at Bank of America. “So the alpha generation that it represents obviously is attracting a broader group of investors.” In 2020, PIPEs generated $12.4 billion in supplemental capital to help fund 46 SPAC mergers, according to data pulled by Morgan Stanley. Their data looked at SPAC deals with valuations greater than half a billion dollars. On average, PIPE capital added almost triple the purchasing power to the SPAC, Morgan Stanley said. For every $100 million raised through a SPAC, a corresponding PIPE added another $167 million, the data showed. » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-n... Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC https://www.cnbc.com/select/best-cred... #CNBC #CNBCTV