Novo Tellus Capital Mulls Joining Singapore SPAC Race

Singapore buyout firm Novo Tellus Capital Partners is considering setting up a special purpose acquisition company to list in the city-state as regulators prepare to authorize the vehicles in the local market, people with knowledge of the matter said.

The technology and industrials-focused private equity firm has had preliminary discussions with banks, said the people, who asked not to be identified as the process is private. The company is awaiting official exchange guidelines before making a final decision, the people said.

Novo Tellus would join Vertex Holdings Ltd., a unit of Temasek Holdings Pte, in seeking to be among the first to launch a blank-check company in the city-state, Bloomberg News reported this week. A SPAC-driven surge in listings would benefit Singapore’s exchange, which has seen just three IPOs this year, raising $242 million in total, according to data compiled by Bloomberg.

Deliberations are ongoing and the firm may decide not to proceed with the vehicle, the people said. A representative for Novo Tellus declined to comment.

Singapore’s exchange consulted the market on a framework for SPAC listings earlier this year. Regulators proposed requirements including a minimum S$300 million ($223 million) market capitalization threshold for listing a blank-check company.

The consultation took place amid a frenzy for SPACs in the U.S. that helped drive first-half global IPO volumes to an all-time record. While about $118 billion has been raised through blank-check firm listings globally so far this year, the trend may be losing steam. SPACs accounted for about 13% of IPO volumes in the second quarter, compared to nearly half the amount raised in the first three months, data compiled by Bloomberg show.

IPOs for SPACs on exchanges outside the U.S. have raised $6.3 billion so far this year, up from $907 million raised in all of 2020, the data show.

Novo Tellus raised $250 million for its second Southeast Asia fund in December, according to its website. The firm’s portfolio includes stakes in Tessolve Semiconductor Pvt., an Indian semiconductor engineering services firm, and Procurri Corp., a Singaporean provider of equipment and services to data centers.

©2021 Bloomberg L.P.

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