The ex-UBS top executive tells finews.com why he's convinced on the value of back-door public listings and how he chose Amsterdam for his SPAC, due to be listed by month-end.

Martin Blessing, EFIC1 describes itself as Europe's first SPAC focused on fintech in Europe, Britain, and Israel. Why are you participating in the boom in SPACs?

It was a group decision to launch a SPAC. I'm extremely interested in financial sector developments anyway – and I've always found new distribution channels interesting, even as CEO of Advance Bank back in 2000, later as chairman of Comdirect or at UBS Switzerland, I spent a lot of time on digitization. The opportunity to help young, growing firms find capital and later, to establish a public listing is enticing. 

You're working in a small team, after always working for big corporates.

Yes, I've spent the last 20 years trying to make big companies move faster. Now it's the other way around: I'm trying to make fast-moving companies bigger.

The U.S. is way ahead of Europe in SPACs. Was it necessary to launch of your vehicle to illustrate that European trading centers aren't falling hopelessly behind?

It's undeniable: most financial innovation begins in the U.S. Europe's approach of evaluating and clarifying whether it makes sense to replicate here is a legitimate one.

«SPAC wouldn't work on Swiss exchange»

We view European fintech as very promising and we want to create opportunities. Fintechs will need capital to grow and it would be a shame if they sought a listing in New York.

How did you choose Amsterdam?

We looked at different European trading venues in terms of our needs and those of our investors. Our focus was to make use of as many components unique to SPACs as possible, and to meet investors who are experienced with the vehicles. We needed an exchange with ample liquidity, and interesting for technology firms. Amsterdam is also a good environment for mergers and acquisitions – and part of our team is already based there.

Did you look at Switzerland's SIX Exchange?

SIX requires a firm be at least three years old before it can list. A SPAC is set up entirely differently, so it wouldn't work on the Swiss exchange.

What fintechs and subsectors of fintech are interesting to list via SPAC?

I can't discuss potential companies before a SPAC listing, but we looked at Europe's fintech world very closely. And we've communicated that we're interested in fintechs with at least 1 billion euro ($1.2 billion) in valuation.

You're including Britain and Israel – Switzerland too?

Of course, Switzerland is one of our target markets. The Swiss market is interesting because of potential investors, also for long-term hold investors. And not least, our global coordinator is a Swiss bank – Credit Suisse.  

Why not UBS, your former employer? 

The choice of global coordinator was a structured process: Credit Suisse was the most persuasive in a beauty contest.

The U.S. and China remain the world's biggest fintech markets. How would you judge the European fintech sector? 

We've seeing a lot of very interesting fintech launches in Europe. One of the challenges for start-ups is they usually launch in a smaller market than the U.S. or China.

«Help fintechs list – and then expand»

And to build a European business out of their home market is challenging and complex, which in turns hampers their pace of growth.

They still have that problem after listing publicly.

That's why we've put together a team with a lot of industry experience and which has worked within various specific geographical regulatory requirements. In that respect we can provide support to help a fintech grow and expand. 

So your SPAC will chaperone and support companies operationally, like in private equity?

Our value creation is not just to provide a vehicle to list, but the know-how of our team. And beyond merely due diligence or merger and acquisition negotiations. Our goal is to create long-term value for investors, initially via listing, then by further developing the listed companies.

Ten weeks into 2021, the volume of SPACs had already reached that of last year.  Are the traditional channels inadequate in placing such ample liquidity with investors?

The SPAC boom hasn't fully taken off in Europe – the U.S. is in an entirely different place. But in general SPACs are an additional instrument in the toolkit of capital markets.

«Sometimes you want a screwdriver, other times a power drill is more practical»

Imagine a power drill: it doesn't replace a screwdriver, but it's more practical and faster for some things. SPACs are a bit like a fast-moving elevator, while a traditional listing would be the escalator. SPACs also offer a lot more flexibility in their design – that's why they're attractive for companies too.

SPACs also seem to be attractive to bankers like yourself: your former boss Sergio Ermotti, ex-Credit Suisse CEO Tidjane Thiam, and ex-Unicredit boss Jean Pierre Mustier are all planning SPACs. Do they require the know-how of bank CEOs? 

It's a bit more nuanced in the U.S., where successful SPACs have been founded by venture capital specialists, while others are from private equity or investment banking – then there are SPACs which are building on the experience of a former CEO. We've tried to bake all four components into our team. As a former CEO of course my experience in capital markets, compliance, and regulation – as well as my network in finding investors – is useful.

There's also a lot of criticism of SPACs as a lucrative business for financiers while the success for investors isn't as clear-cut. 

We're marketing our SPAC to institutional investors only. Secondly, investors receive all data on the firms which are to be taken over. They can subsequently vote on the transaction at a shareholder meeting.

«Private investors can't invest until listing»

And they can ask for their money to be repaid even after that, regardless of how they voted, if they don't want to invest in the target company – for whatever reason. Private individuals can't invest in the company until it is listed – just like in a normal stock-listing.

How much interest do investors have in your SPAC?

We've held a lot of meetings with British, American, and European investors in advance, also with some pension funds and family offices. If we didn't receive favorable feedback, I wouldn't be talking to you now (laughs). We're very optimistic that we can list our SPAC by the end of this month.

And what's next after that – another SPAC?

We're focused on listing EFIC1. After that? As a well-known German soccer-philosopher once said, «Let's see».

Martin Blessing was part of UBS' top management until October 2019, first as head of Switzerland and then from 2018 as co-head of the Swiss bank's flagship wealth management arm. The 58-year-old German banker and former Commerzbank CEO now runs EFIC1, a European fintech initial public offering company. It is the first special purpose acquisition vehicle – SPAC – focused on financial technology start-ups.