TrueMark and RiverNorth Launch SPAC ETF to Incorporate Leverage

RiverNorth Capital Management and TrueMark Investments today announced the launch of the RiverNorth Enhanced Pre-Merger SPAC ETF (NYSE Arca: SPCZ). Trading in the new fund is live today on the NYSE.

SPCZ is an actively managed fund that invests in pre-merger securities of Special Purpose Acquisition Companies (SPACs) whose business plan is to raise capital through an initial public offering and, in a specified period, to engage in a merger or acquisition with one or more unidentified companies. TrueMark Investments will act as an advisor to SPCZ, while RiverNorth will act as the fund’s sub-advisor, responsible for the day-to-day management of the portfolio.

“SPCZ is the first pre-merger SPAC ETF to opportunistically deploy leverage while giving investors access to RiverNorth’s trading strategies and programs that seek to extract value from buying and selling SPAC securities, including units, common stock and warrants,” said Mike Loukas, CEO. of TrueMark Investments, in a press release.

SPCZ primarily invests in pre-merger SPACs that are either seeking a merger target or have not yet finalized a merger with an identified target. Pre-merger SPACs often have pre-determined time frames for completing a combination (usually two years), at which time the SPAC will seek to extend the time frame or liquidate.

Patrick Galley, Portfolio Manager for SPCZ and CEO/CIO of RiverNorth, added in the release: “RiverNorth has deep experience in managing SPAC strategies and we recognize that the value of an SPAC is often before it does. goes through a merger with a private company, the so-called de-SPAC transaction. We are delighted to release this active strategy in a liquid ETF format. »

The fund aims to capture the potential discount, equity upside and pre-merger SPAC interest income. One of the fund’s objectives is to achieve positive absolute rates of return, particularly when measured against the level of risk assumed. SPCZ can be used in the alternative allocation of a portfolio to capture alpha with low correlation to traditional asset classes.

The fund uses leverage opportunistically depending on valuations. SPCZ seeks to increase leverage when stocks are trading below the confidence value and to decrease leverage when stocks are trading above the confidence value. The investment team pays particular attention to the terms and valuation of new issuers relative to the terms and conditions of transactions already traded on the secondary market. The portfolio is adjusted to the best opportunities.

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