Asian hedge funds, including Sylebra Capital Management and Aspex Management, are joining the SPAC craze in an attempt to find and profit from the next "Southeast Asia DiDi Global Inc." Grab.

Grab Holdings, Southeast Asia's largest ride-hailing and catering distribution company, will merge with US SPAC-type company Altimeter, valuing Grab at close to $40 billion and is expected to go public.

As a result, the world's largest SPAC deal took place.

In the past few months, Sylebra Capital Management and Aspex Management have injected hundreds of millions of dollars through PIPE with Snow Lake Capital and Diamond Asia Capital to conduct SPAC transactions.

Since November, Sylebra Capital Management has been involved in five SPAC transactions at a cost of $580 million.

PIPE (Private Investment in Public Equity) is a common way for most Asian funds to participate in SPAC transactions recently, which is characterized by the fact that investors can buy shares in listed companies at a certain discount rate of the market price.

Dan Gibson, chief investment officer of Sylebra Capital Management, said:

Compared with the traditional IPO program, SPAC's listing process allows us to expand our participation in the early stages of these companies.

However, Mark Uhrynuk, a partner at Mayer Brown (Hong Kong), points out that PIPE transactions allow institutional investors to buy shares at a discount, but there is usually a lock-up period, thus reducing liquidity.

If the share price starts to fall immediately after the merger, the inability to liquidate your holdings quickly could be a problem.

For example, after a strong rebound this year, Churchill Capital Corp. IV has fallen to about $22 from a high of nearly $65 in February.

Sylebra Capital Management's $200m Aeva project, which surged to a high of nearly $22 in February, has fallen to about $11, little changed from the $10 it was when SPAC went public.

Clearly, this has not stopped the enthusiasm of hedge funds.

According to NASDAQ, a total of 237 companies went public through SPAC in 2020, raising nearly $80 billion.

The popularity of SPAC prompted SEC to issue new accounting standards for SPAC warrants and warned that SPAC warrants could not bypass securities trading rules.