RiverNorth Capital Management, LLC and TrueMark Investments
today announced the launch of the RiverNorth Enhanced Pre-Merger
SPAC ETF (SPCZ), trading on the NYSE. SPCZ is an actively managed
Fund that invests in pre-merger securities of SPACs (Special
Purpose Acquisition Companies) whose business plan is to raise
capital in an Initial Public Offering (IPO) and, within a specific
period, engage in a merger or acquisition with one or more
unidentified companies. Trading in the new Fund is live today.
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“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 derive value from
buying and selling SPAC securities including units, common shares,
and warrants,” said Mike Loukas, CEO of TrueMark Investments, which
will act as Adviser to the Fund.
“RiverNorth has deep experience running SPAC strategies and we
recognize that the value of a SPAC is often before it goes through
a merger with a private business, the so-called de-SPAC
transaction,” said Patrick Galley, Portfolio Manager for SPCZ and
CEO/CIO of RiverNorth. RiverNorth is the Fund’s Sub-Adviser, with
day-to-day portfolio management responsibility. “We are excited to
bring this active strategy to market in a liquid ETF format.”
The Fund invests primarily in pre-merger SPACs that are either
seeking a target for a combination or have not yet completed a
combination with an identified target. Pre-merger SPACs often have
predetermined time frames within which to consummate a combination
(typically two years) at which time the SPAC will seek to extend
the time frame or liquidate. The Fund aims to capture the potential
discount, equity upside, and interest income of pre-merger SPACs. A
goal of the Fund is to achieve positive absolute rates of return,
particularly when measured against the level of risk assumed. The
Fund can be utilized in the alternatives allocation in a portfolio
in an effort to capture alpha with low correlation to traditional
asset classes.
The Fund employs leverage opportunistically based on valuations.
SPCZ seeks to increase leverage as shares trade below trust value
and reduce leverage as shares trade above trust value. The
investment team pays particular attention to the terms and
valuation of new issuers vs. the terms and conditions of deals
already trading in the secondary market; the portfolio is adjusted
for the best opportunities.
About RiverNorth Capital Management, LLC
RiverNorth Capital Management, LLC is an investment management
firm founded in 2000. With $5.7 billion1 in assets under management
as of May 31, 2022, RiverNorth specializes in opportunistic
investment strategies in niche markets where the potential to
exploit inefficiencies is greatest. RiverNorth is an institutional
investment manager to registered funds, private funds and
separately managed accounts.
1. Includes assets attributable to leverage and investments in
affiliated funds.
About TrueMark Investments
At TrueMark, we serve investors with ETFs that seek to deliver
true exposure to thematic, modern economy asset classes,
strategies, and industries. We pair investment expertise with
industry knowledge and experience, partnering with 3rd parties we
believe are specialized, highly qualified industry experts to power
investment management decisions, all at a price comparable to
passive management.
New Fund Risk. The Fund is a recently organized
investment company with no operating history. As a result,
prospective investors have no track record or history on which to
base their investment decision.
Leverage Risk. The use of leverage is speculative could
magnify the Fund’s gains or losses and increase risk. This is the
speculative factor known as leverage. Borrowing also may cause the
Fund to liquidate positions under adverse market conditions to
satisfy its repayment obligations. Borrowing increases the risk of
loss and may increase the volatility of the Fund.
Pre-Combination (Pre-Merger) SPAC Risk. The Fund invests
in equity securities and warrants of SPACs. Pre-combination SPACs
have no operating history or ongoing business other than seeking
Combinations, and the value of their securities is particularly
dependent on the ability of the entity's management to identify and
complete a profitable Combination. There is no guarantee that the
SPACs in which the Fund invests will complete a Combination or that
any Combination that is completed will be profitable. Unless and
until a Combination is completed, a SPAC generally invests its
assets in U.S. government securities, money market securities, and
cash. Public stockholders of SPACs may not be afforded a meaningful
opportunity to vote on a proposed initial Combination because
certain stockholders, including stockholders affiliated with the
management of the SPAC, may have sufficient voting power, and a
financial incentive, to approve such a transaction without support
from public stockholders.
Some SPACs may pursue Combinations only within certain
industries or regions, which may increase the volatility of their
prices. In addition, the Fund may invest in vehicles formed by SPAC
sponsors to hold founder shares, which may be subject to forfeiture
or expire worthless and which generally have more limited liquidity
than SPAC shares issued in an IPO. In addition, the Fund may invest
in vehicles formed by SPAC sponsors to hold founder shares, which
may be subject to forfeiture or expire worthless and which
generally have more limited liquidity than SPAC shares issued in an
IPO.
Foreign Securities Risk. Foreign SPACs Investments in
SPACs domiciled or listed outside of the U.S. may involve risks not
generally associated with investments in the securities of U.S.
SPACs, such as risks relating to political, social, and economic
developments abroad and differences between U.S. and foreign
regulatory requirements and market practices. Further, tax
treatment may differ from U.S. SPACs and securities may be subject
to foreign withholding taxes.
Small-Cap Risk. SPACs will have a more limited pool of
companies with which they can pursue a business combination
relative to larger capitalization companies. That may make it more
difficult for a small capitalization SPAC to consummate a business
combination.
Liquidity refers to the efficiency or ease with which an asset
or security can be converted into ready cash without affecting its
market price.
Distributor: Foreside Fund Services, LLC.
Before investing, carefully consider the TrueShares ETFs
investment objectives, risks, charges and expenses. Specific
information about TrueShares is contained in the prospectus and a
summary prospectus, copies of which may be obtained by visiting
www.true-shares.com. Read the prospectus carefully before you
invest.
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version on businesswire.com: https://www.businesswire.com/news/home/20220711005909/en/
Matthew Yemma (myemma@peaksstrategies.com, 909-633-9396)
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