Special purpose acquisition company as an alternative investment

Abstract

This Master Thesis aims at enhancing the literature about special purpose acquisition companies and more specifically to focus on post-acquisition returns. SPACs enter the market with the sole purpose of doing a business combination with a private operating firm.Two main approaches for the long-term performance measurement are described. The first one is the buy-and-hold abnormal return technique. In this model, I found negative and significant BHARs that worsen over time.The second technique consists of regressing monthly calendar-time portfolios with a Fama-French 5-factor model and with another 5-factor model to identify potential differences. In either cases, the alphas are negative and strongly significant.