Bridges targets $400m IPO to fund acquisition of mystery SDG-aligned company

Impact investor will register a new entity in tax haven the Cayman Islands as part of deal

Note: This article has been updated to clarify that the aquisition is expected to be a company, not an investor, as first stated. Further context around SPACs was also added. 

UK-based impact investment house Bridges Fund Management is looking to raise up to $400m to fund the acquisition of a stake in an unnamed socially-focused company, according to a filing with the Securities and Exchange Commission this week. 

Bridges has partnered with US private equity group AEA Investors to IPO a ‘special purpose acquisition company’ or SPAC. This legal entity, also known as a ‘blank-check company’,  is used to fund the acquisition of a separate company which is not divulged ahead of time to investors.     

Reuters has reported that the SPAC is targeting a “business that is working toward the UN’s Sustainable Development Goals”, while a release described it only as an organisation that aligns with an “impact-driven investment focus and provide attractive risk-adjusted returns”.

The SPAC is named AEA-Bridges Impact Corp, and will be registered in the Cayman Islands. It will be jointly spearheaded by Bridges Co-Founder and Co-CEO Michele Giddens, and AEA Investors Co-CEO and Chairman John Garcia.

Bridges and AEA-Bridges Impact Corp both declined to comment on the decision to base the SPAC in the Carribean tax haven, saying they were unable to issue statements beyond the SEC filing.

Along with AEA-Bridges Impact, two other sustainability-focused SPACS which floated earlier in the year are domiciled in the Cayman Islands: TPG Pace Beneficial Finance Corp and Sustainable Opportunities Acquisition Corp. The Islands, which are categorised as a “non-cooperative tax jurisdiction” by the EU, are favoured by SPACS for their tax advantages and flexible structure.

The SPAC is due to be listed on the New York Stock Exchange under the symbol IMPX.U. Credit Suisse and Citi were joint bookrunners on the deal.

Bridges was founded in 2002 by Giddens, together with Philip Newborough and impact investing stalwart Sir Ronald Cohen, following the recommendations of the UK government’s Social Investment Task Force, of which Giddens and Sir Ronald were members.

SPAC IPOs have been increasing in popularity this year, with analysts noting a rise in both the number and value of deals.

Separately, $300bn US buyout giant Apollo Global Management has unveiled a dedicated impact investing platform, Apollo Impact. The new business will be co-led by Marc Becker, a Senior Partner at Apollo, and new joiner Joanna Reiss, a Founding Partner of PE firm Cornell Capital.

Apollo has also named Lisa Hall, an academic formerly of Georgetown University’s Beeck Center for Social Impact and Innovation, to oversee the platform’s  development as Chair of Impact.

Apollo has said that the platform will focus on “private-equity like investments in later-stage companies”, rather than the early-stage investments usually favoured by impact investors.