Jefferies markets private equity

By Stephen Lacey

Jefferies & Company has appointed Charles Mather to head a dedicated structured equity group that will oversee underwriting of private equity, PIPE, registered direct offerings and SPAC businesses. The formation of the group, which was announced in late December, was largely viewed as symbolic, as the bank has historically had a strong private-equity practice.

“I think there was a perception out there that we had not done a lot of SPACs,” said one source at the bank. “So there was a little bit of marketing to external clients behind the group’s formation.”

SPACs, or special purpose acquisition companies, are investment vehicles that raise capital for an acquisition. Proceeds from a SPAC IPO are held in escrow, with the majority of funding returned to investors if a target is not found within a pre-determined timeframe.

SPACs, which are not eligible for official league table credit, have grown in popularity, accounting for 25%–30% of overall IPO volume in the US, by some estimates.

Jefferies participated as a co-manager on two SPAC IPOs last year: a US$120m offering for KBL Healthcare in July, and a US$400m issue for SP Acquisition in October. Neither has completed an acquisition. The bank recently was mandated a co-manager role on a proposed US$300m IPO for Accelerated Global Technology, a SPAC formed by KLA Tencor founder Kenneth Levy.

Mather, a managing director, joined Jefferies last summer from Cowen & Company, where he was head of the private equity group. He is based in New York and reports to Tim Monfort, head of ECM. Other members of the structured equity group include senior VP Abi Subramanian, who came with Mather from Cowen, and VP Mark Weissman.