Fusion Acquisition Corp., a blank check company chaired by State Street Corp. senior advisor Jim Ross, has raised $305 million for dealmaking in the asset management sector.
Fusion priced its initial public offering at $10 a share, setting the stage for the New York-based special purpose acquisition company to hunt for a company with an enterprise value of $750 million to $3 billion, according to a statement from the SPAC on June 25. The total raised from the IPO will probably increase to around $350 million after the over-allotment option is exercised, Ross said Friday in a phone interview.
Ross retired from State Street in March after 27 years with the firm, most recently serving as executive vice president of State Street Global Advisors and chairman of the asset manager’s global SPDR exchange-traded funds. He said he expects Fusion to take a company public in the next 18 months, having identified 200 potential targets in asset management.
Wealth management firms are among the businesses that Fusion will consider for investment, according to Ross, who said the SPAC could take a controlling or minority stake under a deal. Fusion is seeking to invest in a firm with a strong management team already in place, he said, adding that finance technology will be an important aspect of any acquisition that it makes.
“If you don’t have cutting edge tech, you’re not going to be the company of choice for clients over time,” said Ross, explaining that the next generation of wealth will be expecting it.
Fusion’s chief executive officer, John James, is the founder multiple tech businesses, including fintech firm BetaSmartz in 2015, according to the blank check company’s IPO document.
Fusion’s board and executive team, including Ross, James, and chief financial officer Jeffrey Gary, hold a 20 percent stake in the SPAC, the document shows. Gary also has long experience in asset management, having previously worked at investment firms including Avenue Capital Group, Third Avenue, and BlackRock.
Ross said that Fusion conducted the “road show” for the IPO remotely and mainly through phone calls because of Covid-19. He said he expects the pandemic could accelerate plans of some private business owners to cash out, while other asset management firms may be seeking capital to expand their geographical footprint, technology, or products.
Shares of Fusion, which trade under the ticker FUSE.U, rose about 1.6 percent in their first day of trading Friday, closing at $10.16 each.