A dynamic delegated investment model of SPACs

• Main Authors: LUO, Dan, SUN, Jian
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: SPAC; delegated investment; dynamic delegation; moral hazard; Finance and Financial Management; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/7037; https://ink.library.smu.edu.sg/context/lkcsb_research/article/8036/viewcontent/SSRN_id3929762.pdf
• Institution: Singapore Management University

We study SPACs in a continuous-time delegated investment model. Our model is built upon three unique features of SPACs: the sponsor and the investor are only partially aligned, a SPAC has a short time horizon, and the investor has the final control over investment approval. Due to the misalignment i...