INVESTMENT OPPORTUNITIES

EASY ACCESS TO “COMPANIES OF THE FUTURE”

  • SPACs have certain advantages over traditional initial public offerings (IPOs) in how companies looking to go public can tell their story as they are not subject to “quiet periods” of traditional IPOs.
  • This is especially important for the most innovative companies whose value lies mostly in the future.
  • As a result, many of the "companies of the future" are going public via SPACs.

ACTIVE MANAGEMENT IS IMPORTANT

  • Historically, SPACs have experienced a very wide range of outcomes following business combination.
  • We believe this should continue in the future since a sponsor has an incentive to do a bad deal rather than do no deal and lose their equity.
  • As a result, we believe investors should be careful about passively holding all SPACs.
  • Exos has extensive experience in all aspects of SPACs.

SPXZ, as an ETF, offers liquid, transparent access to an actively-managed portfolio of companies going public via SPACs.

SPXZ provides broad exposure to a selected cross-section of the largest pre-and post-combination SPACs by market capitalization.

SPXZ is actively managed with the goal of limiting exposure to poor performing companies.

SPXZ targets equal dollar weights so no one company, or group of companies, will have an outsized effect.

ETF Details

as of TBD

Ticker SPXZ
CUSIP 53656F466
ISIN US53656F4660
Primary Exchange NYSE
Expense Ratio 1.00%
AUM TBD
Shares Outstanding TBD
Launch 1/26/21
# of Holdings TBD

Choose:

All other investors can learn more about SPXZ by calling (855) 857-2677

SPXZ PERFORMANCE

as of TBD

 
SPXZ
Quarter end performance as of TBD
1 Year 3 Year 5 Year Since Inception
(1/26/21)
NAV - - - -
Market Price - - - -

NAV and Market Price

as of TBD

NAV Market Price
Net Asset Value Closing Price TBD
Change ($) Change ($) TBD

Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance quoted. For performance current to most recent month end please call (855) 857-2677.

Shares are bought and sold at market price not net asset value (NAV). Market price returns are based upon the closing composite market price and do not represent the returns you would receive if you traded shares at other times.

Short term performance, in particular is not a good indication of future performance and an investment should not be made based solely on returns.

FAQ

  • A SPAC or Special Purpose Acquisition Company is a “blank check” shell corporation designed to take companies public without going through the traditional initial public offering (IPO) process.
  • It is created by a sponsor to pool funds in order to pursue a M&A (mergers and acquisitions) transaction with a private company within a set timeframe, which is typically 18 to 24 months from launch.
  • The SPAC sponsor usually will identify a target industry or area of focus but not the specific target company when the SPAC launches via an IPO.
  • SPACs can allow all investors earlier access to venture capital (VC) or private equity backed companies.
  • SPACs have certain inherent advantages over a traditional IPO that can allow the most innovative companies to more freely communicate their story broadly to stakeholders.
  • SPACs are increasingly being used by some of the most innovative companies in the most innovative industries to go public.
  • Because SPACs are listed on exchanges like New York Stock Exchange (NYSE) and NASDAQ investors can generally access them through any brokerage account.
  • In a world where companies have been staying private longer, SPACs can provide investors who may not be able to access private equity transactions a means to invest in so-called “unicorns” at an earlier stage that might otherwise be possible. A unicorn is a privately held startup company with a current valuation of $1 billion or more.
  • SPACs are increasingly attracting well-known venture capitalists, private equity investors, entrepreneurs, and public figures as sponsors, which in turn attract a broader selection of companies to consider SPAC mergers.
  • Investors in a SPAC typically receive $10.00 units comprised of one common share and additional options (typically a warrant, a fraction of a warrant, or occasionally a right to buy the common stock at a fixed price in the future). A warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed price called exercise price until the expiry date.
  • The proceeds raised in a SPAC launch/IPO are held in an inviolable trust, and typically invested in cash equivalents, until the closing of a business combination.
  • Investors may sell their shares at any time during the life of the SPAC. Upon a shareholder vote to approve a business combination, investors may either redeem their shares for their pro-rata share of the cash in trust or “participate” in the business combination.
  • If a business combination does not occur within a pre-defined time period (typically 18 – 24 months), the SPAC is generally dissolved, and investors receive their pro-rata portion of cash in trust. Occasionally, if a sponsor has identified a target but is not able to close the transaction before the liquidation deadline, the sponsor will request an extension from shareholders.
  • Sponsor shares have a risk profile similar to a venture capital or private equity deal but in a compressed time frame.
  • Sponsor shares have better liquidity than a VC or private equity (PE) fund.
  • Sponsor groups can use the vehicle to take a significant minority stake in a way they can add meaningful long-term value.

Please review the risks of SPACs below in the disclosure section.

  • A SPAC can be a faster means of raising capital than in a traditional IPO.
  • It can provide more certainty around price and participating investors than in a traditional IPO.
  • There are far less limitations than in a traditional IPO around conveying the company story, and especially in conveying forward financial projections.
  • A SPAC provides more flexibility to include bolt-on acquisitions, as well as to align incentives.
  • A SPAC can offer the opportunity to partner with a sponsor team that adds strategic value (operational, capital markets, etc.).
  • By selling a minority stake, a private company can maximize its value to existing shareholders over a longer time horizon than a via a strategic sale.

Please review the risks of SPACs below in the disclosure section.

  • SPXZ will generally target the largest 50 pre- and post-combination SPACs as measured by market capitalization. SPXZ will have the flexibility to hold SPACs in any industry.
  • SPXZ’s goal is to give broad exposure to a cross section of the potential “companies of the future” born from SPACs, with a focus on the largest SPACs
  • SPXZ will generally hold at least 2/3 of its assets in an equal dollar weighted portfolio selected from the largest 50 companies born from SPACs in the prior 3 years.
  • The portfolio will be actively managed with the goal of eliminating poor performers.
  • SPXZ will generally hold up to 1/3 of its capital in an equal dollar weighted portfolio selected from the largest 50 pre-combination SPACs, as a means to gain early access to SPAC combinations.
  • Research performed by Exos suggests that historically the top quartile of SPAC mergers have performed very well while the bottom quartile have performed very poorly.
  • This is intuitive since sponsors will all compete for the best deals, but sponsors who do not secure one of the best deals have a financial incentive to do a bad deal rather than lose their investment.
  • As a result, we believe active management can add value in this space.
  • No, we don't hedge at the portfolio level. A key risk management feature of the fund is our ability to put any pre-combination SPAC back for the cash-like collateral.

PORTFOLIO

TOP 10 HOLDINGS

as of TBD

Percentage of Net Assets Name Ticker Identifier Shares Held Market Value

Fund holdings and sector allocations are subject to change and should not be considered a recommendation to buy or sell any security.

PRICING

as of TBD

NAV Premium/Discount Median Bid/Ask Spread
TBD TBD

Historical Premium/Discount

 
Days at premium
Days at NAV
Days at discount

BLOG

06/01/2021

Check out our latest white paper: SPXZ – A Public Proxy for Late-Stage VC Investing

Investing in innovation has long been a constant driver of excess returns, through both bull and bear markets, economic expansions and recessions. The traditional way to invest in innovation is through private equity and venture capital, though historically only the wealthiest of investors have been able to access these opportunities.

SPACs have emerged as a viable alternative to late-stage private financing for the most innovative companies, in the process giving public market investors earlier access to an important segment of the investment universe. With that said, we believe SPACs are not well-suited to passive investing, as they have an inherent “sponsor bias” that has historically caused a large and relatively predictable performance differential between the top and bottom quartile of deals.

Our white paper explains why we believe SPACs are a good public proxy for late-stage venture capital investments, and why we believe our ETF SPXZ may be a valuable building block in any investor’s portfolio for gaining exposure to innovative companies of the future.

Click here to view

02/18/2021

Mark Yusko on SPACs

The head of Morgan Creek Capital recently launched an ETF to diversify investments in the blank-check companies.

References to other products should not be interpreted as an offer of those securities.

Investments in SPACs are still subject to banker and brokerage fees.

Fund holdings and allocations are subject to change and should not be considered recommendations to buy or sell any security.

02/13/2021

SPACs used to be a joke in Silicon Valley — now they’re going mainstream

The surging number of SPACs on the market coupled with participation by top institutional investors have made the process cost-efficient and credible.

02/01/2021

See Morgan Creek’s Mark Yusko discuss SPACs on CNBC’s Worldwide Exchange

Morgan Creek Capital Management CEO and CIO Mark Yusko discusses the SPAC market and his new ETF SPXZ.

https://twitter.com/CNBCWEX/status/1356334544656412672

The S&P 500, or simply the S&P, is a stock market index that measures the stock performance of the 500 largest companies listed on stock exchanges in the United States.

The CNBC SPAC 50 Index tracks the top 50 U.S. SPACs by market cap, including SPACs that have declared a target investment up until the deal closes.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Past performance is no guarantee of future results.

02/01/2021

Morgan Creek’s veteran investor Yusko partners with EXOS Financial to launch SPAC ETF

Seasoned investor Mark Yusko, former CIO of the University of North Carolina Endowment, and current CEO and CIO of USD1.5 billion Morgan Creek, has joined forces with EXOS Financial, a NY-based fintech company helmed by Brady Dougan, the former CEO of Credit Suisse, to launch his first ETF, the Morgan Creek – Exos SPAC Originated ETF (SPXZ).

https://www.etfexpress.com/2021/02/01/295225/morgan-creeks-veteran-investor-yusko-partners-exos-financial-launch-spac-etf

Active investing has higher management fees because of the manager's increased level of involvement while passive investing has lower management and operating fees. Actively managed funds may have higher portfolio turnover than passively managed funds.

The S&P 500, or simply the S&P, is a stock market index that measures the stock performance of the 500 largest companies listed on stock exchanges in the United States.

01/26/2021

Morgan Creek and EXOS Launch SPAC Originated ETF

Actively managed SPXZ targets SPACs pre- and post-merger with an equal weight approach

Chapel Hill, NC, January 26, 2021—Chapel Hill, North Carolina-based asset manager Morgan Creek Capital Management and New York-based fintech company EXOS Financial today launched the Morgan Creek – EXOS SPAC Originated ETF (ticker: SPXZ), an actively managed ETF with an investment strategy focused on Special Purpose Acquisition Companies, or SPACs, and the public companies born from them.

SPXZ seeks to provide investors with liquid, transparent, actively managed exposure to a portfolio of the innovative companies that go public via SPAC mergers. The fund expects to hold approximately two thirds of its capital in an equal dollar weighted portfolio of the largest companies to have completed SPAC mergers over the past three years, and approximately one third of its capital in an equal dollar weighted portfolio of pre-combination SPACs.

“We’re absolutely thrilled to partner with EXOS to launch SPXZ,” said Mark Yusko, CEO and Chief Investment Officer at Morgan Creek Capital Management. “As an increasing number of the most innovative companies in the potential “industries of the future” choose to go public via SPACs, we think it’s important to provide investors with a liquid, transparent, actively managed vehicle to gain access to those companies of the future.”

“We’re very excited to be partnering with Morgan Creek on SPXZ,” said Brady Dougan, CEO at EXOS Financial. “We see SPACs as an area we can add tremendous value. One where our experience, knowledge of management teams, relationships, and a deep understanding of evolving technological trends is a true differentiator.”

SPXZ targets the largest 50 pre-combination and largest 50 post-combination SPACs in building its portfolio. “We believe active management should be a key consideration for those investing in this space,” said Mark Yusko, CEO and Chief Investment Officer at Morgan Creek, “because historically, SPAC returns have been bifurcated, with the top deals performing very well, but the bottom deals performing poorly. Given the nature of the embedded sponsor incentives in these deals, we expect this performance bifurcation should continue in the future.”

Sometimes referred to as “blank check” companies, Special Purpose Acquisition Companies, or SPACs, are investment vehicles that enable a management team to raise capital via an IPO with the express purpose of engaging in a business combination with an operating company. SPAC mergers have increasingly become the preferred way for many of the most innovative companies from an increasing number of the potential “industries of the future” to raise capital and go public, as we believe the structure offers several advantages over a traditional initial public offering.

The expense ratio of SPXZ is 1.00%.

About Morgan Creek Capital Management

Morgan Creek Capital Management is an asset manager founded by Mark Yusko, the former CIO of the University of North Carolina Endowment. Morgan Creek uses an endowment-like approach to investing, specializing in targeting opportunistic-focused investments. The firm has decades of investment experience and relationships around the globe, and is a thematic investor focusing on important secular trends such on innovative technology, the wealth transfer to developing markets, next generation consumers, as well as demographics and new models in healthcare.

About EXOS Financial

EXOS is a fintech company building a modern institutional finance platform to disrupt the legacy investment banks. Helmed by Brady Dougan, the former CEO of Credit Suisse, EXOS has deep experience and intellectual property in all aspects of SPACs. With SPXZ, EXOS is bringing its banking, capital markets, technology expertise, and resources to its first publicly listed fund.

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s prospectus and summary prospectus, which may be obtained by calling (855) 857-2677. Read the prospectus carefully before investing.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Past performance is no guarantee of future results.

The Fund invests in equity securities and warrants of SPACs. Pre-combination SPACs have no operating history or ongoing business other than seeking Combinations, and the value of their securities is particularly dependent on the ability of the entity’s management to identify and complete a profitable Combination. There is no guarantee that the SPACs in which the Fund invests will complete a Combination or that any Combination that is completed will be profitable. Unless and until a Combination is completed, a SPAC generally invests its assets in U.S. government securities, money market securities, and cash. Public stockholders of SPACs may not be afforded a meaningful opportunity to vote on a proposed initial Combination because certain stockholders, including stockholders affiliated with the management of the SPAC, may have sufficient voting power, and a financial incentive, to approve such a transaction without support from public stockholders. As a result, a SPAC may complete a Combination even though a majority of its public stockholders do not support such a Combination. Some SPACs may pursue Combinations only within certain industries or regions, which may increase the volatility of their prices.

The Fund invests in companies that are derived from a SPAC. These companies may be unseasoned and lack a trading history, a track record of reporting to investors, and widely available research coverage. Post-Combination SPACs are thus often subject to extreme price volatility and speculative trading. Post-Combination SPACs may share similar illiquidity risks of private equity and venture capital. The free float shares held by the public in a Post-Combination SPAC are typically a small percentage of the market capitalization. The ownership of many Post-Combination SPACs often includes large holdings by venture capital and private equity investors who seek to sell their shares in the public market in the months following a Combination transaction when shares restricted by lock-up are released, causing greater volatility and possible downward pressure during the time that locked-up shares are released.

Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, a decline in the value of an investment in a single issuer or a small number of issuers could cause the Fund’s overall value to decline to a great degree than if the Fund held a more diversified portfolio. The fund is new and has a limited operating history.

Markets have experienced significant periods of volatility in recent years due to a number of economic, political and global macro factors, including the impact of the coronavirus (COVID-19) pandemic and related public health issues. As a result, the risk environment remains elevated.

“Pre-Combination” SPACs are SPACs that are either seeking a target for a Combination or have not yet completed a Combination with an identified target

“Post-Combination” SPACs are operating companies that have completed a Combination with a SPAC within the last three calendar years.

Opinions expressed are subject to change at any time, are not guaranteed and should not be considered investment advice.

The Morgan Creek - Exos SPAC Originated ETF (SPXZ) is advised by Morgan Creek Capital Management, LLC, sub-advised by Exos Asset Management, LLC, and distributed by Foreside Fund Services, LLC.

01/21/2021

Third SPAC ETF Launch Taps Into Blank Check Company Boom

Morgan Creek Capital’s Mark Yusko is teaming up with former Credit Suisse CEO Brady Dougan. Read the Article from the Wall Street Journal here:

https://www.wsj.com/articles/third-spac-etf-launch-taps-into-blank-check-company-boom-11611225000

VIDEO

How to Buy SPXZ

 

ETFs are available through various channels including broker-dealers, investment advisers, and other financial services firms, including:

 

Robinhood

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Fidelity

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TD

E-Trade

Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund's prospectus and summary prospectus, which may be obtained by calling (855) 857-2677. Read the prospectus carefully before investing.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Past performance is no guarantee of future results.

The Fund invests in equity securities and warrants of SPACs. Pre-combination SPACs have no operating history or ongoing business other than seeking Combinations, and the value of their securities is particularly dependent on the ability of the entity's management to identify and complete a profitable Combination. There is no guarantee that the SPACs in which the Fund invests will complete a Combination or that any Combination that is completed will be profitable. Unless and until a Combination is completed, a SPAC generally invests its assets in U.S. government securities, money market securities, and cash. Public stockholders of SPACs may not be afforded a meaningful opportunity to vote on a proposed initial Combination because certain stockholders, including stockholders affiliated with the management of the SPAC, may have sufficient voting power, and a financial incentive, to approve such a transaction without support from public stockholders. As a result, a SPAC may complete a Combination even though a majority of its public stockholders do not support such a Combination. Some SPACs may pursue Combinations only within certain industries or regions, which may increase the volatility of their prices.

The Fund invests in companies resulting from a combination of a SPAC and a [privately held] operating company. These companies may be unseasoned and lack a trading history, a track record of reporting to investors, and widely available research coverage. Post-Combination SPACs are thus often subject to extreme price volatility and speculative trading. These stocks may have above-average price appreciation in connection with a potential Combination with a Post-Combination SPAC prior to inclusion in the portfolio. The price of stocks included in the portfolio may not continue to appreciate and the performance of these stocks may not replicate the performance exhibited in the past. Post-Combination SPACs may share similar illiquidity risks of private equity and venture capital. The free float shares held by the public in a Post-Combination SPAC are typically a small percentage of the market capitalization. The ownership of many Post-Combination SPACs often includes large holdings by venture capital and private equity investors who seek to sell their shares in the public market in the months following a Combination transaction when shares restricted by lock-up are released, causing greater volatility and possible downward pressure during the time that locked-up shares are released.

Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a lesser number of issuers than if it was a diversified fund. As a result, a decline in the value of an investment in a single issuer or a small number of issuers could cause the Fund's overall value to decline to a great degree than if the Fund held a more diversified portfolio. The fund is new and has a limited operating history.

Markets have experienced significant periods of volatility in recent years due to a number of economic, political and global macro factors, including the impact of the coronavirus (COVID-19) pandemic and related public health issues. As a result, the risk environment remains elevated.

“Pre-Combination” SPACs are SPACs that are either seeking a target for a Combination or have not yet completed a Combination with an identified target

“Post-Combination” SPACs are operating companies that have completed a Combination with a SPAC within the last three calendar years.

Opinions expressed are subject to change at any time, are not guaranteed and should not be considered investment advice.

The Morgan Creek - Exos SPAC Originated ETF (SPXZ) is advised by Morgan Creek Capital Management, LLC, sub-advised by Exos Asset Management, LLC, and distributed by Foreside Fund Services, LLC.