APFII Members to back SPAC from the Pacific.
7th January 2021 - Technology and Operational Support for New York IPO for the Pacific.
“As far as New Year’s resolutions go – we have decided to set ourselves an ambitious one”, says APFII Chairman, Robert Bell. “We are pleased to conclude the annual APFII membership meetings, this year in Mexico, with virtual attendance from all over the Pacific. We welcome APFII members in their support of our mission to continue to grow ethical software and solutions for G-77 markets, by linking the Pacific’s know-how with some of the best existing businesses in the world.”
Bell is referring to APFII’s plan to raise funds this year from public sources - initially USD 300m, but up to NZD 12.75b (6.5b SDR) over time - beginning in 2021. APFII’s goal is to continue its nearly decade long program of developing excellent strategic and essential infrastructure, cash flow, and assets.
APFII assisted the facilitation of three investment funds to purchase banks in the Pacific Region - resulting in the solution to De-Risking - and some of the highest emerging market first-time financial service uptake rates in the world.
APFII’s work in core infrastructure is creating strong demand outside the regions that are already benefitting significantly from our platforms, where incumbents in the first world are being leapfrogged, and already falling behind emerging markets in growth and industry sophistication.
APFII and its membership have selected the US, and SEC, and FINRA to oversee this process, in 2021. This enables investors to access and participate in our work, under a familiar framework, that also recognises our focus of security and sanctity of wealth preservation and growth.
“Our world needs much better financial services – and the incumbents are not doing well. You have HSBC, recently the largest bank in the world, languishing at 30% of its former size and client base. Deutsche Bank, the former stalwart of institutional foreign exchange – down about 90% in value. A total of nearly half a trillion dollars in losses from institutions that were once thought of as mighty and prestigious.
“And then you have the fin-tech types that are trading at 100s of times their profit (if they make any at all) - saturating their market niches with user friendly versions of existing products running on well trodden rails, at loss making rates, and approximately standard pricing, and good marketing”, he says. “No doubt the UX has improved a little - but there is plenty yet to do - the market is only just beginning to change.
“While we APFII has overseen tremendous growth in our region - entering new markets can be time consuming - and uncertain. And doing so as a fintech is expensive. Looking around - we see fintechs consuming billions of dollars, for a hand-full of products, and sky high valuations - but no profits in sight. So we have reviewed this situation in depth - and we believe we have found the middle ground: revolutionary common sense, delivering profitable innovation on inexpensive platforms to pre-existing clients at profitable businesses that need our help, just like the Pacific once did.
“As we have found, the mechanisms to deliver a global solution are not that expensive, if you know where to look; and if you select or connect the right assets together - it can be very powerful.”
- Robert Bell, Chairman APFII.org
This month APFII intends to file an interim SPAC application at the SEC, with capacity for a little under USD 300m in external investments, but the expectation to do a lot more.
“As we have progressed our research - we are beginning to shortlist potential firms or organisations, or assets, as propositions of interest. We cannot announce and have not begun due diligence - but the reality is – we expect that our work as a Sponsor, will attract a lot more interest than the initial $300m we are seeking at this time. The SPAC structure for this kind of work, is a good fit - and we have used similar vehicles before to acquire low risk - profitable - businesses to enhance our network of members. This will be our first publicly available investment vehicle, and as such - it will likely be our most conservative one.
In the past, the Special Purpose Vehicles we have been involved with, including KLX Assets, Pacific Settlements Limited, EMP Motorworks, and Aspire Holdings, were all 100% private placement, and used a stricter structure than is required by SPACs under US regulations. It was much more favourable to investors than standard SPAC programs appear to be. As such we have proposed a more favourable SPAC service in our application for public offering, that similarly protective of investor interests as our previous programs - and as such we have provisioned for capacity that extends considerably above USD 300m – although it is prudent to take smaller first steps.
Over the past few years, our region’s capital-ready investors have been in discussions with us, around resolving global problems still caused or unresolved by financial institutions; and from them, we have commitments of various sorts over this time, that exceed US $2b so far. We know the Market demands real financial solutions, that create genuine, sustainable long term value, is greater than this, and the benefits to society of growing our work, are once again, orders of magnitude more.
“Now is the moment to validate this support, and put in place a global framework to expand our know-how into other regions. It is about catalysing a tactical renaissance and a catch-up for the incumbent financial sector, to get financial institutions to where they should already be, by delivering what should already be in place, with special regard to ethical and effective financial infrastructure.
The confronting thing is – a great number of people in the industry won’t realise what any of this means – and therein lies the need for renewal, to capture a part of the overdue new wave.”
The past 15-20 years have been sluggish for established Financial Institutions. Having employed C-suite people from brands such as Microsoft, IBM, Nomura, Credit Suisse, ICAP, HSBC and others, the APFII chairman feels that it isn’t rocket science to see why.
However - platform brands have excelled, as has cleverly designed retail offerings. APFII’s mix, from Pension services, to Retail Banking, all the way to National Payment infrastructure, straddles this opportunity and segment. In emerging markets - often the entire ecosystem needs to be built - but this is not the case in prime markets.
Hudson 800, sponsored by APFII, seeks to raise capital to prudently extend our award winning management and technical experience in product optimisation and client responsiveness, from markets where our innovations generate annual retail client revenue of around 7% of GDP per capita. Transitioning innovation into high-income markets with equally revolutionary services, we seek investor participation to acquire very high quality and already profitable assets or businesses, in deeply overlooked sectors, that can accelerate our speed to market and returns to investors at incredible scale, from these important markets, that are closely linked to our competency.
The SPAC structure provides clarity and opportunity for investors to evaluate our success prior taking material capital risk. It also enables acquisition negotiations to proceed with strength, backed by verified funds in escrow, designated for purpose. Adding in our low costs and ultra longterm engagement strategy, this SPAC framework is optimised for risk control and growth.
“APFII’s banking services for Central Banks, banks, and mobile operators, have been built and installed from scratch: National Payment Infrastructure, FX, Bond, Cross border real time Cheque imaging, and Collateral Management Systems, international card system platforms, Pension, SME, retail and universal compliance systems, plus of course, the near ubiquitous international mobile money services that date back to 2010. There are not many businesses that have done what we have done. Nor many that could survive our markets.
“Now is an opportune time to re-engage larger parts of the global economy via businesses that are already established. Our discussions have given us very clear guidance from potential investors: The market seeks high long-term returns, excellent cash flow, strong strategic advantage, and ethical, socially responsible growth. Which is a familiar story to our own. This is not an IPO of any of the APFII or related businesses – these services that own the Central Banking code (for example) will not become Public or for sale – but we are ready to invest alongside our partners to form broader base of resources that benefit from our know-how, their existing scale – and our direction and mission”.
Robert Bell, on the timing of this SPAC.
Robert is no stranger to a worthy challenge. In 2005, he set out to build a flanker bank within HSBC to explore extremely cost-conscious markets, to introduce private wealth and UHNW banking practices to low income populations (rather than the standard late-fee current-account + credit cards strategy of the time) to learn profitability in fat tail markets.
By 2020, that had evolved into bespoke payment systems central banks and FX markets for ultra-volatile currencies – culminating in the Aspire Bank, KlickEx, AusPay, the Pacific Development Foundation, Pacific Utilities, and APFII, all without external capital. Along the way – they have picked up quite a string of collateral successes, as Bell calls them:
“After a three year stand down from HSBC, we set up the largest mobile money cross border hub in the world” he says, “and won SWIFT’s global innovation award in 2013. We also took in significant funding from the United Nations, and did about $1 billion in sales volume in the first few years of doing business; a number that is now almost $1.5b – with just nine full time staff.”
“Add in to that the difficulties and scaling-factors of purchasing power parity in these economies – and you realise that GDP per capita can be as low as $1,500 per year where we have forged our platforms; so when we say we have reached these populations with 90% efficiency – and have processed more than 100% of their GDP levels – it can be taken as a more difficult task than capturing values that exceed GDP for operators in the US, or EU, for example – should we have been operating in those markets - as there was, in most cases - none of the basic “financial rails” to launch from. We had to go out and build every aspect of what we needed - from biometric ID systems, to national payment systems, foreign exchange markets, and yes - even banks themselves.
It is a theme that resonates through every conversation with Robert – that in a world where the various quantums of money thrown about can get overwhelming – he is always bringing the numbers back to earth, and putting them in context for what they mean for families.
And in a world of increasing political strain, and deeply felt civic agitation around run-away social and financial inequality – a bit of socially minded financial inclusion, is something that the market – and the populations they rely upon, could take to the bank.
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The APFII SPAC, known as Hudson 800 Acquisitions Inc, will be available for retail subscription in late Q1 2021, pending regulatory approval.