A SPAC, family offices, and a revolutionary green innovation

A SPAC (special purpose acquisition company) might be behind one of the most revolutionary green initiatives to emerge in recent years. It’s backed by a family office and another individual who advised the family office of one of the world’s wealthiest individuals.

HL Acquisition Corp, a NASDAQ-listed, New York City-based SPAC, bought Fusion Fuel, a Portuguese group developing so-called green hydrogen, last June. Fusion Fuel claims to have developed a non-carbon way of creating hydrogen and is in the process of building a hydrogen plant in Portugal where it is pioneering its technology.

The race for low and non-carbon energy initiatives is more intense than ever. And it has become a crowded market, with many family/principal investment offices involved

According to its website, Fusion Fuel: “has developed its own proprietary electrolysis solution using solar energy to create hydrogen with zero carbon emissions…Fusion Fuel’s technology only creates oxygen as a by-product.” If the technology proves commercially successful, Fusion Fuel and HL will have a valuable asset, particularly as the world pushes more than ever for green solutions to stem climate change.  

HL was listed two years ago, with its main backer financier Jeffrey Schwarz. He co-founded a New York City-based asset management business, which he has since left and pursued other investment opportunities. Schwarz’s Metropolitan Capital Partners, the investment vehicle of Jeffery Schwarz’s family office, is the main investment group behind HL. 

Also backing the SPAC is Ajay Khandelwal, who’s on the board of HL. Khandelwal once advised the family office of John Fredriksen on investments. Norwegian Fredriksen is a shipping and oil billionaire, who Forbes reckons is worth just short of $10 billion. However, there is no evidence Fredriksen, or his holding/investment business, the Fredriksen Group, is directly linked to HL as an investor. 

Last month, HL raised a private placement of shares worth around $25 million to help in the costly development of Fusion Fuel’s so-called hydrogen farms. According to a statement from HL, investors enthusiastically backed the private placement, with interest from “both government and industry”. 

The race for low and non-carbon energy initiatives is more intense than ever. And it has become a crowded market, with many family/principal investment offices involved. The development and regulatory costs can run into billions for these projects, but if successful, the return on investment is likely to be substantial. 

Expect for HL, up until now SPACs have avoided green technology. And although SPACs are currently flourishing, for the most part, green commercial initiatives have taken a back seat as a result of the Covid-19 pandemic. But as the pandemic fades, green technology efforts will most likely move up the political and economic agenda, which will no doubt make the sector more attractive to SPAC investors.