Spacs prove resilient in shaky markets
Appetite for Special Purpose Acquisition Companies is growing as investors find comfort in their new structure. Market participants expect more to come this year along thematic lines, with the first ESG Spac launched in May.
Special Purpose Acquisition Companies (Spacs), which use the IPO market to raise funds for acquisitions, have proven their ability to weather the current market turbulence.
As of May 21, 26 such IPOs had come to market in the US this year – indicating that 2020’s Spac IPO volume could well match, if not beat, that of 2019.
It is a good result for Spacs, which, in a previous incarnation, had fared poorly during the 2008 financial crisis.