Investment

Yes, SPACs have taken a tumble, but family offices continue to back them

The SPAC boom of the last two years might have eased in the face of regulatory scrutiny, but family offices still like them as the last few weeks of activity show. 

Earlier this year it seemed SPACs were the biggest force in the initial public offering market when blank check companies completed $26 million in share sales in January alone, five times more than raised during the same month a year ago. But activity fell off dramatically in the second quarter of 2021 when only $12 billion was raised by SPACs in the US.  

The move by the US Securities and Exchange Commission in April to issue accounting guidance that effectively classified SPAC warrants as liabilities instead of equity undermined sentiment in the market. 

But investors often backed by their family offices aren’t losing faith in the SPAC market. SPACs still offer opportunities – there’s plenty of target companies around – and in a low interest rate environment it’s easy enough to raise funds for them. 

Here’s some of the SPAC activity linked to family offices in the last few weeks:

  • Joe Poulin through his family office, JPK Capital, backed SOAR Technology Acquisition Corp, which recently closed its IPO on the New York Stock Exchange
  • George Soros’ nephew Jeffrey Soros and his family office (unknown) co-founded LAMF (Los Angeles Media Fund) Global Ventures Corp.
  • Srinath Narayanan, backed by a private multi-family office he co-founded, Edgewater Investments, founded Project Energy Reimagined Acquisition Corp. 
  • Pui Lan Patrick Tsang and his family office, Tsangs Group Holdings, backed TG Venture Acquisition Corp.
  • The Miller Family Office and Koch Investment Group backed Crixus BH3 Acquisition Company. 
  • Satish Gupta and his family office Gupta Capital Group backed Compass Digital Acquisition Corp.

Yes, SPACs have been squeezed in recent months not least by the traditional IPO market picked up and eclipsing the blank check sector, but the market remains intact with plenty of family offices either backing them directly or buying their shares. 

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