at this point. In addition to Ackman, it includes investment bank Goldman Sachs (GS), Mario Gabelli, private-equity giant TPG Capital, Daniel Loeb’s Third Point Management hedge fund, and Howard Marks’ Oaktree Capital Management hedge fund. Earlier this year, Barron’s shared the story of famed Honeywell (HON) CEO David Cote’s experience with SPACs. Cote ran the industrial conglomerate for 15 years from 2002 to 2017 and was consistently regarded as one of the best CEOs in the world. Cote recounted how someone approached him with the idea of doing a SPAC and he was completely unfamiliar with them. After doing some research, he saw an opportunity. The president and COO of Goldman Sachs approached him and the two teamed up to raise nearly $700 million for industrial acquisitions. This doesn’t mean every sponsor will do a great deal or make money... But the quality is
The gross proceeds among SPACs over the past 12 months has exceeded all of the money from 2013 through 2019 combined , with online gambling business DraftKings (DKNG), men’s wellness firm Hims, and electric-vehicle charging network ChargePoint choosing to go public via SPAC. (See below chart.) Today, SPACs present a better opportunity than ever before, for five reasons... Market Legitimacy SPACs have a shady history, but they’ve come a long way from those early days. Today, SPACs are a well-regulated and increasingly liquid area of the market. It has drawn in more and more qualified investors, regulators, brokers, lawyers, and others. It’s now a fully developed, institutional-class sector, making it
1
perfectly safe for investors. Quality of Sponsors
2
Far from being sponsored by small penny- stock brokerages on Long Island, the group of sponsors is an impressive group of institutions
250
$80
THE GROWING APPETITE FOR SPACs
200
$60
150
$40
100
$20
50
$0
0
2013 2014
2015 2016
2017
2018
2019 2020*
* Through September
American Consequences
67
Average IPO Size Average SPAC Size
$400
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