Hedge funds have invested $9 billion in SPACs, but lack of
financing could crush the market
By Julie Dalla-Costa
Earlier this summer, U.K.-based hedge fund group GLG Partners
announced that it would use a U.S.-based special purpose
acquisition company to go public in the biggest announced SPAC
deal to date, a new take on a reverse merger. But could this be
the last hurrah for SPACs, which have become the darling of
hedge fund managers?
The success of a SPAC IPO depends on the likelihood of the
sponsors, which are mere shell companies, being able to
complete an acquisition. In December last year when access to
credit was easy, Freedom Acquisition Holdings completed the
largest SPAC IPO to date when it raised $528 million on the
American Stock Exchange. On June 25, Freedom announced it would
acquire GLG and fund the $3.4 billion deal with its...