The SPAC market has cooled in recent weeks, with companies that went public by merging with a blank-check entity trading well off their highs, and a growing number of regulatory hurdles emerging for an investment strategy that often dominated financial news headlines in 2020, PitchBook reports.
The drama is almost certain to impact the private equity industry.
Last week, the SEC announced that a number of SPACs have misclassified warrants sold in IPOs as an equity rather than a liability, in the latest sign that new SEC chair and longtime Wall Street critic Gary Gensler plans to keep a watchful eye on what has become one of the industry’s favorite investment strategies. In the meantime, blank-check IPOs have essentially come to a halt as investors await further guidance.
What does that mean for private equity? Read more.
