Hedge fund giant Marshall Wace is ringing alarm bells about the booming SPAC market after building up long and short bets on blank-check companies that total more than $1 billion, Bloomberg reports.
The life cycle of SPACs is riddled with “perverse incentives” for investors, sponsors and the companies using the shortcut route to come to market, Paul Marshall, co-founder of the investment firm, told his investors in a newsletter. SPACs have delivered “awful returns” and most recent issuances will be no different, he said.
“The SPAC phenomenon will end badly and leave many casualties,” Marshall said, while disclosing that the firm has more than $1 billion of gross exposure to SPACs in its flagship $21 billion Eureka hedge fund. Read more.
