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The Spac market was shrivelling when the industry’s annual conference rolled around in mid-2022, with a hastily arranged guest appearance by porn star Stormy Daniels failing to brighten the gloomy mood.
This year’s event at a golf club in an upscale suburb of New York was markedly more upbeat, attended by some of Wall Street’s most illustrious money managers, delegates from several of America’s largest law firms and dozens of banks, consultants and private investors.
Special purpose acquisition companies are enjoying another moment in the sun as the market for traditional initial public offerings continues to struggle, four years after ultra-low interest rates directed billions of dollars into the investment vehicles to fund flying taxi firms, commercial space ventures and a host of other speculative projects.
“There’s a spring in everyone’s step and so many more smiling faces,” said one Cayman Islands-based lawyer at the Spac Conference 2025 on Wednesday, hosted at Westchester Country Club in Rye, New York, and attended by a record number of guests, according to organisers.
Spacs have listed on US stock markets for more than 30 years, allowing investors to raise equity through an IPO for an empty shell that has around two years to identify a private company to merge with or acquire. Most that do, eventually trade far below their initial listing price, with retail traders often left holding the bag.
Once derided as “a poor man’s IPO,” Spacs became wildly popular during the bull run early in the Covid-19 crisis, with 600 deals in 2021 raising a record $163bn before the fervour died down as higher interest rates weighed on global stock markets. But there have been 56 Spac offerings so far this year raising over $10bn, roughly equal to the total for all of 2024.
The revival has come as uncertainty fuelled by Donald Trump’s tariff war has weighed on the traditional IPO market. At the same time, Trump’s return to the White House has unleashed a fresh wave of speculation that has energised markets for risky assets such as cryptocurrencies.
Walking the conference floors — and steering clear of an axe-throwing stall parked on the lawn — this week were Spac industry stalwarts including Loeb & Loeb co-chair Mitch Nussbaum and White & Case partner Joel Rubinstein, as well as Joaquin Dean, chief executive of US hip hop record label Ruff Ryders.
Serial Spac sponsors including former Citigroup executive Michael Klein, Los Angeles billionaire Alec Gores and banking entrepreneur Betsy Cohen were absent. Other guests previously put off by the Biden administration’s stricter regulatory approach and the reputational stigma that Spacs still carry were making their first conference appearance in years.
Sashaying between the Bandshell Terrazzo and the century-old Westchester Ballroom, and later over drinks and hand-rolled cigars, representatives of some of Wall Street’s biggest banks rubbed shoulders with the cast of smaller boutiques including BTIG, Cohen & Co and D. Boral Capital that in recent years has sprung up to replace them.
Chatter was dominated by rumours of a deal brewing involving a once prolific sponsor, the perks of listing in the Cayman Islands rather than Delaware, and reports that Goldman Sachs is set to return to the market following a three-year hiatus.
Yet, there appeared little sense of panic among the bank’s smaller Spac competitors. “The pie is big enough for everyone,” said one head of Spac investment banking at a New York-based firm.
More of the bigger players “will come back towards the end of the year when they can no longer ignore the fees,” said another Spac banker, “especially if and when you see private equity firms taking their portfolio companies and auctioning them off”.
Panel discussions underscored what attendees said was a fervent industry desire to move on from a series of high-profile flops four years ago. Topics included “renewed focus on quality deals and due diligence”, and a “shift to prioritising Spac targets in desirable industries with solid revenue”.
And one industry is driving the Spac resurgence more than any other, according to the Cayman Islands-based lawyer. “Right now it’s all crypto,” he said, nodding to several recent Spac deals involving companies established to mimic the tactics of Michael Saylor’s Strategy, the world’s biggest corporate holder of bitcoin.
“The Spac market is in a good place,” said one banker overlooking Westchester’s verdant 18-hole course as the conference drew to a close.
“In 2021 it was completely oversaturated. [Now] there’s not so much supply that we’re going to get ourselves into trouble again.”
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