By
Steve Muchoki
February 15th, 2024
It is yet unclear which industries Elliott Management may be looking to pitch tents with but the hedge fund’s SPAC is bound to be one of the biggest.
American investment management firm Elliott Management Corporation is looking to raise as much as $1 billion in a bid to create a Special Purpose Acquisition Company (SPAC). As reported by the Wall Street Journal (WSJ), the Paul Singer owned hedge fund has been meeting with bankers with the aim of raising the $1 billion, citing people familiar with the matter.
SPACs are shell companies that raise funds with the aim of merging with a privately owned business in a bid to take the business public. Many US-based firms are increasingly turning to SPACs to get listed on public exchanges as it affords an easier pathway. SPACs altogether raised about $83 billion in 2020, the highest ever, and the tally thus far in 2021 has kept the momentum.
As reported by Bloomberg, this year, at least 117 SPACs have already raised more than $35 billion, already outpacing the figures in the same period last year. SPAC funding accounts for as much as 46% of all Initial Public Offerings (IPO) in the US last year, and the current pace this year is bound to beat the figures.
Elliott Management has prior to this time watched its peer hedge funds dabble into the SPAC frenzy, a slumber it is set to wake up from. The hedge fund has about $45 Billion Assets Under Management (AUM) has run activist campaigns at some of the world’s largest corporations including Twitter Inc (NYSE: TWTR), AT&T Inc (NYSE: T), and Marathon Petroleum Corp (NYSE: MPC) amongst others.
Per the reports, it is yet unclear which industries Elliott Management may be looking to pitch tents with but the hedge fund’s SPAC is bound to be one of the biggest thus far.
Prominent Names Besides Elliott Management with SPAC Showing
As has been noted, SPACs are increasingly becoming the major option for most companies to go public. Much recently, Coinspeaker reported a potential merger between Victory Park SPAC and Intercontinental Exchange Inc (NYSE: ICE) owned Bakkt Exchange. The deal was valued at about $2 billion at the time.
SoftBank Group Corp (OTC: SFTBF) was also reportedly floating an IPO through a SPAC called Bridgetown Holdings (NASDAQ: BTWNU) in a deal worth at least $500 million.
The size of the funds raised by the SPAC determines to a large extent the size of the company that can be acquired, or merged with. SPACs whose initial fundraising is below their target’s valuation may raise more funds through a deal, known as private investment in public equity, or PIPE.
While the Elliott Management target is not yet revealed at this time, the chances of an easy landing of a target are high as its $1 billion targets will make it rank as one of the top 12 SPACs with that amount of proceeds in recent times, according to the WSJ.