Rise of the SPACs: Understanding the Risks and Rewards in This Vogue IPO Vehicle

To investment managers, especially those involved with initial public offerings (IPOs), 2020 may well be remembered for the rise of special purpose acquisition companies (SPACs). While traditional IPOs have hit the pause button, so far in 2020, SPACs are having a banner year. As of May 2020, SPACs represented 38% of U.S. IPO filings with a net intake of $6.5 billion, exceeding the total investments of conventional IPOs, according to PitchBook Data, Inc.

This article explores the rising popularity and challenges of SPACs and shares why private companies should consider them as part of their public readiness transition.