SPACs / Blank Check Companies

Though SPACs don’t get the press attention of big Tech IPOs like Snapchat and Blue Apron, they’ve consistently driven growth in IPO fees. Even with the ‘regular’ IPO market rebounding strongly, SPACs are generating a larger share of the revenue pool. In the last year, SPACs produced about one-quarter of all U.S. IPO fees, which is more than the entire Healthcare or Energy sectors. However, unlike the Healthcare or Energy sectors, SPAC deals are controlled by a small group of underwriters – Citi, Deutsche Bank, Credit Suisse, Goldman, and Cantor combine for almost 80% of the fee pool. Other banks won’t necessarily be left out of the SPAC boom though. The 30+ SPACs now seeking deals could generate up to $1b in sell-side advisory and debt financing fees over the next two years.

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