Special purpose acquisition companies are having a moment in the sun, and they’re making their way into the wealth management industry, Larry Roth, founder and managing partner of RLR Strategic Partners, told Barron’s.
Though they have been around in some form since the 1990s, SPACs have grown in popularity in recent years. As of Dec. 1, there were 201 IPOs of SPACs in 2020, with gross proceeds of $69.6 billion, according to SPACInsider, more than double the 59 transactions in 2019.
With the acquisition frenzy that’s swept the wealth management industry in recent years, will it be long before SPACs come calling on RIAs and broker-dealers? To be sure, wealth management firms should conduct full due diligence on any acquisition suitor who comes calling. That said, if and when the moment comes, a SPAC might make the most sense for some late-growth-stage companies as a way to raise financing that doesn’t carry the baggage or costs of traditional IPOs, debt or direct private-equity buyouts.
Below, some of the best analysis and insight from WSJ writers and columnists, the Dow Jones Newswires team and occasionally beyond, on investing, the wealth-management business and more.