A new range of boutique banks are bringing new enthusiasm to blank companies, one of the hottest and most controversial products during the Wall Street pandemic.
Special purpose harvesting vehicles, or SPAC, exploded during the COVID-19 crisis, and in the U.S., about 600 deals raised a record $163 billion in 2021, with Frenzy falling as interest rates rose due to global stocks falling the following year.
But the market has risen again since Donald Trump won his second president, and his tariffs have caused volatility despite delaying several traditional IPOs. Dealogic data shows that 44 SPAC products raised $9 billion this year, while all raised $9.6 billion in 2024.
SPAC is a tool that provides IPOs for private companies; blank check companies are listed in public markets and then merged with targets.
According to former SEC chairman Gary Gensler, regulators will be consistent with the merger of listed SPAC companies with standard IPOs. Investors expect he is nominated by Trump under the leadership of the new SEC chairman Paul Atkins.
Four years ago, Credit Suisse, Citibank, Deutsche Bank and Jefferies were among the busiest SPAC consultants. But a group of lesser-known companies, including Cohen and Corporate Capital, D Boral Capital, Clear Street and Maxim Group, have dominated the industry since.
"The deck chairs have been reordered since the Gensler era," said Matthew Michel, founder and managing partner of InvestorLink Capital Markets.
“When the SEC targets SPACs by creating an uncertain regulatory environment, big banks tend to idle their SPACs to initiate business,” Michel said. “This pathway to fill the gaps into smaller players.”
Since 2022, there is no suggestion than Cohen & Company's more transactions between seeking public SPACs and seeking public groups (a process known as DE-SPAC). Cohen & Company also served as a SPAC IPO with Cantor Fitzgerald this year.
Brandon Sun, head of SPAC investment banking at Cohen & Company, previously worked at Deutsche Bank until he and three colleagues were released in 2022 after their names appeared on strip club bills, although Sun said he was not in the competition. Cohen & Company quickly snatched him away.
"2025 was originally a year for IPOs," Sun said. "These hopes have been undermined and suppressed given the volatility caused by Trump's tariff policies.
D Boral Capital has ranked second in DE-SPAC transactions over the past three years. In 2022, the bank (then called EF Hutton) helped Trump’s social list of truth through a merger with the Digital World acquisition company.
Median price performance of 17 private companies that merged with SPAC this year fell 73% according to data provider listing Track. During the earlier boom, many people also suffered steep falls.
ListingTrack's Nick Gershenhorn said that despite the changes in the major underwriters in the SPAC market, many of the same sponsors during the pandemic have been “re-entered into the game.”
Former Citigroup executive Michael Klein is a prolific SPAC sponsor in 2020 and 2021. His latest blank Cheque company Churchill Capital X was submitted for public release in late April. Serial sponsors including bank entrepreneur Betsy Cohen, Los Angeles billionaire Alec Gores, and former California Congressman and Trump Media and Technology Group CEO Devin Nunes have also been involved in the SPAC deal in recent months.
Leaded by Brandon Lutnick, SPAC, the son of U.S. business secretary Howard Lutnick and chairman of Cantor Fitzgerald, raised $100 million last year and merged with Twenty-one Capital in April to form a Bitcoin acquisition tool with Michael Saylor's image of a Bitcoin-focused group strategy. Its stock has tripled since the announcement of crypto trading.
SPAC market participants Credit Cantor and new cars recently reopened by brokers to market sponsorship. "The sponsor's year is someone who knows how to complete the deal," Sun said.
Investors say that even if the traditional IPO market starts to thaw, the SPAC dash is unlikely to slow down, hoping Trump’s worst tariff threat is over.
"All the usual suspects are back. If they haven't returned yet, they will be back soon," said a large SPAC investor who doesn't want to be named. “People don’t care (SPAC) used to be a disaster because they want to support traders and guys who do something.”
Will Schmitt's other reports in New York