, Columnist
Hedge Funds Love SPACs But You Should Watch Out
Retail investors need to understand the role hedge funds play in seeding SPACs. The two groups’ interests aren’t always aligned.
Not all shares pop like Fisker’s.
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Free lunches don’t last long in finance but hedge funds have identified a temporary exception to that rule: the special purpose acquisition company, or SPAC.
North American SPACs have raised almost $70 billion this year in initial public offerings, according to Bloomberg data, and a big chunk of that money comes from the hedge fund industry. Some funds hold scores of SPACs and it’s been a lucrative bet.