As special purpose acquisition companies continue to gain influence in the market, another with backing by a major hedge fund could soon be on the way.
The hedge fund Elliott Management Corp. is now eyeing getting into the action. That’s according to a report in the Wall Street Journal on Sunday, saying that the fund has been chatting with investment bankers about raising $1 billion for a special purpose acquisition company.
Elliot did not immediately respond on Sunday to an electronic message from TheStreet seeking comment.
Special purpose acquisition companies — or SPACs — are corporations that have little function but to get around the traditional process of taking private companies public. They raise money and then merge with firms already operating, bringing them public. Dozens of SPACs were formed since just last summer.
“Assuming Elliott moves forward, it could use the proceeds to buy a sizable company — potentially worth double-digit billions based on the targets similarly sized blank-check companies have agreed to combine with,” wrote the Journal about the potential effort.
Nearly 400 SPACs are currently active and more than 100 readying for initial public offers, according to SPAC Research.
Elliott was founded in 1977 by billionaire Paul Singer. Singer is an activist investor and philanthropist known for supporting rights of gays and lesbians. He is also the founder of The Paul E. Singer Foundation and co-founder of Start-Up Nation Central, as well as the chairman of the Manhattan Institute for Policy Research.
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