SPACs One Year Later: A Bust for Investors and A Boon for Banks

This commentary looks at the changes in the SPAC market in the year since its surge in popularity, including potential regulatory changes as well as the impact on financial institutions.

Key highlights include the following:
-- Further regulation of the SPAC market is on the horizon, with regulators seeking to equalize requirements between traditional and SPAC IPOs.
-- Global banks' revenues are poised to benefit in the short to medium term from the pipeline of fees created by the SPAC boom, which may offset lost revenues stemming from the market volatility created by the Russia-Ukraine conflict.

“Overall, we see banks with diversified capital markets business models as the main beneficiaries of the SPAC boom in the short to medium term as SPACs begin to mature in their lifecycles and require additional advisory services to complete their acquisitions. However, with regulation of the SPAC market poised to ramp up in the near future, it is likely that we will begin to see this pipeline gradually dry up,” said Cheryl Saldanha, Assistant Vice President, Global Financial Institutions Group.