Katten conducted a survey of 80 investment professionals in March and a follow-up survey of another 100 investment professionals in May that showed 72 percent of investors working in private equity, venture capital, hedge funds and investment banks, who have participated in a special purpose acquisition company (SPAC) transaction, agree that SPAC IPO activity will increase through 2022.
Katten shared the results of its survey findings in a report titled, "SPAC to the Future: Despite Slowdown, SPACs Continue to Be Viewed as Favorable Investment Opportunities." The purpose of the survey was to address what is causing the increase in SPAC transactions and its recent slowdown. The survey explained why SPAC transactions are more popular when compared to traditional IPOs — including that they offer a simpler and more flexible process.
Key findings from the survey include that the main driving forces behind investors' decisions to participate in a SPAC offering are confidence in the SPAC's prospects for creating value in the eventual merger with a target company and their trust in its team, there is an increase in independent sponsors as SPACs become a primary way to invest, increased scrutiny and litigation from the SEC have contributed to a decrease in SPAC transactions, and 69 percent of investors from the second survey believe that SPACs are a favorable investment opportunity in the long term.
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