Apollo Global Management Inc (APO.N) is raising $500 million for a fund to invest in special purpose acquisition companies (SPACs), the buyout firm’s latest move to capitalize on the investment trend, people familiar with the matter said on Tuesday.
Apollo’s fund, one of the first of its kind, will buy stakes in the initial public offerings and private placements of SPACs, as well as provide liquidity to SPAC managers by acquiring their founder shares, the sources said, requesting anonymity because the matter is confidential.
An Apollo spokesperson declined to comment.
SPACs are shell companies that raise money from stock market listings with the purpose of merging with a private company and taking it public.
Only 14 out of 144 announced SPAC deals are currently trading above the IPO price of $10 a share, SPAC Research data showed.
The SPAC and New Issue ETF (SPCX.P), which invests at least 80% of its assets in SPACs, has fallen by roughly 2% since mid-June, despite the wider stock market rally. From February, the height of the SPAC boom, the ETF is down 12%, according to Refinitiv.
Apollo has launched its own SPACs. One of them, Spartan Energy Acquisition Corp, merged with Fisker Inc (FSR.N) last year, valuing the electric vehicle maker at $2.9 billion. Fisker shares on Tuesday afternoon were trading at around $13.78, down from a high of $28.50 in late February.
Earlier this year, another Apollo-backed SPAC, Spartan Acquisition Corp II, announced plans to take Sunlight Financial Holdings Inc (SUNL.N) public in a deal valuing the solar panel lender at $1.3 billion. Sunlight shares have tumbled, trading at $5.46 on Tuesday, roughly half the original IPO price.
Apollo has $471.8 billion in assets under management in credit, private equity and real estate.