Slowdown in SPAC issuance healthy for markets, sponsor behind Forbes deal says
- Investors are shifting their focus from growth companies to a more balanced approach, according to L2 Capital’s Jonathan Lin
- L2 Capital-sponsored SPAC agreed to acquire Forbes publisher last week
A slowdown in issuance by special purpose acquisition companies (SPAC) after a blockbuster start this year is “healthy” for the market and will help sustain the appetite for the investment vehicle going forward, according to the co-founder of L2 Capital Management, a Hong Kong-based private investment firm and blank-cheque company sponsor.
There was a “mismatch” in market dynamics to begin the year, with investors focused on growth stories and placing little focus on valuations, said Jonathan Lin, who also serves as CEO of Magnum Opus Acquisition, a Hong Kong-based SPAC. That has since shifted as investors look for companies set to benefit from a post-Covid-19 recovery and place a greater focus on valuations, he said.
“A lot of the SPAC targets are pro-growth, but the market demand for assets has shifted to something more balanced,” Lin said. “My view is that in the next three to six months, we’ll see more of a rebalancing. The SPAC sponsors working on transactions will have targets that better match current investor demand.”
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