spac companies

Blowing bubbles: What are blank cheque companies?

Inside the mysterious new investment trend that has taken the billionaire class by storm

You can buy a private jet, a private island, a football team, a timeshare on Mars… Hell, you can even buy a president if you like. But the true status symbol of the new billionaire class is something more understated, more misunderstood, more mysterious, more, well, bubbly. Your very own blank cheque company. Otherwise known as Special Acquisition Companies (or SPACs), these are the latest highly-gaseous, highly-geared investment tools that have taken your favourite billionaires by storm. But what are they? What do they mean for the rest of us? And how can you get in on the fun?

What is a SPAC?

A SPAC is an investment vehicle that goes public despite not really doing much or owning anything — yet. The plan is to raise lots of cash from keen investors and use it to buy into another company — usually a private company that hasn’t been picked yet. Essentially, the owners of the SPAC say: ‘give us your money (lots, please) and we’ll decide what to do with it later.’

If that seems like a topsy-turvy, back-to-front way of going about things, then fine — that’s because it is. But it’s wildly popular — faddy, even. More than 40% of the IPOs in 2020 by volume have been done in this way, to the tune of some $31.6 billion.

To unlock this article, please subscribe. Benefits include:

  • Offers, benefits and access to exclusive clubs, restaurants, bars, gyms, hotels and handpicked brands
  • 2 Bookazines delivered to your door each year
  • 15% off selected brands online with the Gentleman's Journal Shop
  • Events — invitations to a variety of member-only events each year
  • Paywalled content — access to member-only password-protected online features
  • Your own Clubhouse membership card to redeem all the perks
Clubhouse Membership

Clubhouse Membership

Buy Now

Further Reading