Jason Mudrick looks like the King of the SPAC universe. At least for now.
Since Mudrick Capital Acquisition Corporation II announced its merger with the iconic trading cards company Topps on April 6, the stock has surged to above $20 per share.
The stocks of most other blank-check companies that have announced — but not yet completed — deals are currently straddling their IPO price of $10, however.
“Once you announce the deal, the market adjudicates whether the deal is a good one or not,” Mudrick said in a recent phone interview. “The market is applauding our deal. This doesn’t mean there are not good deals out there.”
Mudrick earlier told Institutional Investor that Topps’ “universally recognized brand” puts it in a strong position in the NFT, or non-fungible token, market. “With blockchain, that will allow the company to participate in the secondary market trading of collectibles for those that want to trade digital,” he said.
The Topps deal has also attracted some smart money.
O. Andreas Halvorsen’s Viking Global Investors disclosed in a regulatory filing as of April 6 that it owned 9.6 percent of the shares.
The SPAC merger, however, is not the only big event in Mudrick-ville.
Mudrick Capital Management is expecting to have raised about $80 million to $100 million by this Friday when it marks the first close of Mudrick Distressed Opportunity 2020 Dislocation Fund, its latest drawdown fund designed to capitalize on the dislocation that occurred last year from the pandemic, according to an investor in the fund.
Mudrick describes this fund as a hybrid capital-call vehicle, according to an offering document that a client earlier shared with II. The fund will only have an 18-month investment period.
The firm is aiming to raise between $200 million and $300 million by the fund’s final close, which is scheduled for July, according to the investor.
The fund will focus on middle market, off-the-run credit opportunities that the Mudrick team feels are overlooked by larger credit managers, according to the document. It will have “limited energy exposure” but have “potential exposure to physical commercial real estate assets.”
“Market dynamics over the last decade have set the stage for the next significant distressed cycle,” the firm said in the offering document. “The global economy is facing unprecedented levels of disruption. As a result of this dislocation, the opportunity set for distressed credit has grown materially.”
Mudrick’s first drawdown fund, Mudrick Distressed Opportunity Drawdown Fund I, was launched in March 2016 and has generated a net annualized return of 21.5 percent, according to an investor.
Mudrick Distressed Opportunity Drawdown Fund II, launched in April 2019, has generated a net return of 24.5 percent. Mudrick also launched a sidecar to that vehicle last June, available to existing investors.
Drawdown vehicles generally resemble private equity funds, with a fixed term and capital-call structure. Mudrick’s five-year term includes a three-year investment period and two years for harvesting gains.
Meanwhile, the firm’s hedge fund is enjoying an excellent year.
The Mudrick Distressed Opportunity Fund was up about 15 percent in the first quarter and 21.1 percent through Friday April 23, according to an investor. The fund, which specializes in distressed or post-restructuring investments, has posted double-digit gains in at least four of the five previous years, according to a hedge fund database.
Performance this year has been driven by various credits in theater giant AMC Entertainment, satellite company Globalstar, bonds of shared office company WeWork, and Thryv Holdings.
Mudrick is the largest shareholder of Thryv with more than 55 percent of the shares. The software as a service company is also Mudrick’s largest U.S. common stock long position accounting for more than one-third of the stock portfolio.
