Former Goldman Sachs CEO Gary Cohn has joined Blue Harbour Group founder and CEO Clifton Robbins in the growing list of financiers who have jumped on the SPAC bandwagon.
Cohn and Robbins are among the latest prominent Wall Street execs to join the race for SPAC dollars in the midst of a record fund-raising year for the blank-check companies. So far, SPACs have raised more than $32 billion in 2020, according to data provider SPAC Analytics.
The two men, whose relationship goes back more than 20 years, hope to raise $600 million in the IPO of CohnRobbins Holdings Corp., according to a registration statement filed with the Securities and Exchange Commission on August 25. Robbins had previously planned to offer a $300 million SPAC but now Cohn is listed as a co-sponsor in a deal twice its size.
Disclosure of the new SPAC comes a week after hedge fund Starboard Value announced its intention to raise $300 million for its eponymous SPAC, another in the string of hedge fund SPAC deals. These announcements follow the July launch of Bill Ackman’s $4 billion SPAC IPO as well as the runaway success of three SPACs over the past year or so: Virgin Galactic, Nikola, and DraftKings.
Though much smaller than Ackman’s Pershing Square Tontine Holdings, the sum Cohn and Robbins hope to raise is larger than average. The average amount raised by 81 SPACs this year is $404 million, according to SPAC Analytics.
“We believe there are attractive trends in several particular industries where we have expertise, including consumer and, within the technology sector, software and fintech. We intend to target large, private equity and venture capital-owned assets, founder-led businesses and corporate carve-outs where our insights, expertise and networks can provide advantaged solutions to create value,” the CohnRobbins registration statement said.
Both financiers have recently left high-profile jobs.
Cohn, who left Goldman to join President Trump’s cabinet as chief economic advisor and director of the National Economic Council in 2017, is now an investor in privately held technology companies. He quit the administration in 2018 after Republicans pushed through a major corporate tax cut and the financial deregulation he trumpeted.
Earlier this year Robbins announced his decision to turn his Blue Harbour hedge fund into a family office and return all outside capital. It will finish returning money to fund investors by the end of this quarter, and after that Robbins “intends to devote substantially all of his business time to our company,” according to the SEC filing.
In searching for its merger partner, the filing said the SPAC will be targeting the size of companies that Blue Harbour specialized in.
“We intend to capitalize on the approximately 70 years of combined experience of our co-founders… in investing and managing capital across markets and industries, structuring transactions, and building businesses, and on their respective and complementary vast and unique global networks of relationships to source and diligence transaction opportunities and add post-transaction value,” the registration filing, signed by Robbins, stated.
Separately, last week another hedge fund-sponsored SPAC went public when Star Peak Energy raised $350 million. The company’s founders include Magnetar Capital, and Star Peak’s CEO is Eric Scheyer, a partner at Magnetar who has served as the head of the Magnetar energy and infrastructure group since inception.
Michael Morgan, the co-founder, chairman, and CEO of asset management firm Triangle Peak Partners, is another sponsor of Star Energy and will serve as its chairman.
Magnetar also surfaced as an anchor investor in a $150 million SPAC filed August 25 called Good Works Acquisition Corp., which will donate 750,000 sponsor shares to charity. The sponsor is an affiliate of I-Bankers, and the SPAC will focus on companies in financial distress or just emerging from a restructuring.
