September 12, 2022
13F Ownership
What can we learn from 13F filings?
Our 13F SPAC Portfolio Tracker offers an instructive look at how the market has been positioned through the first half of an eventful year for SPACs.
We've examined this intel several times before. The SPAC asset class grew dramatically through 2020 and 2021. But institutional ownership didn't represent all of the growth over that time. You can see below that the market cap of all SPACs grew to nearly $200bn last year. But reported 13F ownership didn't get over $160bn until December 2021.
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We added a black line to the chart above representing the percentage of SPAC market cap owned by 13F filers. You can see it fell to under 75% in March 2021 at the peak of retail enthusiasm. But it's climbed steadily since then to over 90% now.
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As the space has begun to shrink, institutional ownership is growing again. Intuitively this isn't surprising: it's much more appealing to earn a couple hundred basis points' spread over Treasurys if you manage a large institutional portfolio than if you're speculating in a Robinhood account.
Retail has mostly left the market and yield-seeking hedge funds are most of what's left.
It's also interesting to see how dramatically the top ten 13F owners have increased their holdings, from 20% to nearly 25% of the entire market over the past year or so.
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We saw our first ever $6bn SPAC portfolio at the end of Q2, and a number of other large holders have increased their allocations as well.
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It's not always easy to identify what's going on with portfolio decisions. Some of the filers above may be running a single SPAC strategy while others are pod shops. But for any levered player the cost of capital is a key factor in portfolio decisions -- and that number flows directly from the fed funds rate, which is up over 200 basis points in 2022 with more hikes to come.
As the SPAC asset class has fallen out of favor, the number of 13F filers reporting SPAC positions has fallen from its peak of over 1300 to just under 900 as of June 30.
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A lot has happened since the end of Q2. A handful of SPACs have moved their trust accounts to cash, a development we highlighted recently when we published our expectations for SPACs' Q3 trust account earnings.
Our estimates incorporate those that have given direct guidance they're no longer earning interest. But it seems clear that more will follow -- though we can't forecast how many or which ones.
Given that, it seems likely that the median yield is too optimistic. But there will clearly be a big spread in trust account earnings between those that remain invested and those that do not.
Like everything else in SPAC-land right now, the yield market rests at the mercy of the SEC's decision-making timeline. SPACs still provide a massive edge in yield over short-term Treasurys. But the big question is whether SPAC trusts can remain invested without being designated an "investment company."
We've seen lots of large block trades in SPAC common shares in recent weeks. But we'll have to wait until mid-November to see the effect of these moves on the 13F portfolio leaderboard.
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News From the Past Week
Deal News
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PONO Capital Corp (PONO) announced a deal to acquire AERWINS Technologies, a developer of technologies to enable air mobility. The deal reflects an enterprise value of $600mm and is expected to close in Q4 2022 or Q1 2023.
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Lakeshore Acquisition II Corp. (LBBB) announced a deal to acquire Nature's Miracle Inc., an agriculture technology company. The deal reflects an enterprise value of $265mm and is expected to close in Q1 2023.
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Minority Equality Opportunities Acquisition Inc. (MEOA) announced a deal to acquire Digerati Technologies, a provider of cloud services specializing in UCaaS (Unified Communications as a Service) solutions for the small to medium-sized business market. The deal reflects an enterprise value of $145mm.
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ABRI SPAC I, INC. (ASPA) announced a deal to acquire DLQ, a provider of digital consumer acquisition solutions and a wholly-owned subsidiary of Logiq (OTCQX: LGIQ). The deal reflects an enterprise value of $114mm and is expected to close in Q1 2023.
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Lux Health Tech Acquisition Corp. (LUXA) announced it has signed a LOI with an unspecified life sciences company addressing unmet needs in some of the most costly and debilitating segments of healthcare.
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CleanTech Acquisition Corp. (formerly CLAQ) closed its acquisition of Nauticus Robotics on Friday 9/9/2022 with 8% of public shares remaining. Ordinary shares and warrants will begin trading on the NASDAQ as “KITT” and “KITTW” beginning Monday 9/12/2022.
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Cohn Robbins Holdings Corp. (CRHC) shareholders approved the company’s acquisition of Allwyn Entertainment at a meeting Wednesday 9/7/2022. Redemption statistics were not provided and no closing timeline was given.
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Golden Path Acquisition Corporation (GPCO) shareholders approved the company’s acquisition of MC Hologram at a meeting Thursday 9/8/2022 with 62% of public shares remaining. No closing timeline was given.
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New S-1's
There were no new S-1's last week.
Liquidations
There were no SPAC Liquidations last week.
IPOs
| Name |
Ticker |
Raised ($mm) |
Sector |
Cash in Trust |
Coverage |
| EF Hutton Acquisition I |
EFHT |
100 |
Consumer |
101.0% |
W+R |
Registrations Withdrawn
| Name |
Ticker |
Size ($mm) |
Underwriter |
Trust Funding |
Coverage |
| Seven Oaks II |
SVOB |
250 |
JonesTrading |
101.0% |
1/2 |
| INSU Acquisition IV |
* |
220 |
CF |
100.0% |
1/4 |
| DD3 Acquisition III |
DIII |
150 |
MS |
100.0% |
1/3 |
| UTXO Acquisition Inc. |
UTXO |
50 |
Univest Securities |
101.5% |
W+R |
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Charter Extensions
- BSGA extended its charter through 12/14/2022 with a single $0.10 per share sponsor contribution to trust.
- CRHC extended its charter through 12/11/2022 with no sponsor contribution to trust.
- LAAA extended its charter through 12/15/2022 with a single $0.0125 per share contribution to trust and 52% of public shares remaining.
- GACQ extended its charter through 12/11/2022 with a single $0.10 per share sponsor contribution to trust.
- DWAC extended its charter through 12/8/2022 with a single $0.10 per share sponsor contribution to trust. The company also adjourned its charter extension approval meeting until October 10 to allow for time to solicit more votes.
- TWND extended its charter through 1/9/2023 with a single $600,000 ($0.19 per share) sponsor contribution to trust and 10% of public shares remaining.
Upcoming Meetings and Deadlines
- 9/13/2022 BREZ Charter extension meeting (liquidation deadline 9/26/2022)
- 9/13/2022 KCA Amprius Technologies approval meeting (merger outside date 11/12/2022)
- 9/13/2022 PIAI Charter extension meeting (liquidation deadline 9/14/2022)
- 9/13/2022 FLAG Charter extension meeting (liquidation deadline 9/14/2022)
- 9/14/2022 DWIN Charter extension meeting (liquidation deadline 9/15/2022)
- 9/14/2022 DWIN Foxo Technologies Inc. approval meeting (merger outside date 7/24/2022)
- 9/14/2022 VTAQ Presto approval meeting (merger outside date 8/31/2022)
- 9/15/2022 CFVI Rumble approval meeting
- 9/15/2022 ALSA Liquidation deadline (pending optional $0.033 deposit extension)
- 9/16/2022 PMVC Charter extension meeting (liquidation deadline 9/24/2022)
- 9/16/2022 IMPX LiveWire approval meeting (merger outside date 9/30/2022)
- 9/16/2022 PAFO Liquidation deadline (pending optional $0.10 deposit extension)
- 9/17/2022 AEHA Liquidation deadline (pending optional $0.10 deposit extension)
- 9/18/2022 EQD Liquidation deadline
- 9/19/2022 HHGC Charter extension meeting (liquidation deadline 9/23/2022)
- 9/22/2022 NMMC Liquidation deadline
- 9/22/2022 AMAO Liquidation deadline
- 9/22/2022 BOAC Charter extension meeting (liquidation deadline 10/30/2022)
- 9/22/2022 GACQ GP Global Limited, Luminex Home Decor & Fragrance Holding Corporation approval meeting (merger outside date 12/11/2022)
- 9/23/2022 GIA Charter extension meeting (liquidation deadline 9/28/2022)
Links
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The SEC charged Perceptive Advisors for failing to disclose SPAC-related conflicts of interest. Without admitting or denying the findings, Perceptive agreed to a cease-and-desist order, a censure, and a $1.5mm penalty to settle the charges.
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Tech In Asia reported that Wanshun Car-Hailing, a ride-hailing platform based in China’s Shenzhen, is set to go public in the US this year through a SPAC.
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Pershing Square SPARC Holdings, Ltd./De (formerly PSTH) filed an amendment to its prospectus specifying, among other things, that SPARs will only be tradeable after entry into a definitive agreement, that previous holders of PSTH will receive one SPAR per four shares held and one SPAR per two warrants, and that SPARs will expire 10 years after distribution.
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Trump Media & Technology Group issued a statement regarding its proposed merger with Digital World Acquisition Corp. (DWAC), stating that “the SEC has needlessly delayed its review of our proposed merger, causing real and unnecessary financial harm to DWAC investors, roughly 90 percent of whom are small, retail shareholders whom the SEC is chartered to protect.”
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Disclosures: Site administrators may maintain positions in various SPAC securities and may trade in or out of those securities at any time without notice. Information from spacresearch.com is provided for informational purposes only and should not be relied upon as the basis for any investment decision. Nothing on spacresearch.com is a recommendation or solicitation to buy or sell any investment.
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