Michael Wagner Discusses SPAC Concerns with Family Wealth Report

With billions of dollars raised by hundreds of issuers in just the first three months of 2021, there is no hiding from it: special purpose acquisition companies (SPACs) are booming.

However, as vast numbers of investors continue to run toward these “blank check” companies in hopes of a fast and cost-effective way to receive returns, some experts believe this SPAC phenomenon is a bubble that may soon burst. To learn more about the concerns surrounding SPACs, Family Wealth Report spoke with Omnia Family Wealth Co-Founder and Chief Operating Officer  Michael Wagner for insight.

According to Wagner, his biggest apprehensions are not solely regarding SPACs but also wider signs of market froth.

“We are not currently invested in any SPACs, but we watch the space very closely,” he tells the publication. Wagner believes that in some ways, SPACs can be viewed as a “poor man’s private equity” and that only about 20 percent of SPACs on the market are worth a look since most are driven by hype instead of the quality of the opportunity.

Despite these concerns, the SPAC craze remains, which Wagner says is driven by a long period of low interest rates, social media and many investors sitting on unspent savings during the pandemic with a vast amount of time on their hands and a “fear of missing out.”

Wagner continues to caution his clients, however, that a “storm is coming” even as many investors remain enthusiastic about SPAC investments. “I am not seeing much fear in the market and that concerns me,” he explains.

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