Behold: The Most Incestuous SPAC Deal Yet

Behold: The Most Incestuous SPAC Deal Yet

We move a step closer to the inevitable SPAC merging with itself.

As we, the SEC and everyone else has noted, there are a lot of SPACs out there these days, and a lot more in the pipeline. Many more, in fact, than have yet found targets willing to consummate a merger, much to the chagrin of Bill Ackman and Meg Whitman. And, annoyingly, asset managers have been taking themselves off the table by merging with each other rather than with a SPAC, which is obviously how it is supposed to work nowadays.

Securing a deal, therefore, requires a bit of creativity, and have Dyal Capital Partners, Owl Rock Capital Partners and HPS Investment Partners ever done so with this extraordinary circle-jerk: In essence, an asset manager that invests in hedge-fund stakes (Dyal) is simultaneously spinning off from its owner (Neuberger Berman) by merging with a SPAC backed by a hedge fund (HPS) that is partially owned by said asset manager, and merging with a second hedge fund (Owl Rock) that is also owns a chunk of, in which Frankestein’s monster the former parent will remain a major investor. Makes total sense, right?

Dyal and Owl Rock said they have been discussing a deal with a special-purpose acquisition company called Altimar Acquisition Corp.

The Wall Street Journal earlier reported on the transaction, which would value the combined asset managers at about $13 billion, according to people familiar with the matter….

Dyal has previously floated the idea of an IPO of one or more of its funds as a possible way to allow its investors the option of monetizing their holdings, the Journal has reported. The transaction being discussed, however, is an IPO of the management company and wouldn’t alter the liquidity opportunities for fund investors.

Of course: Who would want to undertake a complicated financial transaction to benefit them? And who says SPACs are just back-slapping masturbatory nonsense that will end in tears?

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