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Lawyers are lining up to take on Spacs. Is the UK market at risk?

As class actions circle US Spacs, investors in the City might also have cause to take on sponsors

Spacs are enjoying a surge in popularity in the US. To some extent, the UK may follow suit, but this has not yet been seen to the same degree
Spacs are enjoying a surge in popularity in the US. To some extent, the UK may follow suit, but this has not yet been seen to the same degree Photo: Johannes Eisele/Getty Images

Special purpose acquisition companies are not a new phenomenon. They have existed in various forms since the 1980s. But recently, Spacs have been enjoying a sharp rise in popularity as another avenue to access equity capital markets, particularly in the US.

Spacs are companies which are incorporated solely for making acquisitions of other corporate entities. They often target one particular sector or market, and those who sponsor them will profess industry experience and knowledge of the market to help seal the acquisitions.

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