SPAC market rebounds, but private equity firms stay on sidelines

Private equity firms remained on the sidelines as the value of global initial public offerings by special purpose acquisition companies climbed to its highest level in at least two years.

The value of SPAC IPOs totaled $18.05 billion globally this year through Sept. 11, the highest level since 2023, according to S&P Global Market Intelligence data. Notably, none of the IPOs received backing from private equity firms.

The SPAC market initially thrived with many successful transactions, attracting private equity firms as sponsors. However, an oversupply of SPACs led to intense competition for limited deals, resulting in lower quality transactions, Jocelyn Arel, partner in global law firm Goodwin Procter LLP's SPAC practice, told Market Intelligence.

"Instead of doing a deal that [private equity firms] viewed as subpar, they just decided to unwind their SPACs," Arel said.

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SPAC volume steady

The current volume of SPAC IPOs in 2025 aligns closely with levels recorded in the previous two years, with 101 filings completed as of Sept. 11. SPAC IPOs, including those with and without private equity support, totaled 107 in 2024 and 101 in 2023.

Arel said the SPAC boom in 2021 highlighted a misunderstanding of SPACs as IPO alternatives rather than sell-side M&A transactions. The focus shifted to maximizing valuations, leaving little room for growth. Consequently, many companies chose to withdraw from pursuing SPAC transactions altogether.

Arel said the SPAC market is experiencing a resurgence, with investors now being more discerning and moving away from unrealistic projections. In 2025 and 2026, SPAC sponsors are reemerging, and private equity firms are likely to utilize SPACs for exits. A disciplined approach is expected to lead to a healthier pipeline of private equity-related deals in the near term, Arel said.

A total of 26 SPACs that launched with private equity backing in the past two years have not yet announced an M&A agreement, according to Market Intelligence data. Ten of those, or 38%, remain active, while the rest have passed their deadline to announce a deal.