GPs dismiss Spacs' threat to dealflow, pricing - survey

Despite fears that the Spac boom in the US would threaten private equity firms' dealflow and push valuations upward, just 1% of respondents to the survey said they consider Spacs to pose a "very high" threat, Investec said.

UK-based GPs are most likely (40%) to dismiss the threat of Spacs entirely, although 9% see them as a "somewhat or very high" threat. North American managers are less likely (15%) to totally dismiss the competition of Spacs, but they are deemed to pose a "very low" threat by almost half (48%) of US respondents.

The managers of large buyout funds feel most threatened, being the least likely to dismiss the threat entirely and most likely to say that they pose a "somewhat high" threat (14%) to their dealflow.

Investec worked with MJ Hudson to survey 219 private equity professionals between April and June 2021; 40% of respondents are UK-based, 31% North American, 18% in mainland Europe and 11% elsewhere.

Other results of the survey included the overwhelming majority of respondents (97%) expecting their returns to exceed (67%) or match (31%) those achieved in 2020.

The survey also indicates that PE managers expect teams to be back in the office on a wide scale when allowed: no respondent expects to work fully remotely, with 78% expecting to work at least three days in the office and just 22% expecting to be in the office only one or two days per week.

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• Topics
• GPs
• Investec
• SPACs