GCM Grosvenor Merges with SPAC to Go Public

GCM Grosvenor will go public after merging with a special purpose acquisition company (SPAC) sponsored by Cantor Fitzgerald.

The alternative asset manager will close a $2 billion transaction with the Cantor Fitzgerald-affiliated SPAC called CF Finance Acquisition, the firm said Monday. The combined company will be listed on the NASDAQ stock exchange.

“We believe that becoming a publicly listed company will benefit our clients, our team members, and all of our stakeholders,” said Michael J. Sacks, chairman and chief executive at GCM Grosvenor, who will continue to lead the alternative asset manager.

“We have long valued having external shareholders and we wanted to preserve the accountability and focus that comes with that,” he added.

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GCM Grosvenor will hold a 70% stake in the company. Cantor Fitzgerald, stakeholders of its SPAC, and other institutional investors will own the remaining shares. A minority investor, Hellman & Friedman, will also sell its equity interest in the company after the transaction.

Investors generally do not know what companies they are funding when they invest in SPACs, which private firms use to acquire another company through an initial public offering (IPO). But the so-called “blank check companies” are enjoying a surge of interest during the pandemic from investors seeking easier, less risky ways to take firms public.

Midway through the year, 57 SPACs have already gone public, compared with 59 companies for all of 2019, according to data from SPACInsider. What’s more, gross proceeds from sales have already topped $22.5 billion, versus the $13.6 billion in sales last year.

Last month, Bill Ackman’s hedge fund, Pershing Square Capital Management, raised $4 billion in the largest SPAC offering ever.