How financing SPAC takeovers became Wall Street’s new favorite trade


Matteo Colombo | DigitalVision | Getty Images

For most investors these days, it’s literally a “PIPE dream.” 

PIPEs, or private investments in public equity, are mechanisms for companies to raise capital from a select group of investors outside the market. But as PIPEs are increasingly being deployed in conjunction with a surge in SPAC mergers, a larger group of fund managers are seeking access to this security, with limits on who and how many can invest. 

While SPACs, or special purpose acquisition companies, will tap the public markets to raise capital to fund a future takeover, PIPEs are allocated to a small group of investors. Managers of the funds participating in the PIPE will sign a…


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