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SPACs turn to hedge funds for funding as investor interest wanes

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Short-term deals with hedge funds are being used by those looking to list companies via Special Purpose Acquisition Companies (SPACs), according to a report by the Financial Times.

Investor interest in SPACS has cooled since reaching a peak during the global pandemic with many choosing to withdraw their cash from the blank cheque companies before mergers with target companies can be completed.

The report says increased regulation, poor performance and a string of scandals have seen investor redemption rates increase with companies such as hedge fund Atalaya Capital Management and private equity company Apollo stepping in to fill the gap by purchasing shares from investors looking to withdraw their money.

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