Starboard Value LP said on Tuesday it plans to raise US$300-million through a blank-cheque acquisition vehicle, becoming the latest major hedge fund to jump on this year’s frenzy for such deals.
Starboard, launched in 2011 by chief executive Jeffrey Smith, joins the ranks of William Ackman’s Pershing Square Capital Management LP and Daniel Loeb’s Third Point LLC that have also raised these pools of capital, known as special purpose acquisition vehicles (SPACs).
SPACs have raised US$22.5-billion this year to spend on deals, exceeding the record US$13.6-billion raised in 2019, as more private companies choose them as an alternative to initial public offerings.
There are 104 SPACs, which have raised together US$32.4-billion, currently chasing deals, according to SPAC Research.
Starboard, which has US$5.8-billion in assets under management, said in a regulatory filing the new vehicle will be called the Starboard Value Acquisition Corp. (SVAC). It will use the money it raises in an IPO to acquire a company that it has not identified in advance.
Mr. Smith will be SVAC’s chairman and M.J. McNulty, a Starboard executive, will lead the new vehicle as CEO, the filing said.
SVAC counts Nigel Travis, a former CEO of Dunkin’ Brands Group Inc.; Greg Waters, a former CEO of Integrated Device Technology; Erin Russell, a former principal at middle-market private equity firm Vestar Capital Partners; and Anthony Sanfilippo, a co-founder of investment firm Sorelle Capital, as its industry advisers.
Starboard, which has secured more board seats at companies than any other hedge fund this year, is known for its operational expertise and for ushering in changes at companies ranging from Darden Restaurants Inc. to Papa John’s International Inc.
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