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Illustration: Aïda Amer/Axios

The SPAC boom is beginning to show its first cracks, as several private equity-sponsored efforts have needed to downsize.

Driving the news: Cerberus yesterday shrunk the anticipated IPO for its telecom-focused SPAC from $400 million to $300 million.

  • Riverstone Holdings' third SPAC yesterday raised $200 million in its IPO, after downsizing from $300 million.
  • H.I.G. Capital filed to raise $450 million for a SPAC in late September, but on Thursday cut the proposed size to $325 million.
  • MPM Capital raised $85 million for its debut SPAC Thursday, after originally filing to raise $100 million.

To be sure, plenty of private equity-sponsored SPACs have continued to hit their targets, and some have even upsized. But the offering glut has let investors become a bit more choosy — if only for allocation reasons, given the relatively low upfront risk — and private equity is increasingly finding itself on the short end.

  • One banking source suggests that there are concerns that private equity prowess won't always translate to the public markets, particularly when put up against SPACs from hedge fund managers and former CEOs of listed companies.
  • Another adds that private equity investors focus mostly on their "day jobs," whereas the SPACs are viewed as opportunistic second fiddles.
  • Historical performance data on PE-backed SPACs vs. the pack is considered anachronistic, since the SPAC market has never before seen this sort of volume.

The bottom line: The SPAC space is evolving fast, and what's true today could be false tomorrow. But right now there's a flight toward sponsors that don't spend most of their time taking companies private.

Go deeper

Affirm files for IPO

Illustration: Annelise Capossela/Axios

Affirm, a fintech company that lets online retailers provide pay-later options for customers, has filed to go public.

Why it matters: The company, founded by PayPal co-founder Max Levchin, is the latest Silicon Valley "unicorn" to file for an IPO as the year draws to a close. A number of tech companies are rushing to go public before the end of the year, including Airbnb and DoorDash, with Roblox and others also rumored to be in the pipeline.

Updated 25 mins ago - Politics & Policy

Sen. Kelly Loeffler to return to campaign trail after 2nd negative test

Sen. Kelly Loeffler addresses supporters during a rally on Thursday. Photo: Jessica McGowan/Getty Images

Sen. Kelly Loeffler's (R-Ga.) campaign announced Monday that she "looks forward to getting back out on the campaign trail" after testing negative for COVID-19 for a second time, following earlier conflicting results.

Why it matters: Loeffler has been campaigning at events ahead of a Jan. 5 runoff in elections that'll decide which party holds the Senate majority. Vice President Mike Pence was with her on Friday.

Updated 5 hours ago - Politics & Policy

Key government agency says Biden transition can formally begin

General Services Administrator Emily Murphy. Photo: Alex Edelman/CNP/Getty Images

General Services Administrator Emily Murphy said in a letter to President-elect Joe Biden on Monday that she has determined the transition from the Trump administration can formally begin.

Why it matters: Murphy, a Trump appointee, had come under fire for delaying the so-called "ascertainment" and withholding the funds and information needed for the transition to begin while Trump's legal challenges played out.