Jefferies
Pulled back from SPACs in 2022
Fees Earned
$400.0M
SPACs Underwritten
35
Bankrupt SPACs
2
Bankruptcy Rate
5.7%
Overview
Jefferies positioned itself as a go-to bank for growth-oriented SPAC deals, earning approximately $400 million in fees. The mid-tier investment bank punched above its weight in the SPAC market, handling deals that larger banks passed on. Many of these deals, predictably, performed poorly as they involved earlier-stage companies not ready for public markets.
Average Client Return
Average return for investors who held SPAC-merged companies underwritten by Jefferies. The bank collected its fees at IPO regardless of subsequent performance.
Notable Deals
The Fee Structure Problem
SPAC underwriters like Jefferies typically earned 2% of the IPO proceeds upfront, with an additional 3.5% deferred fee paid at deal completion. On 35 SPAC IPOs, this generated approximately $400.0M in fees.
Crucially, these fees were earned regardless of whether the SPAC found a good target or whether investors made money. The deferred fee was paid from the trust at merger completion — meaning the bank had every incentive to push mergers through, even with subpar targets.