Childs Play

Email of the day comes from Dennis, who noticed I was quoted in a Boston Globe story about J.W. Childs Associates filing to raise a $200 million SPAC. “What gives?” Dennis asked. “Isn’t it better for them to just raise a traditional private equity fund, or is this the beginning of a new trend?”

Yes, Dennis it would be far better for the firm to raise another private equity fund. But that would assume it could, which would be a poor assumption.

The Boston-based firm had tried pre-marketing such a vehicle in 2006, but abandoned the effort due to LP apathy (after which a bunch of staffers left). The SPAC, therefore, is like putting a toe back in the pool. Not to prove its ability to raise funds — I could probably raise a SPAC – but its ability to do quality deals. It hopes to find a quality company to invest in, and then use that as the cornerstone of a fresh investment track record (“it’s not about what we did, it’s about what’s we’ve done lately”).