Lutnick makes Spacs great again
Plus, Jane Street’s $20bn year and pension funds partner with private equity
Cantor goes all in on crypto, Spacs and Trump
Howard Lutnick, the longtime chief of Cantor Fitzgerald, left the brokerage in February to become US commerce secretary, becoming the executor of President Donald Trump’s trade wars.
But though Lutnick stepped down from Cantor and divested his corporate holdings, the New York-based brokerage stands to be a major beneficiary of the president’s policies. Others in the Lutnick clan are getting in on the action.
Brandon Lutnick, the 27-year-old son of Howard, was named chief executive of a special purpose acquisition vehicle Cantor raised last year that has for months been hunting for a deal.
The FT scooped on Tuesday evening that the younger Lutnick finally inked one: a massive crypto deal that the company says will be a beneficiary of Trump’s policies.
The Cantor Spac is partnering with tech conglomerate SoftBank, the controversial stablecoin Tether and crypto exchange Bitfinex to create a $3.6bn “bitcoin acquisition vehicle”.
The three investors will plough billions of bitcoin into the Spac, which will be renamed Twenty One Capital, and plans to go on a crypto buying spree.
It’s trying to recreate MicroStrategy, the one-time software company that became a $90bn giant after pivoting to crypto buying, using financial engineering. (Behold the structure of the Spac deal.)
Spacs — blank cheque companies that raise money then merge with a target business — had their heyday in 2021 before many plunged in value. But Cantor is spearheading a comeback of the chequered financial vehicle.
The MicroStrategy copycat is just the first in a series of Cantor Spacs. It has raised two other Spacs that are currently searching for deals with Brandon Lutnick as its chief executive. Cantor has also underwritten a clutch of Spac deals recently.
But it hasn’t always been smooth sailing for Cantor. In December, it settled charges with the Securities and Exchange Commission, relating to Spacs, without admitting any guilt.
The SEC, then led by Gary Gensler, was brutally tough on the crypto market. But Gensler’s replacement, Paul Atkins, is a crypto advocate who was sworn in on Monday.
And as Twenty One Capital noted in a presentation, “Trump’s new administration is viewed as strongly pro-crypto”.
So it makes sense that Cantor wants in on the action. The elder Lutnick is a longtime crypto cheerleader who has worked with Tether for years.
The brokerage has already benefited from the shift in tone. It advised Tether’s $775mn investment in rightwing video-sharing company Rumble earlier this year after taking the company public in 2022 via another Cantor Spac.
Most of Wall Street feels somewhat shut out from the Trump administration, but Cantor is ascendant and its DNA reaches the top ranks of the White House.