SPACs may be tanking, but that hasn’t deterred hedge funds from piling into them.

Hedge funds boosted their holdings of Special Purpose Acquisition Companies, or SPACs, by 73 percent during the first quarter.

These investors owned $142.9 billion worth of SPACs at the end of March, compared with only $82.4 billion as of the end of December, according to an analysis of 13F filings by SPAC Research.

The top three SPAC investors are Glazer Capital, Millennium Management, and Magnetar Capital, according to the ranking put together by SPAC Research. 

So far this year, 324 SPACs have raised $103.6 billion, which is almost equal to the amount raised in the past three years combined, according to SPAC Insider. The glut caused blank check companies to begin floundering in mid-February, and now SPACs are in a bear market, as measured by the IPOX SPAC index. The index has fallen more than 30 percent from its February peak. 

According to SPAC Insider statistics, more than 100 of the new SPACs are now trading below their offering price, which is typically $10 per unit of shares and warrants. But for those trading above that price, investors who got in during the SPAC's initial public offering — mostly hedge funds — are likely still profiting.

With the exception of a few cases, most hedge funds don’t seem to be selling out either, the latest 13Fs indicate.

Citadel Makes SPAC Splash in Q1

Glazer Capital, the top SPAC owner during the quarter, more than doubled its SPAC stakes. It owned $5.5 billion in SPACs at the end of March, compared with $2.25 billion as of the end of the year. 

That’s a huge increase for Glazer, which had regulatory assets under management of only $4.5 billion at year-end. By the end of March, SPACs made up the bulk of its 13F filings of publicly traded equities, which by then totaled $6.95 billion.

Millennium Management, which had been last quarter’s leader, was a close second, owning $5.1 billion. That's up from $4.4 billion at the end of 2020. 

Magnetar Capital ranked third, with $4.2 billion, compared with $2.9 billion at year-end.

Citadel also jumped in head first, with $3.8 billion of SPACs at the end of March, compared with $1.4 billion at the end of 2020.

All of those heavy hitters except Glazer still owned Michael Klein’s Churchill Capital IV, whose agreement to buy Lucida Motors in early February caused it to surge, signaling the peak of the frenzy. At the end of March, Magnetar was the biggest owner of that SPAC, while Citadel was the third largest.

Despite the stock’s 70 percent decline from its February peak, Churchill IV still has the second highest return on investment of SPACs that have announced — but not completed — an acquisition, according to SPAC Insider. Churchill IV is up more than 100 percent since the IPO.

During the quarter, Glazer sold all of its shares of Churchill IV, which was its biggest SPAC holding at year-end. Glazer’s biggest SPAC position at the end of March was Austerlitz Acquisition, one of several SPACs sponsored by financial services veteran Bill Foley. The SPAC recently struck a merger deal with Wynn Interactive.

Dan Loeb Sells Out of the SPAC Kingpin

Although it was not among the top SPAC buyers, Dan Loeb’s Third point also increased its stakes in SPACs this year — to $733 million as of March 31, compared with $550 million at year-end.

However Loeb sold the three SPACs launched by SPAC kingpin Chamath Palihapitiya that it owned last year. These include Social Capital IV, Social Capital V, which has announced plans to merge with Social Finance (SoFi), and Social Capital VI. 

Social Capital IV is still owned by Millennium, Citadel, and Magnetar. It is trading slightly above its $10 offering price.