Search Funds & SPACS - Are search funds the new SPACs & investor sentiment on each?

November 25, 2025

by a searcher from University of Pennsylvania - The Wharton School in Ambler, PA 19002, USA

Hi all, I recently saw a post that said "Search Funds are the new SPACs!" Search Fund investors, do you feel this way? Have you invested in SPACs in the past? There certainly are differences, but also similarities. Some fellow investors I have spoken with have said "SPACs are the highest level of search." Do you agree and with the realignment of incentives through regulatory changes in 2024, do you think the SPAC sector is something Search investors should participate in the upcoming 2026 year? What are your thoughts?

Reply by an intermediary
from The University of Chicago in Chicago, IL, USA

1) I thought SPAC is a publicly listed company NEWLY CREATED to raise capital to acquire private companies. So, not clear on relevance of stats on existing public companies. 2) Per my research, there are 6.8 million businesses with at least one employee. The higher number (I have read 18 to 25 million) includes businesses with no employee. Of the 6.8 million businesses, the breakdown is as follows: 5.8 million businesses w/ sales <$1 M 0.8 million businesses w/sales $1 - $10 M Regarding the post, I do see similarities between Search Funds and SPAC. Both raise capital to acquire, or to help acquire, private companies. The size and scale are different. Also, SPAC is public, and hence regulated, Search Fund is not. Also, if I am right, most SPACs buy one main company and buy more but stay focused on one industry, whereas Search Funds act more like a Holding Company with multiple investments.

Reply by a searcher
from Texas Christian University in New York, NY, USA

Interesting take - where are you seeing this? lots of obvious structural differences but would love to see what people are saying

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