Billionaire Bill Foley Is SPAC Market’s Overlooked Star | Sidnaz Blog


Bill Foley,

owner of the Vegas Golden Knights team in the National Hockey League, has bypassed unproven electric-car makers and speculative space companies and instead focused on solid, sustainable businesses.

“Bill Foley is going to make money,” said

Evan Ratner,

a SPAC portfolio manager at Easterly Alternatives. “He’s buying a business where he’s going to own it for a long time.”

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Despite the speculative frenzy all around him, Mr. Foley, 76 years old, is sticking to his old strategy of buying businesses that are undervalued based on their financials. His record building

Fidelity National Financial Inc.

FNF 1.52%

into a title-insurance behemoth is allowing him to raise cash and do some of the biggest SPAC mergers ever.

“I’ve been a value investor my whole life,” said Mr. Foley, a graduate of the U.S. Military Academy at West Point whose companies share names with historic battles such as Trasimene, Trebia and Austerlitz. “I’m a big fan of boring companies.”

SPACs, also called blank-check companies, are shell companies that list on a stock exchange to merge with a private firm and take it public. The private company then gets the SPAC’s place in the stock market. SPACs have become a popular alternative to traditional initial public offerings for companies such as the sports-betting firm

DraftKings Inc.,

and a trendy endeavor for wealthy individuals and celebrities who expect to earn several times their investments.

Few SPAC creators have raised as much money as Mr. Foley, who was chief executive officer of Fidelity National from 1984 to 2007 and is now nonexecutive chairman of its board. He and former

Citigroup Inc.


Michael Klein

are the only SPAC executives to raise at least $1 billion three separate times, according to the data provider SPAC Research.

One of Mr. Foley’s SPACs recently took Paysafe Group Holdings Ltd. public in a $9 billion deal; another earlier this year reached a $7.3 billion merger with the employee-benefits provider Alight Solutions. Both deals are among the largest 15 ever. Three other Foley SPACs are in the market still seeking mergers. One area of interest: units of public companies that could be spun off and taken public separately through a SPAC merger. Some of those might have been neglected during the Covid-19 pandemic as businesses focused on their core areas.

Paysafe posted $1.1 billion in revenue in the first nine months of 2020, and Alight says it has contracts with about half of the Fortune 500 companies. Both deals are reminiscent of how SPAC deals were done before the current boom, when existing profits were more of a priority. Mr. Foley raised money for his first SPAC in 2016.

A Las Vegas resident, Mr. Foley owns other businesses including the Golden Knights, the Whitefish Mountain ski resort in Montana and

Foley Family Wines,

which operates several wineries in California’s Napa and Sonoma counties. He headlines a group of experienced executives who do fund-raising through SPACs, including the finance entrepreneur

Betsy Cohen

and the private-equity billionaire

Alec Gores.

Mr. Foley’s recent flurry of SPAC activity started last spring, when the coronavirus temporarily shut down the National Hockey League and presented another obstacle to Mr. Foley’s goal of winning the Stanley Cup. The Golden Knights lost in the 2018 finals in their first season, and they were leading their division at the time of the shutdown last year. They have one of the NHL’s best records again this year.

At the time of the pause, the former Air Force captain recognized that SPACs could be a lucrative investment during volatile markets caused by the pandemic. Blank-check mergers offer more flexibility than normal IPOs by letting private companies make projections about their businesses and negotiate valuations behind closed doors. In a normal IPO, pricing can change until the night before a company makes its debut.

Mr. Foley sees himself as an effective executive and investor. When he was CEO of CKE Restaurants—parent company of Carl’s Jr. and Hardee’s—he described himself as a dictator, underscoring his relentlessness, which his backers prize.

“That’s the secret sauce,” said

Chinh Chu,

a SPAC creator and former co-head of private equity at

Blackstone Group Inc.

who worked with Mr. Foley on his first SPAC. “He’s a rare combination of the two.”

Businesses connected to Mr. Foley, including Fidelity National and the investment firm Cannae Holdings, often invest in his SPAC deals. That lets him acquire bigger companies but creates risks of conflicts of interest that can arise in SPAC mergers.

Few SPAC creators have raised as much money as Bill Foley, who says, ‘I’m a big fan of boring companies.’

Typically, SPAC creators are allowed to purchase 20% of the company at a deep discount. Messrs. Foley and Chu initially paid about $16 million for shares and other investments tied to the 2016 SPAC, according to New York University School of Law professor Michael Ohlrogge. The company then teamed up with Mr. Chu’s former company, Blackstone, to take the insurer Fidelity & Guaranty Life public in a $1.84 billion deal in 2017.

As part of the deal, Blackstone gave Messrs. Foley and Chu millions of dollars in fees. In 2020, Mr. Foley’s Fidelity National Financial paid a premium to acquire Fidelity & Guaranty Life. At the time of that acquisition, the initial SPAC positions held by Messrs. Foley and Chu would have been worth about $315 million, generating Mr. Foley alone a paper profit of roughly $150 million, Mr. Ohlrogge estimates.

A Miami pension fund is suing Mr. Foley and other Fidelity National executives following the FGL deal, alleging that they neglected ordinary shareholders. Mr. Foley said the lawsuit has no merit. He, Mr. Chu and a Blackstone spokesman said that the deal was approved by regulators, that any conflicts were publicly disclosed and that they are proud of FGL’s financial and stock performance.

Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ

Mr. Ohlrogge estimates that Mr. Foley made a paper profit of about $400 million in the Paysafe deal. Mr. Foley said he doesn’t know the exact paper gains from his SPAC deals but said they are consistent with other blank-check merger payouts and depend on investors’ liking his deals.

Mr. Foley has stayed away from speculative investments since his experience trading stocks in college. He turned about $4,000 into $40,000—then lost it all.

“If you’re going to be an intelligent investor, you’d better be an intelligent investor all the time—not just once in a while,” he said.

Write to Amrith Ramkumar at [email protected]

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