Private equity-backed special purpose acquisition companies could be the early beneficiaries from a market-wide rethink of the listing-by-purchase deal structure. In a market awash with SPACs, buyers who can offer deep sector expertise can differentiate themselves from general asset managers whose rush to deploy funds could result in high purchase prices.

“We’ve seen it on both sides,” Motive Partners vice president Miguel Tejeda said while speaking at Mergers & Acquisition’s Private Equity SPEAK virtual event earlier this month. “Motive has its own SPAC, and we’ve also seen potential exit opportunities for our portfolio companies via SPACs.”

The fintech-focused private equity firm is reportedly seeking to raise up to $1.5 billion, more than triple its inaugural $473 million haul in 2019.

SPAC issuance fell precipitously following the Securities Exchange Commission’s announcement of plans to provide new guidance on the vehicles in April. But the capital waiting to be spent on deals is estimated at $700 to $800 billion, according to EY, and private equity-backed SPACs account for nearly 10 percent of such vehicles.

“The struggle in the [private investment in public equity] market has actually been slightly helpful because you’ll see the SPACs that bought assets for strictly high prices, but don’t necessarily have the relevant experience in that industry to provide value to that asset. Or maybe isn’t trusted by the market to have identified the right one, has struggled in the public markets,” Tejeda said. “So, we actually think if there’s a strong case for validation by the sponsor and there’s a strong case that the sponsor actually knows the industry very well, it’s actually improved PIPE execution and stock market performance.”

The differentiated pitch could prove an advantage for the PE-backed SPACs, which count TPG and others among their ranks.

But the combined PE-SPAC structure is not without its costs. Motive invests in the PIPE through its fund, potentially limiting the valuations it can pay for certain assets due to the fund’s return thresholds. In a market chasing frothy, and potentially too-rich valuations however, this restraint can be a benefit.

“In a way, the reckoning of the SPAC market has actually been helpful to Motive’s pitch in the assets that we’re going for,” Tejeda said.

Investors may well feel the same way as SPAC stock performance records mature.