(Bloomberg) -- Veteran dealmaker Michael Klein has returned to the blank-check arena for the first time in nearly three years, after the once red-hot investing trend went bust and cost sponsors and investors billions.

Churchill Capital Corp. IX raised $250 million on Thursday for the ninth special purpose acquisition company associated with Klein. It’s the first offering he’s backed since he teamed up with OpenAI Inc. Chief Executive Officer Sam Altman in July 2021 for AltC Acquisition Corp., which agreed last year to take a developer of advanced nuclear systems public. The return continues a recent streak of so-called serial sponsors raising nine-figure blank check companies.

The $250 million vehicle is the smallest blank check sponsored by Klein, SPAC Research data show, and the SPAC did not disclose an industry or area that it will focus on. During the go-go days of 2020 and 2021, sponsors like Klein raised more than $245 billion across more than 850 SPACs as the craze attracted celebrities, athletes and former politicians.

The offering from Klein is the largest since Agriculture & Natural Solutions Acquisition Corp., a SPAC backed by Impact Ag Partners LLC and Riverstone Investment Group LLC, raised $345 million in a November offering. The filings are part of a handful to price after the value of US SPAC IPOs plunged roughly 98% to $3.8 billion last year from a record $162.5 billion in 2021, data from SPAC Research show.

Modest Revival

The SPAC market has seen a modest revival in the past three months with six sponsors raising $888 million in total. Over the past year, blank checks backed by Nabors Industries Ltd., Mistral Capital Management LLC, and serial SPAC sponsor Eric Rosenfeld have raised millions with eyes on striking deals to take private firms public.

A recovering market for traditional initial public offerings paired with broader strength for equities is encouraging other serial sponsors to think about new offerings. Discussions about when to launch a new SPAC “have accelerated,” said Daniel Cohen, co-founder of Cohen Circle. For experienced managers like Cohen’s firm, which has backed more than 10 SPACs, “there’s space for serious sponsors who know what they’re doing,” he said. 

Read More: The End of Zero Rates Ushered in a New Era of Investment Error

As the market recovers from an oversupply of sponsors who lowered the bar to complete deals, people in the industry say a return of experienced players will help its evolution.

“It is always an encouraging sign when we get more household names coming to market — whether it’s on the sponsor or banking side,” said Mark Schwartz, Ernst & Young’s Americas IPO and SPAC advisory leader.

During the boom in 2020 and 2021, bulge-bracket banks lined up to raise billions for blank checks before holding so-called “SPAC-offs” when they’d bring in sponsors to essentially bid on the targets. In 2021 alone, Klein’s former employer Citigroup Inc. worked on more than 100 SPACs that raised some $22 billion — that equates to almost one SPAC every other business day, data from SPAC Research show.

Citigroup was the sole bookrunner on Klein’s latest Churchill SPAC, marking their fourth SPAC since 2022, the data show, after underwriting the Agriculture & Natural Solutions and Nabors SPACs and helping private equity firm Ares Management raise $500 million.

Industry critics have called out the ability for startups to tout lofty goals about the years ahead without much of a risk of legal fallout — something US regulators have since pushed back on — while others highlighted the opaqueness of deals that left many retail investors holding mostly empty bags.

Read More: SEC’s SPAC Rules to Limit Rosy Projections That Fueled Mania

One-time SPAC darlings have spiraled, with more than a third of the roughly 400 de-SPACs to debut in the past three years trading below $2 per share, data compiled by Bloomberg show. Based on current spending rates, 181 de-SPACs don’t have enough cash on their balance sheet to make it through the next year, the data show.

Critics have also pointed out the fact that dozens of de-SPACs have gone bankrupt after weak balance sheets weren’t addressed in deals and others were taken out at fire-sale prices. 

To be fair, not every SPAC deal has been a flop. Over the past three years, a few dozen ex-SPACs trade above $10, the level where they typically go public.

©2024 Bloomberg L.P.