(Bloomberg) — Investors caught up in this frenzy of the stock market’s rampant rally this season have a new favourite place for their cash: pools of cash that search for acquisitions. Some will pocket enormous gains and others will probably be saddled with profound losses from these types of so-called blank check companies, but one set — Wall Street’s leading banks — will be coming from a winner.Three of these — Citigroup Inc., Credit Suisse Group AG, along with Goldman Sachs Group Inc. — currently account for almost half underwriting earnings, meaning that they stand to create, according to Dealogic, at least $400 million in charges from blank check businesses that have recorded this season. That’s a record number of cash out of a marketplace that at once hardly generated anything for its most significant firms.It’s a frenzy that’s climbing as every month goes : the next quarter saw two dozen SPACs, as the specific purpose acquisition companies are understood, come to advertise and increase $8 billion, twice the previous record set from the first quarter, according to Dealogic. Last week Bill Ackman increased $4 billion to get his vehicle and Billy Beane, the baseball featured in “Moneyball,” has registered for a $500 million vehicle.The ever-bigger prices, in addition to increased interest from conventional banking customers like private equity and hedge fund companies, has drawn Wall Street’s interest. The large sums of cash to be made organizing the trades haven’t hurt, either.“They tend to be very fee-intensive deals,” stated Michael Heinz, a partner at law firm Sidley Austin who advises patrons and investment banks on SPACs. “Between the front-end and back-end, it is very lucrative for banks.”It’s a noteworthy transformation for SPACs, that have been an obscure area of the marketplace tainted by association with cent -stock scandals. A decade back, with the exclusion of Citigroup and Deutsche Bank AG, underwriters were smaller investment banks. Five decades back, Goldman Sachs was absent in the league tables — now it’s one of the largest players.The goods’ popularity was pushed by yield-hungry investors, who watch SPACs as secure bets that could provide better yields than Treasuries. The money earns interest before a deal is struck. If a supervisor can’t find a bargain in a specific time or investors don’t enjoy the planned merger, they can receive their cash back. If a merger is successful, then investors may share in these gains.Banks normally take a 2% reduction of cash raised from selling stocks in a public record. After a SPAC completes a merger, the companies are subsequently given 3.5% of public offering earnings. And they are able to earn more fees for every single support provided along the way, such as by increasing more funds to get a merger or even helping find a business to purchase.Bigger MarketSPACs accounts for almost 40% of the IPO market up this year from just 1.1% per decade ago, according to Dealogic data.Interest stays high with the latest surge. Investors are paying premiums for stocks well until they understand about prices, and startups without a earnings or merchandise are visiting their share prices . Over 70% of those 96 SPACs trying to find a bargain are trading at a premium, an unprecedented amount, based on data in SPAC Analytics.A signal of this euphoria: Apollo Global Management-backed Spartan Energy Acquisition Corp. saw its shares soar 54% in expectation of a bargain with Fisker Inc., a battery-powered automobile venture which does not have any merchandise from the market.That form of functionality clarifies worries that the marketplace has come to be overly risky, and that there won’t be sufficient deals to make sure broad success. For the time being, however, bank executives are confident as time goes by.“There are great private companies that are under stress because of Covid that markets believe will be long-term winners,” stated Tyler Dickson, international co-head of banks, capital markets and advisory at Citigroup. “That’s a match made perfect for a SPAC when factoring in volatility in the IPO market and the current slowdown in M&A.”For more content like this, please see us in bloomberg.comSubscribe today to stay ahead with the most dependable company news resource.©2020 Bloomberg L.P.