(Bloomberg) — When former President Donald Trump said in December that his nascent media company was raising $1 billion from a diverse group of institutional investors, the announcement was highly unusual in that it omitted the participants’ names.
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A month later, no firm has announced it made the investment, but people familiar with the fundraising say it came from hedge funds, Canadian money managers and family offices that manage fortunes for ultra-wealthy clans.
Some of these investors include Chicago-based Pentwater Capital Management and MMCAP, a fund advised by MM Asset Management and overseen by Toronto-based Spartan Fund Management, according to people with knowledge of the matter.
They were among 36 investors that committed to the so-called private investment in public equity, or PIPE, that Digital World Acquisition Corp., a special purpose acquisition company, raised as part of its merger with Trump Media & Technology Group.
Representatives for TMTG, Digital World, the SPAC’s underwriter, EF Hutton, as well as Pentwater, Spartan and MMCAP didn’t reply to requests for comment.
Wall Street has largely sought to distance itself from Trump after he incited an insurrection in the U.S. Capitol and was banished from social media platforms.
Those approached to invest in the PIPE who declined to participate, include Millennium Management, Balyasny Asset Management, Apollo Global Management Inc. and JPMorgan Chase & Co.’s Highbridge Capital Management, the New York Times reported earlier Thursday.
When Digital World, led by Chief Executive Officer Patrick Orlando, revealed in October it was investing in Trump Media, several hedge funds that backed the SPAC, such as Lighthouse Investment Partners, Saba Capital Management and D.E. Shaw, sold their shares, even as the stock was soaring on the news.
“Many investors are grappling with hard questions about how to incorporate their values into their work,” Saba’s Boaz Weinstein said at the time. “For us, this was not a close call.”
Read more: Saba Capital Dumps Unrestricted SPAC Stock on Trump News
A PIPE is an important part of a SPAC transaction and relies on institutional investors who can help it go through if early backers redeem their shares. The firms involved typically want to disclose the names of the investors because it gives the deal more credibility.
That didn’t happen with the Trump PIPE, though the terms are likely to be lucrative, with minimal risk.
While Digital World shares traded for $84.06 at noon Thursday in New York, the initial conversion price for the PIPE investors is $33.60, meaning those participating are poised to more than double their money if the merger is completed and the stock continues trading at that level.
The deal isn’t without controversy. The Securities and Exchange Commission has sought records tied to meetings involving Digital World’s board, procedures related to trading and the identities of certain investors.
Read more: SPAC Merging With Trump Media Gets SEC Information Request
If the transaction goes ahead, the PIPE will provide Trump’s media company with significant funds to build out operations. It has already added former U.S. Representative Devin Nunes, a fervent Trump supporter, as CEO and plans to start a rival platform called Truth Social.
“As our balance sheet expands, TMTG will be in a stronger position to fight back against the tyranny of Big Tech,” Trump said in a statement last month.
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