How this 80-year-old banking pioneer built a fortune on Fintech SPACs

Betsy Cohen, lawyer, financier and entrepreneur, has been breaking glass ceilings since Richard Nixon was president and she’s not slowing down.

In the summer of 1965, 25-year-old Betsy Cohen finished her internship at a prestigious law firm based in Philadelphia and began her final year at the University of Pennsylvania Law School. A top student who had excelled in the job, Cohen might have expected to be offered a full-time position. There was just one problem: it was a woman.

“They told me the senior partner at the firm was not ready to offer a woman a job,” Cohen recalled in a video chat with Forbes, from his office in New York. “I told him what I really thought, which was, ‘I think it’s your loss.'”

Their loss indeed. After working for a federal appellate judge and starting his own law firm, Cohen founded a bank in 1974, ran it for a quarter of a century, then sold it for more than $330 million. She then launched another bank, The Bancorp, which focused on providing white-label banking and payment services to non-banking companies like PayPal, which she ran until late 2014.

In recent years, Cohen has become a prolific dealmaker in the wild world of special purpose acquisition companies (SPACs). She was early in the reverse merger craze, securing her first deal in March 2016. Since then, Cohen and her partners, including her son Daniel, have raised more than $4.2 billion across 13 SPAC listings, with six mergers completed to date. According to data provider SPAC Research, only two other companies have completed more reverse mergers than Cohen and his partners.

“What I did was a series of opportunities, as opposed to a cookie-cutter career, because no one else was guiding me,” says Cohen, who is now 80, on his career. “Since I was about three years old, I was on my own – my parents would attest to that.”

Cohen’s independent thinking has earned him a fortune that Forbes estimates at $230 million, based on calculations and estimates of his previous exits, cash earnings and stakes in The Bancorp and recent SPAC listings. (Cohen declined to release any information about his net worth and investments, citing his desire for confidentiality).

Like just about everyone else, Cohen’s portfolio has been hit by this year’s market downturn, which torpedoed SPAC deals and sank fintech stocks. A SPAC merger with Israel-based trading app eToro, which was announced in early 2021, appears to be on ice amid reports of a reduced valuation for the firm and the company exploring new fundraising opportunities. (Cohen did not comment on the status of the deal). As for the five companies that Cohen has IPO’d that are still publicly traded, they’re down an average of 33% since the start of the year, as of the June 14 market close.

Not that Cohen is too worried. Now is a “good time” to invest, she says, as valuations are lower, creating more upside opportunities. In bear markets, “people’s views of the ultimate value of their business become more realistic,” she says.

“Betsy is truly the epitome of self-made success,” says Karen Lynch, CEO of CVS Health, who met Cohen when she was president of insurer Aetna from 2015 to 2021. (Cohen served as a board member of administration of Aetna from 1994 to May 2018). “And she defined grace under pressure [over her career].”

Born in 1941, Betsy Z. Cohen grew up in Philadelphia. Her father was a doctor who served as a military doctor in North Africa during World War II, while her mother cared for Betsy and her younger sister. She graduated from Bryn Mawr College in 1963, then enrolled in the University of Pennsylvania Law School, where she was one of six students in a class of about 200, and served as an editor of articles for the school’s law journal. “I was very prominent,” she says.

Cohen’s legal career was brief, but productive. She served as a clerk for the United States Court of Appeals for the Third Circuit, co-founded a commercial law firm and taught at Rutgers University Law School, making her the second female law professor on the Coast. East. (The first was Ruth Bader Ginsburg, decades before she became a Supreme Court justice.) But despite her aptitude for the legal profession, Cohen wanted to build businesses: “I realized that my potential was best realized by as a client, rather than as a lawyer. says Cohen of his career pivot. “And since my expertise was banking and all that intersected with law, my instinct was to create a banking institution.”

In 1974, Cohen did just that, founding the Jefferson Bank. Then 32, Cohen became the first female bank CEO in Pennsylvania and one of the first in the United States. Over the next 25 years, she oversaw the growth of the bank, while starting other businesses, including a transportation and rental company, and raising her three children.

“She didn’t just make room at the table, she taught us how to get to the table.”

Karen Lynch, CEO of CVS Health

“There was no work-life balance, she just had to do everything,” recalls Daniel Cohen, the eldest of her three children. (Cohen’s second son, Jonathan, works with her husband Edward, a lawyer, businessman, and economic historian who teaches at Penn, where the Cohens first met as law students; their youngest child, Abigail, died about 20 years ago.)

In 1999, Cohen sold Jefferson Bank, that it had become a $1.8 billion (asset) institution and Philadelphia’s largest community bank, to Hudson United Bancorp of New Jersey for $337 million. She and her husband, who was also a shareholder, brought in estimated after-tax proceeds of $50 million. Cohen, 57, stayed on for a few months to run the Jefferson unit, but she had already set her sights on the nascent fintech ecosystem and quickly landed on her next big thing: offering digital banking services to businesses. non-banks. .

“One of the reasons I sold [Jefferson Bank] it was that I saw that it wouldn’t be easy to explore what I saw coming,” says Cohen. “Turning a legacy business with branches wasn’t the business model I wanted to pursue in the future, because I didn’t think that was how people would access their financial information or their money ten years from now. .”

The result was The Bancorp, a commercial bank whose big breakthrough was providing private label banking services, including credit and debit card transaction processing, to non-banking businesses. As companies in the early 2000s launched websites and e-commerce capabilities, Cohen’s Bancorp – part bank, part technology provider – provided the financial plumbing for various businesses’ budding online presence. Early customers included Drexel University and Blue Cross Blue Shield, as well as some of the Internet’s great success stories, like PayPal. Bancorp’s assets grew to around $5 billion under Cohen’s leadership.

When Cohen stepped down as CEO and chairman of The Bancorp at the end of 2014, she decided to try retirement. It only lasted eight days. “I recognized, like everyone around me, that it wasn’t going to be okay,” Cohen recalled. “I saw the need to find something else.”

A few weeks later, in February 2015, she and her son Daniel listed their first SPAC, raising $100 million. A year later, that vehicle merged with credit card company CardConnect, which was later acquired by First Data for $779 million the following year. A second SPAC listing raised $175 million and merged with money transmitter Intermex (which was renamed International Money Express, Inc.). Feeling the momentum, in 2019 Cohen formalized his latest venture by establishing FinTech Masala, LLC, a family office investment boutique that Cohen runs. Over the past three years, FinTech Masala has completed other SPAC mergers with payments firms Paya Holdings and Payoneer Global, peer-to-peer used car marketplace Shift Technologies and financial advisory firm Perella Weinberg Partners. .

“She has invested time and effort to understand the SPAC ecosystem better than anyone,” said Andrew Bednar, president of Perella Weinberg Partners, who says Cohen introduced her company to many of the institutional investors who participated in the PIPE investment (private investment in public shares) and who remain invested in the company. In his dealing style, Cohen is “more relationship-oriented than deal-oriented,” adds Bednar.

When she’s not investing, Cohen stays busy shuttling between homes in Manhattan, Florida, and an island off the coast of Maine (“We’re Tracking the Weather”). She also sits on the boards of various institutions, including the Brookings Institute and the Metropolitan Opera, where she is also treasurer, donor (of at least $1 million), and frequent patron.

Beyond his obvious impact on capital flows, Cohen has also wielded a more subtle influence on Wall Street: shattering glass ceiling after glass ceiling over his half-century career, and framing and inspiring women who now excel at the highest levels of business and financial services.

“She was always a personal mentor to me, guiding me to make sure I was doing the right things,” said Lynch, CEO of CVS Health. “She is one of those women who empowers other women. She didn’t just make room at the table, she taught us how to sit at the table.

But octogenarian Cohen is not yet concerned about her legacy. She is focused on the next transaction. “I think,” she said Forbes“I would like to continue until I can’t anymore.”


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