How this 80-year-old female bank pioneer built a fortune on Fintech SPACs
Betsy Cohen, a lawyer, financier and entrepreneur, has broken glass roofs since Richard Nixon was president – and she’s not slowing down.
IIn the summer of 1965, 25-year-old Betsy Cohen completed her internship at a prestigious Philadelphia-based law firm and entered her final year at the University of Pennsylvania Law School. A top student who had excelled in the job, Cohen could have expected to be offered a full-time position. There was only one problem: She was a woman.
“They told me the senior partner in the firm was not ready to offer a woman a job,” Cohen recalls in a video chat with Forbes, from her New York City office. “I told him what I really thought, which was, ‘I think it’s your loss.'”
Their loss indeed. After working for a federal appeals judge and starting his own law firm, Cohen founded a bank in 1974, running it for a quarter of a century and selling it for over $ 330 million. She then started another bank, The Bancorp, focusing on offering white-label banking and payment services to non-banking companies such as PayPal, which she operated until the end of 2014.
In recent years, Cohen has emerged as a prolific dealmaker in the wild world of Special Purpose Acquisition Companies (SPACs). She was out early with the reverse merger mania, ending her first deal in March 2016. Since then, Cohen and partners, including his son Daniel, have raised over $ 4.2 billion on 13 SPAC listings, with six mergers completed to today’s date. Only two other companies have completed more reverse mergers than Cohen and her partners, according to data provider SPAC Research.
“What I have done is a series of opportunities, as opposed to a cake career, because no one else guided me,” reflects Cohen, now 80, about her career. “From the time I was around three years old, I was my own person – my parents wanted to confirm that.”
A photo of Bryn Mawr College, located outside Philadelphia, where Betsy Cohen graduated in 1963. She donated $ 5 million to the school in 2019 and sits on the board.
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Cohen’s independent thinking has given her a fortune that Forbes estimates at $ 230 million, based on calculations and estimates of her past exits, cash income and holdings in The Bancorp and recent SPAC listings. (Cohen declined to disclose information about her net worth and investments, citing her desire for privacy).
Like almost everyone else, Cohen’s portfolio has been hit by this year’s market downturn, which has torpedoed SPAC agreements and lowered fintech shares. A SPAC merger with the Israel-based trading app eToro, which was announced in early 2021, appears to be on ice amid reports of a cut in valuation and the company exploring new fundraising opportunities. (Cohen did not comment on the status of the deal). As for the five companies from which Cohen took the listing and which are still listed, they have fallen by an average of 33% since the beginning of the year, as of the June 14 market closure.
Not that Cohen is that worried. Now is a “great time” to invest, she says, because the valuation is lower, which creates more opportunities for upside. In bear markets, “people’s views on the ultimate value of their companies are becoming more realistic,” she says.
“Betsy is truly a symbol of self-success,” said Karen Lynch, CEO of CVS Health, who met Cohen while serving as president of the insurance company Aetna from 2015 to 2021. (Cohen served as a board member of Aetna from 1994 to May 2018) . “And she has defined grace under pressure [over her career]. “
Betsy Z. Cohen was born in 1941 and grew up in Philadelphia. Her father was a doctor who served as an army doctor in North Africa during World War II, while her mother looked after Betsy and her younger sister. She graduated from Bryn Mawr College in 1963, and then enrolled at the University of Pennsylvania Law School, where she was one of six female students in a class of about 200, and served as an article editor for the school’s law school. “I was very prominent,” she says.
Cohen’s legal career was short but productive. She was a clerk for the Third Court of America, founded a commercial law firm, and taught at Rutgers University Law School, making her the only female law professor on the East Coast. (The first was Ruth Bader Ginsburg, decades before she became a Supreme Court justice.) But despite her suitability for the legal profession, Cohen wanted to build companies: “I realized that my potential was best realized as a client, rather than a lawyer,” Cohen says of her career turning point. “And since my expertise was banking and all things that cut into the law, my instinct was to start a banking institution.”
In 1974, Cohen did just that, founding Jefferson Bank. At age 32, Cohen became the first female bank manager in Pennsylvania, and one of the first in the United States. For the next 25 years, she monitored the bank’s growth, while starting up other companies, including a shipping and leasing company, and raising her three children.
“She not only made room at the table, she taught us how to get to the table.”
“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 Cohen first met as law students; their youngest child, Abigail, died about 20 years ago.)
In 1999, Cohen sold Jefferson Bank, which she had grown into a $ 1.8 billion institution (assets) and Philadelphia’s largest locally owned community bank, to Hudson United Bancorp in New Jersey for $ 337 million. She and her husband, who was also a shareholder, received an estimated $ 50 million in dividends after tax. The 57-year-old Cohen took a few months to run the Jefferson unit, but she had already turned her attention to the nascent financial technology ecosystem, and soon landed on her next big thing: providing digital banking services to non-banking firms.
“One of the reasons I sold [Jefferson Bank] is that I saw that it would not be easy to explore what I saw coming, Cohen explains. “Transforming an older branch business was not the business model I wanted to pursue in the future, because I did not think it was the way people would access financial information or money for ten years.”
The result was The Bancorp, a commercial bank whose major breakthrough was providing private-label banking services, including a system for processing credit and debit card transactions, to non-banking companies. As companies in the early years launched websites and e-commerce opportunities, Cohen’s Bancorp – partly a bank and partly a technology supplier – provided the financial plumbing work for various companies’ incipient online presence. Early customers included Drexel University and Blue Cross Blue Shield, as well as some of the Internet’s great success stories, such as PayPal. Bancorp’s assets grew to around $ 5 billion under Cohen’s management.
When Cohen resigned 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 this was not going to go well,” Cohen recalls. “I saw the need to find out something else.”
A few weeks later, in February 2015, she and her son Daniel listed their first SPAC, raising $ 100 million. A year later, the vehicle merged with the credit card company CardConnect, which was then acquired by First Data for $ 779 million the following year. Another SPAC listing raised $ 175 million and merged with the money transmitter Intermex (which was renamed International Money Express, Inc.). In 2019, Cohen secured its latest venture by creating FinTech Masala, LLC, an investment store for family offices run by Cohen. Over the past three years, FinTech Masala has completed further SPAC mergers with the payment companies Paya Holdings and Payoneer Global, the peer-to-peer used car market Shift Technologies and financial advisory firm Perella Weinberg Partners.
“She has invested time and effort in understanding the SPAC ecosystem better than almost anyone else,” said Andrew Bednar, president of Perella Weinberg Partners, who said Cohen introduced his company to many of the institutional investors involved in the company’s PIPE investment ( private investment). in public equity), and which is still invested in the company. In his contract style, Cohen is “more relationship-focused than transaction-focused,” Bednar adds.
When not investing, Cohen continues to move between homes in Manhattan, Florida and an island off Maine (“We Follow 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 (at least $ 1 million) and a frequent patron.
Beyond her obvious impact on capital flows, Cohen has also had a more subtle influence on Wall Street: by breaking one glass ceiling after another over the course of her half-century career, and by guiding and inspiring women who now excel at the highest the levels of business and financial services.
“She was always a personal mentor to me, guiding me to make sure I did the right things,” said Lynch, CEO of CVS Health. “She is one of those women who empowers other women. She not only made room at the table, she taught us how to get to the table.”
But the eight-year-old Cohen is not interested in her legacy yet. She is focused on the next appointment. “I think so,” she says Forbes“I want to keep going until I can not.”
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