Pershing Square's Ackman said to consider IPO for hedge fund

Pershing Square's Ackman said to consider IPO for hedge fund
Known for investing in companies to press for changes, Bill Ackman is considering selling shares in a hedge fund to secure more permanent capital for investments.
JUN 17, 2011
Bill Ackman, known for investing in companies to press for changes, is considering selling shares in a hedge fund to secure more permanent capital for investments, according to a person familiar with the matter. An initial public offering of a fund overseas is among the options Ackman, founder of New York-based Pershing Square Capital Management LP, has considered since the start of the year, said the person who asked not to be named because the information is confidential. There are no plans to sell shares in the firm, the person said. “If we could increase the amount of our capital that is permanent, it would enable us to be more opportunistic during times of market and investor distress, and would also enable us to take larger stakes in a greater number of holdings,” Ackman said in a May 25 client letter. Brevan Howard Asset Management LLP in London and Third Point LLC in New York are among the hedge funds that sold shares in individual funds to the public. Such listings mean hedge funds don't have to worry about investors pulling cash through redemptions. Brevan Howard, run by Alan Howard, raised about $1 billion in March 2007 with an IPO in BH Macro Ltd., the first listing of a hedge fund on the London Stock Exchange. Third Point, run by Daniel Loeb, four months later raised $525 million, or about 24 percent less than its target, in a share sale for one of its funds on the London bourse. AR Magazine reported Ackman's plans yesterday. Bethany Norvell, a spokeswoman for Pershing Square, declined to comment.

Activist Investor

Ackman, 45, invests in companies he deems undervalued and then urges changes he says will boost shareholder returns. In the past year, he has bought stakes in Fortune Brands Inc., the maker of Jim Beam bourbon and Titleist golf balls, and J.C. Penney Co., the third-largest department store chain in the U.S. Money from employees and other affiliates account for about 8 percent of Pershing Square's assets, according to the investor letter. The hedge fund manages about $10 billion. “Over the long term, we believe that we can increase the probability of our success by increasing the proportion of our capital that is permanent,” Ackman said in the letter.

Latest News

WallStreetBets takes on the SEC — and makes a surprisingly sharp case
WallStreetBets takes on the SEC — and makes a surprisingly sharp case

The Reddit trading community's formal comment letter against the proposal is drawing widespread attention across finance and tech circles.

Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale
Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale

RIA aggregator adds $4.8 billion in client assets across seven states as demand grows for alternatives to traditional succession models.

Beyond wealth management: Why the future of advice is becoming more human
Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up
Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up

Shareholder targets FS KKR Capital's directors over alleged portfolio valuation and dividend missteps.

UBS loses $1.2 million arbitration claim linked to variable annuities and margin
UBS loses $1.2 million arbitration claim linked to variable annuities and margin

UBS has a history of costly litigation stemming from the sale of volatile investment products.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline