US Markets
Friday, May 31st, 2024 6:30 pm EDT
Key Points
- 10% Stake Sale and Future IPO Plans: Bill Ackman is selling a 10% stake in his investment firm, Pershing Square, raising $1.05 billion and valuing the firm at $10.5 billion. This move is part of a strategy to eventually take Pershing Square public, though no official steps for an IPO have been initiated yet.
- Leadership Changes and Firm Structure: Two years ago, Ackman appointed Ryan Israel as chief investment officer, marking a shift in day-to-day investment management while Ackman retains ultimate control as CEO. Pershing Square manages $18.6 billion in assets, primarily through Pershing Square Holdings, a closed-end fund traded on European stock exchanges.
- New Investment Vehicle and Portfolio Performance: Ackman plans to launch a new publicly traded closed-end fund on the New York Stock Exchange, targeting investments in 12 to 24 large-cap, investment-grade “durable growth” companies in North America. His hedge fund, which held a concentrated portfolio of six stocks including Alphabet, Chipotle, and Hilton, posted a 26.7% gain last year. In 2022, Ackman stopped his practice of activist short selling, known for his famous battle against Herbalife.
Billionaire investor Bill Ackman is selling a 10% stake in his investment firm, Pershing Square, as part of a strategic move to eventually take the firm public. This sale is part of a $1.05 billion funding round, which values the firm at $10.5 billion. The investors involved in this transaction are primarily institutional and family offices who prefer to remain anonymous. The Wall Street Journal first reported on these developments, though Pershing Square has not commented officially.
The funding round is seen as a preliminary step toward an initial public offering (IPO) in the U.S., although Ackman has not yet hired bankers or started the official IPO process. Two years ago, Ackman appointed Ryan Israel as the chief investment officer, marking the first time he has delegated day-to-day investment responsibilities. Despite this change, Ackman remains the CEO and retains ultimate decision-making authority. He has indicated that Israel would succeed him in running the firm if necessary.
As of the end of April, Pershing Square managed $18.6 billion in assets, with most of its capital in Pershing Square Holdings, a closed-end fund traded on European stock exchanges. Ackman is renowned for his market-topping returns and vocal activist campaigns, which have made him one of the world’s most prominent hedge-fund investors. He also has a significant social media presence with 1.2 million followers on the platform X, where he discusses various issues from antisemitism to presidential elections.
Earlier this year, Ackman announced plans to launch a new investment vehicle listed on the New York Stock Exchange. This new vehicle will be a publicly traded closed-end fund, focusing on investments in 12 to 24 large-cap, investment-grade, “durable growth” companies in North America. This initiative aims to leverage his popularity among Main Street investors.
As of the end of March, Ackman’s hedge fund maintained a concentrated portfolio of just six stocks, including major companies like Alphabet, Chipotle Mexican Grill, and Hilton Hotels. The fund achieved a 26.7% gain last year. Notably, in 2022, Ackman ceased his practice of activist short selling, a strategy that previously led to a high-profile battle against Herbalife.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/31/ackman-selling-stake-in-pershing-square-at-10point5-billion-valuation-aiming-for-ipo.html
