Bill Ackman is preparing to take his hedge-fund firm, Pershing Square, public by next year.
What Happened: Ackman is selling a stake in Pershing Square to investors in a funding round, valuing the firm at approximately $10.5 billion. The deal is expected to close soon. As of April, Pershing Square managed about $16.3 billion in net assets, reported The Wall Street Journal on Friday, citing people familiar with the matter.
The firm plans to attract billions more in assets, primarily holding a concentrated portfolio of undervalued large company stocks, including Chipotle Mexican Grill CMG and Universal Music Group.
Public listings of hedge funds are rare, especially after the 2008-09 financial crisis. Ackman aims to take Pershing Square public by late 2025 or early 2026. The firm has been transforming into an asset manager with durable capital, moving away from its activist roots.
Ackman's social media presence has boosted his profile, and he plans to leverage this to drive investor interest. Half of the $1 billion raised in the pre-IPO round will be invested in Pershing Square USA, expected to launch soon.
Ackman, Pershing Square's largest shareholder, could see his net worth increase significantly with a successful IPO, aiding in talent retention and succession planning.
Pershing Square did not immediately respond to Benzinga's request for comment.
Why It Matters: The planned IPO comes after a series of strategic moves by Ackman. In May, Pershing Square exited its position in Lowe’s and trimmed its stake in Chipotle Mexican Grill. This portfolio adjustment reflects Ackman’s strategy to focus on high-potential investments.
Earlier in February, Ackman shared insights on his investment philosophy, emphasizing the importance of identifying companies with strong growth potential. His approach has been instrumental in Pershing Square’s performance.
Additionally, a report in April highlighted the dominance of a few hedge funds in the U.S. Treasury market, underscoring the influence firms like Pershing Square wield in financial markets.
Furthermore, Ackman’s public stance on political issues, such as his criticism of President Biden’s arms-freeze warning to Israel amid the Hamas war in May, has kept him in the public eye.
Image Via Wikimedia Commons
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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