BrokerDealer.com blog post courtesy of extract from FinAlternatives.com
Pershing Square Capital Management plans to move forward with a listed permanent capital vehicle later this year, the $15 billion hedge fund told investors.
The New York-based firm said it will raise an undisclosed amount in an initial public offering later this year. The money would serve to protect Pershing Square’s investments against redemptions.
“Because we are an active, control and influence-oriented investor, we have avoided being fully invested because of the risk of investor redemptions,” firm founder William Ackman wrote. “We will hopefully begin to address this issue with the initial public offering of Pershing Square Holdings Ltd., targeted for later this year, which will increase the amount of our capital that is permanent.”
Ackman said that Pershing Square itself would not go public.
Pershing Square has been mulling a permanent-capital IPO for about three years. Earlier this year, it said it would seek up to $3 billion in a London Stock Exchange listing of its offshore fund. In May 2013, he said he was only $500 million short of that figure.
If Pershing Square chooses to hold the IPO this year, it would take advantage of an exceptional run of performance. The firm’s flagship strategy is up 25% this year, in spite of big setbacks in one of its largest investments, a $1 billion short bet against nutritional supplements company Herbalife Inc.