Bill Ackman's Pershing Square Sells 10% Stake to Investors for $1.05 Billion

Pershing Square Capital Management announced on Monday that it has sold a 10% stake in itself to a consortium of investors for $1.05 billion. This move comes amid reports that the hedge fund's founder, Bill Ackman, is preparing to take the firm public as early as next year.

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The deal involves selling a 10% stake in a newly created entity, Pershing Square Holdco, which owns 100% of the hedge fund's shares. This agreement includes international family offices and other investors. The Wall Street Journal reported on May 31 that Pershing Square was nearing a deal to sell this stake, which is seen as a step toward an initial public offering (IPO) anticipated for next year.

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The consortium of investors includes Bermuda reinsurer Arch Capital Group, Brazilian bank BTG Pactual, London-based Consulta Limited, San Francisco's ICONIQ Investment Management, and Israeli insurer Menora Mivtachim. These entities will collectively own a 10% stake in Pershing Square.

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Ackman expressed enthusiasm about the new partnership, stating, "We are delighted to invite a group of world-class, long-term partners as investors in our business, which has been entirely owned by Pershing Square employees since our inception more than 20 years ago." He also noted that this investment would support the firm's growth in assets under management across existing and new strategies. Ackman emphasized that Pershing Square's primary focus would remain on generating high, long-term returns for its investors.

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Founded by Ackman in 2004 and based in New York City, Pershing Square currently manages approximately $16.3 billion in assets. The hedge fund has shown impressive performance, generating returns worth $12.3 billion over the three years ending in 2023.

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The recent agreement values Pershing Square at $10.5 billion. This valuation occurs amid speculation that Ackman aims to float the hedge fund on public markets, partly leveraging his increased social media presence and influence. Ackman has gained notoriety for his outspoken views on political issues, including his opposition to pro-Palestine protests on U.S. campuses following Hamas' attack on Israel on October 7, 2023, and his criticism of the diversity, equity, and inclusion movement on the social media platform X, formerly known as Twitter.

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