Bill Ackman’s Pershing Square is planning to come out of hibernation. The activist investor sent out a letter that told clients that the fund was raising money to acquire a significant stake in a large cap company.
The letter to investors said that the firm intends to raise money for a single stock fund which will acquire a +5 percent stake in a large sized U.S. company, reports Katherine Burton for Bloomberg News. The company remains unnamed and there is no indication as to what this secretive company’s business is. According to the letter, the said fund would close at $1 billion and will invest along with Pershing Square’s other funds. Ackman is raising money for the fund over the next 10 days. As is Ackman’s style, he plans to negotiate with the company’s management.
Ackman could have taken a tip from our concept of hedge fund ads when he wrote the letter to his investors.
Bill Ackman’s $2 Billion Bet on Target Corp Failed
Ackman seems unaffected by his last failure at a single stock fund which resulted in huge losses for his firm. His previous attempt at a single stock fund was in April 2007, the fund aimed at investing in Target Corporation (NYSE:TGT). The single stock fund failed abysmally when the company lost over 90 percent of its market value in 2009. The Target focused fund invested over $2 billion in the company in the form of stock and stock options. Ackman washed his hands of it in 2011 when Target refused to accept Ackman’s suggestions for the BoD.
Bill Ackman Known for Concentrated Bets
Ackman is known for making big, concentrated bets, whether he goes short or long on a company. He scored a win when The Procter & Gamble Company (NYSE:PG)’s CEO Robert McDonald was replaced by AG Lafley, Ackman had been pushing for this particular change for some time. Ackman is also doing better in J.C. Penney Company, Inc. (NYSE:JCP). However his $1 billion short bet on Herbalife Ltd. (NYSE:HLF) seems to be in a limbo.