Activist investor Bill Ackman of Pershing Square Capital Management engaged the services of Deutsche Bank AG (NYSE:DB) and UBS AG (NYSE:UBS) to handle the initial public offering (IPO) of one of his hedge fund portfolios in London later this year, according to Reuters based on information from people familiar with the situation.
Last month, Ackman informed investors regarding his intention to raise permanent capital for his Pershing Square Holdings by listing it at the London Stock Exchange.
In his letter to investors, Ackman wrote, “Because we are an active, control and influence-oriented investor, we have avoided being fully invested because of the risk of investor redemptions. 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.”
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It had been reported that the activist investors initially aimed to raise capital between $1 billion to $3 billion and would list Pershing Square Holdings in London once he raised $4 billion.
Pershing Square Holdings gained 49.6% since inception
Pershing Square Holdings has nearly $3 billion in assets under management (AUM). During the first-half of this year, the fund generated 32.3% in gross returns. Since its inception, Pershing Square Holdings recorded gross returns of 49.6%.
According to people with knowledge about the fund’s IPO, Ackman could raise at least $1 billion in new capital given a strong interest among investors to acquire a stake of his firm.
Ackman’s activist campaigns
Ackman is well known in the industry as one of the most outspoken hedge fund managers. He generally attracts interest for his activist campaigns against companies through public presentations and media interviews.
Ackman is currently pushing Allergan, Inc. (NYSE:AGN) to sell itself to Valeant Pharmaceuticals Intl Inc (TSE:VRX) (NYSE:VRX).
In addition, Ackman has been pursuing regulators to shutdown Herbalife Ltd. (NYSE:HLF) based on his conviction that the company’s business model is a pyramid scheme. The activist investor vowed to deliver a “death blow” to Herbalife through his latest presentation, but it didn’t happen. Instead, the stock price of the company briefly climbed.