Bill Ackman Prepares For $2B IPO In Amsterdam

Bill Ackman’s firm wants to raise $5 billion or more from institutional investors that are not in the U.S. Pershing Square is preparing for a listing on the Amsterdam Stock Exchange. Several reports state that the firm has already raised $1.5 billion from 30 key investors and wants to rise $2 billion more for the new fund, which will be called Pershing Square Holdings. Earlier, ValueWalk reported plans for the IPO based on Ackman’s Q2 letter to investor.

Pershing IPO set for next month

The firm expects trading on its Euronext-based shares to start Oct. 13. Ackman called the initial public offering “a transformational event,” both for their investors and also for Pershing Square. He expects that the public listing will make the firm’s capital base more stable while enabling them to invest a larger percentage of the firm’s assets into activist endeavors in the long term.

Ackman is very well-known for his activist stakes. He bet $1 billion that Herbalife Ltd. (NYSE:HLF) shares would fall after raising pyramid scheme accusations against the nutritional supplements company. More recently, he joined forces with Valeant Pharmaceuticals Intl Inc (NYSE:VRX) in an attempt to force a hostile takeover of Botox maker Allergan, Inc. (NYSE:AGN).

Michael Mauboussin: Here’s what active managers can do

michael mauboussin, Credit Suisse, valuation and portfolio positioning, capital markets theory, competitive strategy analysis, decision making, skill versus luck, value investing, Legg Mason, The Success Equation, Think Twice: Harnessing the Power of Counterintuition, analysts, behavioral finance, More Than You Know: Finding Financial Wisdom in Unconventional Places, academics , valuewalkThe debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More

The billionaire also expects the offering to improve their ability “to take advantage of market dislocations when they arise.” The shares will be offered at $25 each.

Pershing’s fund to raise $5 billion

Pershing Square also plans to invest $100 million of its own cash into the new fund. It will be separate from Pershing itself, which manages $14 billion in assets. The firm said the new fund’s market capitalization to be $5 billion or more after the IPO is complete.

According to The Wall Street Journal, the fund was established in December 2012. As of the end of June, its net asset value was $2.9 billion. The Globe and Mail reports that more than 300 investors currently have cash invested in the offshore fund.

Pershing Square reportedly selected Deutsche Bank AG (USA) (NYSE:DB) (ETR:DBK) (FRAN:DBK) and UBS AG (NYSE:UBS) (VTX:UBSN) to handle the offering.