Bill Ackman’s Pershing Square Targets Raising $25 Billion for US Fund

(Bloomberg) — Bill Ackman’s Pershing Square aims to raise $25 billion for a new closed-end fund expected to draw interest from US retail investors, which would more than double the fee-paying assets the firm manages, according to people with direct knowledge of the plans.

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The vehicle, known as Pershing Square USA Ltd., has filed plans to list on the New York Stock Exchange, and will significantly amplify the management company’s revenue ahead of a potential initial public offering, said the people, who asked not to be identified because no target has been made public. For the US closed-end fund, Pershing plans to charge a 2% management fee, which would be waived for the first 12 months, and no incentive fee, filings show.

The expected asset growth enabled Pershing Square to nab a valuation of $10.5 billion in a stake sale announced Monday. The firm already has a European closed-end fund, Pershing Square Holdings Ltd., which has about $15 billion in assets, among other vehicles.

The new US vehicle may lure institutional investors, in addition to retail backers. BlackRock Inc., for instance, is listed as a holder of the European closed-end fund.

Read More: Bill Ackman’s Pershing Square Sells 10% Stake for $1.05 Billion

Investors in the Pershing management company are shielded from incentive fees, or carry, and are betting on the predictability of the firm’s fee-related earnings. Ares Management Corp., an alternative-asset manager which is already public, has a market capitalization of about $42.4 billion, representing a multiple of 35.3 times its fee-related earnings in the 12 months through March 31.

Ackman’s firm also has plans to raise an asymmetric fund that invests assets in Treasuries and puts a portion in potentially high-upside bets, said the people. Pershing told investors it aims to raise $5 billion or more in client assets for this strategy, they said.

A Pershing Square spokesman declined to comment.

Ackman made a name for himself as an activist investor, betting against companies including Herbalife Ltd. and bond insurer MBIA Inc. He has developed an increasing presence on social media, has been an active supporter of Israel in recent months and has agitated against antisemitism on US college campuses.

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His firm’s more-staid approach of taking large positions in certain companies — including Alphabet Inc., Chipotle Mexican Grill Inc. and Hilton Worldwide Holdings Inc. — delivered a 26.7% gain last year as stock markets rallied.

(Updates with possibility of luring institutional investors in fourth paragraph.)

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