New structure of Pershing Square Holdings could allow for longer-term proxy battles
Pershing Square Holdings, the hedge fund run by activist investor Bill Ackman, plans to launch an initial public offering on the NYSE Euronext Amsterdam stock exchange to raise $2 bn and gain a more stable investor base for its brand of aggressive shareholder activism.
Pershing Square, which currently has an investor base of 300, has already received commitments totaling $1.5 bn from 20 ‘cornerstone investors’ as part of the IPO, and the fund and its management will invest another $100 mn, the company says in a press release. It predicts a market capitalization of at least $5 bn.
‘The IPO of Pershing Square Holdings (PSH) is a transformational event for Pershing Square and all of our investors,’ Ackman says in a statement. ‘We expect the public listing of PSH to substantially enhance the stability of our capital base, enabling us to invest a greater percentage of our assets in activist commitments on a long-term basis, and improving our ability to take advantage of market dislocations when they arise.’
The move could allow Ackman to wage longer-term activist battles without the concern that key investors might disagree with the strategy or lose patience with a lack of short-term results and withdraw funds.
In citing the ‘investment highlights’ to potential investors, PSH, which is run by Pershing Square Capital Management, says it offers an ‘opportunity to gain exposure to a concentrated portfolio of high-quality businesses that are influenced by a leading activist manager with a long-term track record.’
It also cites the ‘high degree’ of transparency of its holdings and strategies, and the ‘opportunity to acquire indirect interests in new Pershing Square activist investments at undisturbed market prices before their public disclosure.’
