By Pritam Biswas and Arasu Kannagi Basil
April 13 (Reuters) – Bill Ackman’s Pershing Square kicked off a roadshow for the U.S. initial public offerings of the billionaire investor’s management company and a new fund on Monday, despite mounting uncertainty around the Middle East conflict.
The roadshow launch comes amid a choppy market after weekend talks between the U.S. and Iran failed to deliver a deal to end the war that is now in its seventh week.
While market volatility can often dissuade companies from pushing ahead with their IPOs, Ackman is looking to take advantage of the stock market disruption to pick up attractive assets at a discount through the new fund, Pershing Square USA.
Periods of market turbulence – recently driven by factors ranging from AI-related disruption risk to geopolitical uncertainty – are often followed by shifts in asset pricing, creating attractive opportunities for investment firms.
Pershing Square USA expects to raise between $5 billion and $10 billion from the IPO and a private placement. The fund is selling shares at $50 apiece.
It has secured $2.8 billion in commitments in a private placement from investors including family offices, pension funds and insurance companies. The investors will receive 30 shares in Pershing Square for every 100 shares purchased in the new fund.
Ackman previously tried taking the new fund public in 2024, but scrapped the launch https://www.reuters.com/markets/us/ackmans-pershing-square-usa-withdraws-us-ipo-2024-07-31/ days before the scheduled debut following a series of hurdles.
The billionaire investor founded hedge fund Pershing Square Capital Management in 2004. It invests in roughly a dozen stocks – such as Amazon and Uber – and is best known for its activist campaigns.
Pershing Square USA (PSUS) is expected to mimic Ackman’s existing hedge fund and will invest in 12 to 15 undervalued North American-listed companies. The fund will offer quicker access to capital and not charge performance fees to boost its appeal to a wide pool of investors.
“A large and successful PSUS IPO will also likely contribute to our success in launching other closed-end investment companies,” Ackman had said in a letter last month to Pershing investors announcing the combined IPO.
OMAHA AMBITIONS, NEW YORK STYLE
Ackman is pivoting Pershing Square toward a long-term investment model that mirrors legendary investor Warren Buffett’s strategy at Berkshire Hathaway.
The approach focuses on acquiring significant stakes in large-cap companies and maintaining a passive, multi-year holding period, a shift from Ackman’s historical role as a confrontational activist investor.
Pershing Square earlier this month proposed a takeover of Universal Music Group in a $64 billion deal nL4N40Q0CX, the latest twist in its nearly five-year quest for the music label giant.
It would allow the company to own the moat, a term popularized by Buffett that means a durable competitive advantage, around the world’s most valuable song catalogs by artists such as Taylor Swift and Drake.
Pershing Square also raised its stake in real estate company Howard Hughes last year, realizing Ackman’s dream of creating a mini-Berkshire.
Ackman, whose current net worth is about $9 billion according to Forbes, cemented his reputation as one of Wall Street’s savviest investors by publicly pushing iconic companies ranging from Procter & Gamble to mall operator General Growth Properties to adopt changes.
Pershing Square USA will be listed on the New York Stock Exchange under the symbol “PSUS”, and Pershing Square under “PS”.
Citigroup, UBS Investment Bank, BofA Securities, Jefferies and Wells Fargo Securities are the global coordinators and bookrunners for the combined IPO.
(Reporting by Pritam Biswas, Arasu Kannagi Basil in Bengaluru and Svea Herbst in New York; Editing by Shinjini Ganguli)
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