Bill Ackman’s Pershing Square Capital Management LP received $2.2 billion in commitments for a new fund that will eventually be publicly traded, he said in a letter to investors obtained by Bloomberg News.
The money is coming primarily from existing investors who elected to convert some or all of their investment in Pershing Square funds, Ackman wrote in the letter, dated Nov. 26. Pershing Square Holdings Ltd. will be a “publicly traded permanent capital vehicle” that will ultimately be listed on the London Stock Exchange, Ackman said.
Pershing Square joins hedge funds such as Brevan Howard Asset Management LLP in London and Third Point LLC in New York in selling shares in individual funds. By having a publicly traded fund, investors can increase or reduce their stake without affecting the fund’s holdings, allowing fund managers to make investments with a longer-term horizon.
“Our principal goal in launching PSH was to convert existing capital to an eventual permanent form,” Ackman said in the letter. “With more stable capital, we can increase the proportion of our capital in the core active investment strategy which has historically generated much higher returns than our passive holdings.”
Pershing Square received commitments from more than 120 investors, Ackman said. More than half of the committed capital came from U.S. investors and the rest from offshore clients. The firm has to increase assets in the new fund to a minimum of $3 billion in order to publicly list it. The company aims to grow the proportion of assets from offshore investors to a “substantial majority” of the fund, he said.
Ackman didn’t immediately respond to a request for comment