Rothschild, Qatar Holding Invest in Ackman’s Pershing Square IPO

Qatar Holding LLC and Rothschild units are among the key investors in the European initial public offering of Pershing Square Holdings Ltd., one of the funds managed by activist investor Bill Ackman.

Rothschild Bank AG and Rothschild Wealth Management UK Ltd. bought shares worth a combined $273.9 million in the $2.7 billion IPO, according to the sale prospectus. Each share was priced at $25. Qatar Holding bought a stake worth $140.8 million.

The company increased the size of the IPO from $2 billion amid strong investor demand. Parent company Pershing Square Capital Management LP and associated funds have about $14 billion under management, including key stakes in Allergan Inc. and Burger King Worldwide Inc.

Swedish pension fund Forsta Ap-Fonden bought a stake valued at $200 million. Schroder & Co Bank AG and Blackstone Alternative Asset Management LP will hold upwards of 3.5 percent of the net asset value after the IPO, the prospectus showed. The IPO will begin trading on Oct. 13 on Euronext Amsterdam.

Risk Factors

Ackman’s activist investment strategies have seen him clash with companies and the U.S. government. The prospectus highlighted the potential risk to investors of such battles, including a suit filed by Allergan alleging Ackman and other defendants made public misstatements and violated insider trading laws. The filing called the suit “baseless”.

The day Ackman announced the close of the IPO, Fannie Mae and Freddie Mac, in which parent company Pershing Square holds stakes, each lost over a third of their value following a court ruling against investors battling to force the bailed-out mortgage providers to share profits with private shareholders.

Pershing Square filed a separate suit over the mortgage companies in the U.S. Court of Federal Claims in Washington in August, claiming the government’s diversion of profits violates the Constitution’s Fifth Amendment, which prohibits the taking of private property for public use without just compensation.

Deutsche Bank AG and UBS AG managed the IPO. Placing fees and other costs of the sale will total $95.5 million, according to the prospectus.

Before it's here, it's on the Bloomberg Terminal.