Ackman revives plan for closed-end fund IPO
Consummate dealmaker and ECM pro Bill Ackman has revived hopes of floating a closed-end fund, reportedly to be sold with an incentive to participate in the IPO of his core hedge fund Pershing Square Asset Management.
Reported across multiple media outlets over the past week, investors who participate in the closed-end fund IPO would be given stock in the Pershing Square IPO. Bloomberg on Tuesday reported that the closed-end fund would target a US$5bn raise with the firm’s partners giving away a 10% stake in the subsequent asset management IPO.
Ackman floated the idea of a US-focused closed-end fund in 2024, Pershing Square USA, that initially had targeted US$25bn, launched at US$10bn, and was later revised to US$2bn before being scrapped altogether. Citigroup, UBS, Bank of America and Jefferies were joint global coordinators on that failed effort.
The rub then was that the closed-end fund would trade at a discount to the net asset value of investments.
Ackman’s LSE-listed closed-end fund Pershing Square Holdings, which has US$19.3bn of AUM with investments in companies such as Alphabet, Amazon and Universal Music Group, trades at a roughly 25% discount to NAV.
The goal of the revised IPO effort is to mitigate the NAV discount on the closed-end IPO by gifting investors shares in the hedge fund IPO.