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Bill Ackman selling Pershing Square stake at $10.5B valuation

Bill Ackman, Pershing Square Capital Management CEO, speaking at the Delivering Alpha conference in New York City on Sept. 28, 2023.

Adam Jeffery | CNBC

Billionaire investor Bill Ackman is selling a 10% stake in Pershing Square, aiming to eventually take his investment firm public.

Ackman’s firm is raising $1.05 billion in a funding round, worth 10% of the management company and implying a valuation of $10.5 billion, according to a source familiar with the matter. Investors on the deal are institutional and family offices who prefer to remain anonymous, the source said.

The Wall Street Journal first reported on the moves. Pershing Square declined to comment.

With the funding round, the hedge-fund manager is eyeing an eventual initial public offering in the U.S., but he hasn’t hired bankers or started that process officially yet, the source said.

Two years ago, Ackman named Ryan Israel chief investment officer, marking the first time the billionaire hedge-fund manager appointed someone else to run day-to-day investing for the firm. Ackman serves as CEO, with ultimate control over decision-making, although he has said that Israel would be his successor to run the firm if he got hit by a “pie truck.”

Pershing Square had $18.6 billion in total assets under management as of the end of April. Most of its capital is in Pershing Square Holdings, a closed-end fund that trades on European stock exchanges. 

Ackman has become one of the world’s most prominent hedge-fund investors after years of market-topping returns and vocal activist campaigns. He also gained a wide following on social media platform X with 1.2 million followers, commenting on issues ranging from antisemitism to the presidential election.

Earlier this year, Ackman unveiled plans to offer a new investment vehicle listed on the New York Stock Exchange, a move to leverage his following among Main Street investors. He is launching a publicly traded closed-end fund, investing in 12 to 24 large-cap, investment-grade, “durable growth” companies in North America.

The popular investor’s hedge fund held only six stocks at the end of March, including Alphabet, Chipotle Mexican Grill and Hilton Hotels. It posted a 26.7% gain last year.

In 2022, Ackman quit activist short selling, a practice he engaged in that led to one of the most colorful battles in Wall Street history against Herbalife.

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