August 7, 2022

DealBook: Ackman Ponders I.P.O. for New Fund

William A. Ackman, head of Pershing Square Capital ManagementJonathan Fickies/Bloomberg NewsWilliam A. Ackman, head of Pershing Square Capital Management.

Hedge fund managers have long bemoaned that investors are too quick to pull their money in rocky times, a condition the financial crisis only exacerbated.

Few have done much about it.

Now, William A. Ackman, head of Pershing Square Capital Management, one of the strongest performing and most closely watched hedge fund managers, is considering raising capital for a new portfolio through an initial public offering, according to people familiar with the matter. He is hoping to raise as much as $3 billion, said one person.

The firm itself would not go public. But the money manager could potentially tap into the capital markets for a new fund that would be listed on an exchange, the people said, adding that the plans were not finalized.

Mr. Ackman has made no secret of his desire for a more permanent capital base, and has referenced it in past letters to his investors.

AR Magazine first reported that Mr. Ackman was considering an I.P.O. for a new fund.

Mr. Ackman, who currently oversees $10 billion, practices a style known as activist investing. His firm takes large stakes in public companies then agitates for change. The battles are often public, with Mr. Ackman calling on management to make certain changes to their businesses and fighting for seats on the corporate boards.

One of Mr. Ackman’s recent victories came this week, when J.C. Penney announced that the architect of Apple’s retail strategy would be their new C.E.O. With 17 percent stake in the retail chain, Mr. Ackman notched paper gains of $475.9 million on Tuesday. Mr. Ackman has also suffered his share of black eyes from bets gone wrong, including an investment in Target.

But overall his fund, which has been a favorite of large investors like the Blackstone Group, has produced an average of roughly 20 percent gains a year.

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