UPDATE 3-Ackman's Pershing Square raises $1.05 bln in stake sale ahead of potential IPO

Reuters · 06/03 11:17
UPDATE 3-Ackman's Pershing Square raises $1.05 bln in stake sale ahead of potential IPO

Adds details on leadership changes in paragraph 9

- Billionaire Bill Ackman's Pershing Square Capital Management has raised $1.05 billion by selling 10% stake in the hedge fund to a consortium of institutional investors and family offices, it said on Monday.

The sale is a precursor to a potential initial public offering that could happen year or in 2026. Investors are valuing the firm at $10.5 billion, Reuters reported last week.

Investment firm ICONIQ, specialty insurer Arch Capital Group ACGL.O, investment bank BTG Pactual, Israeli insurer Menora Mivtachim, investment manager Consulta and an international group of family offices took part in the funding.

"This investment will help accelerate our growth in assets under management in existing and strategies," CEO Ackman said.

About $500 million of the money raised will anchor Ackman's investment portfolio in the United States, which will be listed on the New York Stock Exchange.

The fund will mimic Ackman's Europe-listed hedge fund Pershing Square Holdings PSH.AS, but offer lower fees and quicker access to capital.

The rest of the money will be used for funds that Ackman plans to launch.

Pershing Square has also set up an independent board of directors and reorganized its ownership structure.

It appointed insider Ben Hakim as the president of the hedge fund, in addition to him being a member of Pershing's investment team. Nick Botta, who was previously president, will become vice chairman.

The hedge fund has stake in companies such as Google parent Alphabet GOOGL.O, Chipotle Mexican Grill CMG.N and Universal Music Group UMG.AS.

BofA Securities, Citigroup, Evolve, Jefferies, and UBS Investment Bank were the placement agents for the funding round.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shilpi Majumdar)