Bill Ackman, the activist hedge fund manager, said his firm, Pershing Square Capital Management, is targeting an initial public offering of a closed-end fund this year to give him more power to invest for the longer term.
Selling shares to the public will enable his firm to raise permanent capital, according to an investor letter obtained by Bloomberg News.
“Because we are an active, control and influence-oriented investor, we have avoided being fully invested because of the risk of investor redemptions,” Mr. Ackman wrote in the letter. “We will hopefully begin to address this issue with the initial public offering of Pershing Square Holdings Ltd., targeted for later this year, which will increase the amount of our capital that is permanent.”
Mr. Ackman has planned to sell shares to the public since at least 2011, to avoid a repeat of 2009 when investors redeemed about 27% of the firm's capital. In May 2013, he told investors he was about $500 million short of the $3 billion he wanted to raise for a publicly traded fund to list on the London Stock Exchange. Pershing Square itself would not be going public. His main hedge fund has gained 25% this year through June.