Bank is among investors who bought 10% of Bill Ackman’s firm, which, ahead of an IPO, is welcoming outside partners for the first time
06/04/2024
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Bill Ackman — Foto: Jeenah Moon/Bloomberg
Brazilian investment bank BTG Pactual is part of a consortium that acquired a 10% stake in Bill Ackman’s Pershing Square management company, according to a document released by the firm. Other investors in the group include Arch Capital, Consulta Limited, Iconiq Investment Management, Menora Mivtachim Holdings, several family offices, and additional investors.
“We are delighted to invite a group of world-class, long-term partners as investors in our business, which has been entirely owned by Pershing Square employees since our inception more than 20 years ago,” said Mr. Ackman in a statement. While individual stakes of the investors were not specified, the total 10% share was purchased for $1.05 billion.
Mr. Ackman stated the funds will be used to “help accelerate our growth in assets under management” across Pershing Square’s existing and new investment strategies. He reaffirmed the company’s commitment to “generating high, long-term returns for our investors.”
Last week’s announcement of the sale of a 10% stake in Pershing Square hinted at preparations for a possible initial public offering (IPO) next year.
While the latest statement from the management company did not confirm these IPO plans, it detailed significant organizational changes, including the appointment of Ben Hakim as the director of Pershing Square Capital Management (PSCM). This restructuring is designed to ensure that Bill Ackman retains voting power, safeguarding it against potential shareholder dilution. Mr. Ackman, a high-profile activist investor renowned for his strategic positions against companies like Herbalife and bond insurer MBIA, has a robust presence in both the boardroom and on social media.
The restructuring also establishes a new board of directors. It will comprise five independent members—Kerry Murphy Healey, Orion Hindawi, Nicholas Lamotte, Christine Todd, and Brazilian native Marco Kheirallah—alongside members linked to Mr. Ackman’s management team: Ryan Israel, Nick Botta, and Halit Coussin.
Mr. Kheirallah, Daniel Goldberg’s partner at Lumina Capital and former BTG Pactual executive, joins representatives from the newly invested management companies as the first outside partners in the firm’s history. Previously, Pershing Square relied solely on executive partners since its founding.
This collaboration marks a significant valuation of Pershing Square at just under $10 billion, aligning it with major industry players like TPG and CVC Capital in terms of market value, although its revenue scales are somewhat more modest, according to Financial Times.
For context, Pershing’s main fund, which manages $15 billion, generated $155 million in management fees and $312 million in performance fees last year. In comparison, TPG, which went public two years ago with a valuation of around $10 billion, reported over $600 million in management fees in the year preceding its IPO.
Pershing Square is poised to list shares in the U.S. next year.
The sale of the stake in Pershing Square was coordinated by Bank of America, Citigroup, Evolve, Jefferies, and UBS. BTG declined to comment.
*Por Álvaro Campos, Maria Luíza Filgueiras — São Paulo
Source: Valor International