By Dane Hamilton (Reuters)
Pershing Square Capital Management, the $6 billion hedge fund group, is likely to seek a public listing for one of its funds in coming years, founder and partner William Ackman said on Wednesday.
Ackman, who recently raised a $2 billion fund to exclusively invest in Target Corp said tapping public markets for funds would give it capacity to make larger investments and have more influence in its activist stockholder campaigns.
“The natural evolution at some point is that I believe our fund will be publicly traded,” said Ackman, speaking at a New York conference on Wednesday. “It would give us more staying power and credibility with management. If we had permanent capital I think it would be good for investors and good for us.”
But he added that “the timing is not right now.”
Ackman’s comments come after several large U.S.-based hedge funds, including Och-Ziff Capital Management Group and Fortress Investment Group LLC listed shares for the first time on the New York Stock Exchange.
But shares in both companies declined after their listings, reflecting investor concerns their strategies may be affected by gyrations in the credit markets and other issues, causing other hedge funds to pull back on similar IPO plans.
Unlike the Och-Ziff and Fortress listings, Ackman said he would not be listing the Pershing Square management company, but only a fund that it would manage.
Ackman declined to elaborate on any timing for such a move at the conference on activist hedge fund issues sponsored by Kirkland & Ellis and Schulte Roth & Zabel, two law firms with large rosters of hedge fund clients.
But the high-profile fund manager said that having “permanent capital” would allow it to buy even larger stakes in big companies than it has in the past.
Ackman’s recent successes in influencing strategies at restaurant chain McDonald’s Corp and Ceridian Corp CEN.N have won him accolades among investors.
Ackman said he amassed a stake in McDonalds in recent years at an average price of around $28 per share and proposed strategic changes. The stock has steadily risen and closed at $59.51 on Wednesday on the New York Stock Exchange.
Investors are closely watching his campaign at retailer Target, but he has so far said little publicly, other than that he plans to make proposals to management to increase its value.
Last week, at a New York investor conference, Ackman repeated his previously held view that bond insurers MBIA Inc and Ambac Financial Group Inc are headed for serious financial crises. The investor is “short” the stocks, meaning he is betting they will plummet.
MBIA stock fell 15.9 percent on Wednesday after Moody’s Investor Service expressed similar concerns.