Bill Ackman, the billionaire ally of Donald Trump, has asked shareholders of his Pershing Square fund to back a new investment venture that aims to manage about $25 billion in assets.
The 58-year-old hedge fund manager, whose net worth is estimated at $9 billion, wrote the letter seeking support for Pershing Square USA, which plans to go public next week.
Ackman, who endorsed Donald Trump for president two weeks ago shortly after the assassination attempt on the former commander in chief, said shareholders should get involved in the IPO “the sooner the better” to “increase the strength” of the deal.
Ackman’s hedge fund has generated an annual return of 16.5% since it was founded two decades ago, and he recently sold his shares in the firm for more than $10 billion.
The company’s shareholders consist primarily of institutional investors and high net worth individuals.
“Pershing Square has an enormous global presence in the investment world. We have had access to senior members of some of the world’s largest and most influential investors, including sovereign wealth funds, family offices, mutual funds and hedge funds,” he wrote.
He added: “It’s really important for banks to get a sense of the momentum that’s building in deals and communicate that to all institutional capital markets desks, and the financial advisory industry also wants to hear that institutional investors are interested and eager.”
The new company will be similar to Pershing Square in that it will focus its investments on large companies, but costs will be lower because it won’t charge success fees.
Pershing Square USA will be structured as a “closed-end” company, meaning it will sell a set number of shares in an initial public offering.
Investors can exit by selling their shares to other investors at the price they receive on the open market.
According to an SEC filing citing Ackman’s letter, he initially suggested the company could raise as much as $25 billion in the IPO, but so far he expects to raise more like $2.5 billion to $4 billion.
Ackman sent the letter under the impression that it did not need to be made public, according to the filing.
He also revealed the names of some of the new investors that have already expressed interest in the planned IPO, including the Baupost Group and the Texas Teachers Retirement System.
The billionaire Harvard alumna was one of the most vocal advocates for the resignation of now-departed president Claudine Gay over anti-Semitic, pro-Hamas protests on campus earlier this year.
He shot to fame in 2012 after his disastrous $1 billion capital shortfall at nutritional supplement company Herbalife led to rival activist Carl Icahn taking opposing positions on the company’s future, and the two had an infamous live CNBC debate the following year.
