Bill Ackman’s wealth hits US$8 billion on vision of supersized Pershing
A GROUP of investors betting Bill Ackman can massively scale his asset manager, Pershing Square Capital Management, have catapulted the hedge fund manager to the ranks of the world’s richest.
The US$1.05 billion investment for 10 per cent of Pershing Square means Ackman’s stake is worth more than US$3.5 billion, according to the Bloomberg Billionaires Index, sending the investor’s net worth to US$8 billion.
For the first time Ackman, 58, appears in Bloomberg’s ranking of the world’s 500 wealthiest individuals at 333rd, with a net worth higher than that of prominent financiers such as Jon Gray, George Soros and Todd Boehly.
It also makes Pershing Square, which has just 41 employees and manages fee-paying assets of about US$14 billion, one of the most expensive asset managers on the planet. Schroders, whose 6,390 employees manage almost US$1 trillion, has a comparable enterprise value of US$9.6 billion. Investors valuing Pershing Square at US$10.5 billion are betting that new fundraising will increase assets to roughly US$45 billion.
A spokesperson for Pershing Square declined to comment. Ackman’s stake would be worth US$4.7 billion before a deduction for key-man risk that the index applies to the value of hedge fund managers’ businesses.
New York-based Pershing becomes one of the most highly valued hedge funds in Bloomberg’s index, worth more than Renaissance Technologies’ Medallion Fund, Israel Englander’s Millennium Management and Paul Singer’s Elliott Management.
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Pershing is worth only slightly less than Ray Dalio’s Bridgewater Associates, which is valued at US$14 billion. Bloomberg calculates Bridgewater’s value based on a stake owned by the Teacher Retirement System of Texas in June last year, when the hedge fund firm managed around US$97 billion.
The Pershing deal was attractive because almost all of its assets under management are permanent capital, meaning fees are more predictable than typical hedge fund structures that permit withdrawals, according to sources with knowledge of the matter, who asked not to be identified discussing information that is private. Pershing is also targeting about US$25 billion for a new US-based closed-end fund and US$5 billion for an asymmetric fund, potentially more than tripling fee-paying assets.
Investors in the deal include Marc Lasry and Doug Hirsch, founders of hedge funds Avenue Capital and Seneca Capital, according to sources with knowledge of the matter, along with Banco BTG Pactual and Iconiq Investment Management.
The influx of capital comes as Ackman’s public profile is as high as it’s ever been. The investor has been vocal in his opposition to campus protests over Israel’s actions in Gaza, and successfully pushed for the ouster of Harvard University president Claudine Gay over her response to the issue. BLOOMBERG
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