Bill Ackman, founder of Pershing Square Capital Management, announced yesterday evening that he is planning to sell shares in his prominent hedge fund in order to generate capital for more investments. He told an audience at the Harmonie Club in New York that the shares are expected to be made available in early 2012. When asked for his reasoning, Ackman explained that current “prices assume financial Armageddon”, but it is more likely that he has learned from his mistakes.
In 2009, his Pershing Square lost around 27% of its capital when investors opted to pull out. By listing shares in his fund, Ackman doesn’t “have to worry about investors pulling cash redemptions,” explained BusinessWeek on Wednesday. “Closed-end funds raise capital by selling a set amount of shares through an initial public offering, then trade on an exchange like a stock. The price can fluctuate above or below the value of the underlying holdings.”
Ackman was very careful however to explain that Pershing Square would not be going public.