(Bloomberg) — 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.
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The $1.05 billion investment for 10% of Pershing Square means Ackman’s stake is worth more than $3.5 billion, according to the Bloomberg Billionaires Index, sending the investor’s net worth to $8 billion.
Read More: Bill Ackman’s Pershing Square Sells 10% Stake for $1.05 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 $14 billion, one of the most expensive asset managers on the planet. Schroders Plc, whose 6,390 employees manage almost $1 trillion, has a comparable enterprise value of $9.6 billion. Investors valuing Pershing Square at $10.5 billion are betting that new fundraising will increase assets to roughly $45 billion.
A spokesperson for Pershing Square declined to comment. Ackman’s stake would be worth $4.7 billion before a deduction for key-man risk that the index applies to the value of hedge fund managers’ businesses.
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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.
Pershing is worth only slightly less than Ray Dalio’s Bridgewater Associates, which is valued at $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 $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 people with knowledge of the matter, who asked not to be identified discussing information that is private. Pershing is also targeting about $25 billion for a new US-based closed-end fund and $5 billion for an asymmetric fund, potentially more than tripling fee-paying assets.
Read More: Ackman’s Pershing Square Targets $25 Billion for US Fund
Investors in the deal include Marc Lasry and Doug Hirsch, founders of hedge funds Avenue Capital and Seneca Capital, according to people with knowledge of the matter, along with Banco BTG Pactual SA 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.
–With assistance from Katherine Burton.
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