(Reuters) – Hedge fund billionaire Bill Ackman is planning an initial public offering for his investment firm Pershing Square Capital Management as soon as next year, the Wall Street Journal reported on Friday, citing people familiar with the matter.
A booming stock market and economic resilience have spurred a spate of companies to list their shares and take advantage of the recovering U.S. IPO market.
As a precursor to a public listing, Ackman is selling a stake in Pershing Square to investors in a funding round expected to value the firm at around $10.5 billion, the report said, adding the deal is expected to close in coming days. Pershing had $18 billion in assets in February.
According to the Journal’s report, Pershing Square has told potential investors to compare it to asset managers such as Brookfield Asset Management, which has $925 billion in assets under management and a market capitalization of $17.5 billion, and Blue Owl Capital, which manages $174 billion and is valued at $27.6 billion, rather than hedge funds.
British hedge fund Man Group has $175.7 billion under management and a market capitalization of roughly $4 billion.
The firm justified its high valuation to investors by explaining it expects to manage considerably more money and eventually earn more in fees, after Pershing Square U.S.A. and other funds launch, the report said.
Pershing Square did not immediately respond to a Reuters request for comment.
Earlier in the year, a regulatory filing suggested that Ackman is launching a new investment portfolio in the United States that will mimic his existing hedge fund, but offer lower fees and quicker access to capital.
The offerings could quickly make the new fund popular on Wall Street, where high fees and regulatory hurdles discourage some investors from choosing hedge funds.
Pershing Square, which has a publicly listed fund in Europe, returned 26.7% last year, beating the broader stock market gains and bouncing back from a loss in 2022.
Founded by Ackman in January 2004, Pershing Square Capital Management generally invests in roughly a dozen stocks and is best known for its activist campaigns.
(Reporting by Pritam Biswas in Bengaluru; Editing by Shinjini Ganguli and David Holmes)
