Hedge fund impresario Bill Ackman took a step toward taking his firm public by selling a 10% stake in the company, Pershing Square Holdings. The deal, first reported by Bloomberg, precedes Ackman’s announced initial public offering next year—and the $1.05 billion just-reported transaction suggests a $10.5 billion capitalization post-IPO.
That would be far below the market value of the top three alternative asset managers, by assets under management: Apollo Global Management ($66 billion market value), Blackstone ($143 billion) and KKR ($94 billion). The firms, which all went public more than a decade ago, now have leadership that is less often in the public eye than Ackman.
The reason for Pershing’s lower projected market value appears to be that its AUM is much smaller than those three high-fliers. For instance, Blackstone is the largest alt money manager with over $1 trillion in AUM. No. 2 Apollo has $651 billion and No. 3 KKR $553 billion. Pershing, at $18.3 billion, is No. 20, according to LCH Investments.
Ackman, though, gets a lot of attention as an in-your-face activist investor. Witness his long, acrimonious and unsuccessful campaign shorting healthcare company Herbalife, which he condemned as a Ponzi scheme. He was more successful in his push to revamp Canadian Pacific Railway, whose stock tripled between 2011 and 2016, when he sold his last shares in it. (He later took a small position.) Ackman was a major force in pushing out Harvard’s president amid the turmoil of pro-Hamas sentiment on college campuses.
His outsized public personality overshadows the folks who now run the top three alt asset managers. Apollo is headed by CEO Marc Rowen, one of its founders; the better-known co-founder, Leon Black, stepped down after his dealings with sex offender Jeffrey Epstein became public. Joseph Bae and Scott Nuttall are KKR’s co-CEOs, with founders Henry Kravis and George Roberts still involved in lesser operational roles,as co-executive chairmen. Blackstone’s co-founder, Stephen Schwarzman, remains its CEO, although he never had Ackman’s public panache.
The 10% Pershing stake announced Monday was sold to several investment firms, including Bermuda reinsurer Arch Capital Group and Brazilian bank BTG Pactual. A Pershing subsidiary is publicly traded in Amsterdam. Pershing reported an increase last year of 26.9% in earnings, a bounce back from its 2022 loss.
The new investors will own 10% of a newly formed limited partnership, which in turn will own Pershing, the firm stated. In addition, the company announced that it had reorganized its governance structure, and named Ben Hakim, a member of the Pershing investment team, to be president of Pershing.
Tags: Apollo, Bill Ackman, Blackstone, Canadian Pacific, Herbalife, KKR, Pershing Square