| NEW YORK
NEW YORK Nov 28 Hedge fund manager William
Ackman moved one step closer to getting permanent capital for
his Pershing Square funds when more than 120 investors committed
to convert $2.2 billion of their investments into stakes in
Pershing Square Holdings when it goes public.
"Our principal goal in launching Pershing Square Holdings,
Ltd was to convert existing capital to an eventual permanent
form," Ackman wrote in a letter to investors. "We are off to a
good start," he added. A copy of the letter was obtained by
Ackman currently oversees roughly $11 billion in assets and
is well-known for his activist strategies including his most
recent efforts to get consumer products company Procter & Gamble
to shape up. He has long been planning a London-listed
vehicle with a market value of several billion dollars, giving
him more freedom in making long-term investments.
"With more stable capital, we can increase the proportion of
our capital in the core active investment strategy which has
historically generated much higher returns than our passive
holdings," Ackman wrote.
But to reach the goal, more work lies ahead, Ackman
acknowledged. "In order to meet the minimum public offering
condition which we established for PSH, we need to grow the
private PSH fund through capital appreciation and/or new capital
additions to a minimum of $3 billion," he said.
The deadline for investors to say if they wanted to convert
was Nov. 16. Ackman said he is considering offering a second
chance to convert for existing Pershing Square offshore
investors on July 1, 2013 "to accommodate those investors who
could not meet the November 16 deadline."
Through Nov. 17, the firm's flagship fund was up about 2
The Pershing Square funds have returned 15 percent per year
on average since Ackman launched them in 2004.