(Reuters) - Billionaire investor William Ackman said on Monday he was looking to raise $3 billion and commit at least $1 billion from his hedge fund Pershing Square Capital Management LP for a new blank-check investment vehicle, the largest of its kind.
Ackman, whose New York-based hedge fund manages more than $10 billion in assets, can make additional commitments and boost the size of the capital raise to $6.5 billion, according to a filing with the U.S. Securities and Exchange Commission.
The special purpose acquisition company (SPAC), Pershing Square Tontine Holdings, Ltd, plans to go public with 150 million units at $20 each, according to the filing. Reuters first reported Ackman’s plans earlier this month.
A SPAC uses IPO proceeds and borrowed funds to acquire a company, typically within two years. Investors are not notified in advance which company a SPAC will buy. Ackman said in the filing it will seek to acquire a venture capital-backed company that he called a “mature unicorn” which has chosen to remain private.
Ackman’s vehicle will handily beat out former Citigroup Inc (C.N) executive Michael Klein’s Churchill Capital Corp, which raised $1.1 billion, as the largest ever SPAC.
“The theory has been up to now you don’t want to get too big as a SPAC because then you’re competing with all the private equity firms for assets,” said Douglas Ellenoff, partner at law firm Ellenoff Grossman & Schole LLP. “He’s saying, ‘Bring it, we’re prepared to compete.’”
Ackman is raising the SPAC after his hedge fund gained roughly 30% since January despite the COVID-19 pandemic.
SPACs have raised $10.4 billion through U.S. IPOs so far in 2020, according to SPAC Research, on track to exceed the record $13.6 billion in all of 2019.
Ackman is looking to list the SPAC’s shares on the New York Stock Exchange under the symbol “PSTH.U”.
Reporting by Svea Herbst-Bayliss in Boston and Joshua Franklin in New York; Editing by Richard Chang