Hedge fund billionaire Bill Ackman’s investment firm is working on a new investment vehicle to give investors access to pre-IPO companies, joining a wave of new funds offering exposure to fast-growing startups.
Pershing Square Inc. has begun the process to launch the fund, Pershing Square Ventures Ltd., an evergreen permanent capital vehicle that will be able to own companies after they become public, Ackman and Ryan Israel, the firm’s chief investment officer, said in a letter to shareholders Wednesday.
Pershing Square recently made several private investments and holds them on its balance sheet, which will form part of the initial portfolio, according to the letter. Select private investments made by Ackman’s family office will also be contributed.
“One of the biggest, I would say, complaints of the average investor today is while SpaceX is an amazing company and still has a great trajectory, their first chance to invest in SpaceX was at a $1.5 trillion valuation,” Ackman said on the company’s earnings call Thursday.“I got to invest in SpaceX and X and xAI at much lower valuations.”
“We want to give that opportunity to the average person on the street, so to speak, and that’s what we intend to do with Pershing Square Ventures,” Ackman said. “And we’re going to seed it with investments so people will know what they’re investing in.”
Pershing is targeting the fall or the end of the year for the fund, and intends to file with the US Securities and Exchange Commission, Ackman said.
The new vehicle follows the initial public offering in April of Pershing Square USA Ltd., a closed-end fund managed by Pershing Square Inc. and invested in a concentrated portfolio of public companies, as well as the listing of Pershing Square itself.
Pershing Square USA’s shares climbed as much as 1.7% on Thursday to $39.75 each, below both the $50 IPO price and the fund’s net asset value of $50.32 reported on Pershing Square’s website. Pershing Square Inc. shares rose as much as 0.4% to $38.95 each.
The move comes as several closed-end funds focused on private company investments have gone public this year, including two funds from Robinhood Markets Inc. as well as Fundrise Innovation Fund LLC, and Powerlaw Corp.
Pershing Square Inc. on Wednesday reported a net loss of $40.5 million in the second quarter on revenue of $54.2 million. The firm announced new investments in companies including Visa Inc., Mastercard Inc. and Netflix Inc.
The new vehicle will invest in a broad spectrum of companies with valuations ranging from hundreds of millions to so-called decacorns, or companies worth more than $10 billion. The fund will start small and initially would not materially add to Pershing Square’s assets under management, Ackman said on the call.
Written by: Anthony Hughes @Bloomberg
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