Ackman’s Pershing Square IPO Expected to Raise $5 Billion

Summary

Bailey Lipschultz reports that Bill Ackman's Pershing Square IPO is expected to raise $5 billion, at the low end of the targeted range. He discusses the structure of the deal, the 32% discount on the London-listed closed-end fund, and the mixed performance relative to the S&P 500.

• IPO expected to raise $5 billion, bottom of the $5-$10 billion range
• Deal includes a closed-end fund and distribution of hedge fund shares
• London-listed Pershing Square fund trades at a 32% discount to NAV
• Majority of the offering is institutional (85%) with 15% retail
• Ackman's investment style has shifted from activism to a longer-term view
• Portfolio includes Amazon, Alphabet, Uber, Universal Music Group, Brookfield, Howard Hughes
• London fund underperformed S&P 500 on 1-2 year basis but outperformed longer term
• Active vs passive debate highlighted as active funds struggle to beat benchmarks