Bill Ackman Sets Out to Raise $4B for New “Mystery” Investments

- Bill Ackman, the high profile hedge fund manager, is planning to raise $4 billion from stock investors to be used on a mystery investment. Photo Credit: AP

By: Desiree DeBuque

Bill Ackman, the high profile hedge fund manager, is planning to raise $4 billion on Tuesday July 21.  As reported by the NY Post, the funds which the billionaire hopes to raise from stock investors is to be used on a mystery investment.  The 54-year-old founder and CEO of Pershing Square Capital Management will try to sell 200 million units of his new blank-check company, Pershing Square Tontine Holdings, at $20 a share on Tuesday.  His track record is good enough to invite confidence, but the caveat is that he is not divulging any information about what his planned investment target will be.  The only hint he will give potential investors is the boilerplate info, just to provide a rough idea of the types of companies that he may opt for.

Representatives for Ackman declined to comment or to add any information.  The Post reported that sources say Ackman has indicated that potential investment targets may range from the media empire of Mayor Michael Bloomberg to Airbnb, the vacation home rental platform, to DirectTV, which is AT&T’s struggling satellite Television provider.  “Ackman told me in the last few months that he would like to buy Bloomberg,” one anonymous source told The Post.  However, the source was quick to add that he didn’t think it was likely that Ackman could make a deal to invest in Bloomberg’s media giant, because if the namesake founder who owns 88 percent of the company valued at $50 billion, were interested in selling, he could easily get more funds from larger investors such as Warren Buffett.

Besides for the $4 billion Ackman plans to raise by selling shares of his blank-check company, more formally known as a special-acquisition vehicle, Ackman has also committed to invest $1 billion to $3 billion of investor capital from his current fund, Pershing Square Capital, into the mystery investment.

Pershing Square Capital, which he started in 2004, has been a widely successful hedge fund.   Ackman had placed hefty bets on a variety of stocks to grow the fund into an $11 billion giant in a span of only 10 years. Just in 2014 alone, Ackman made $4.5 billion in profits for his Pershing Square investors.  After that, Ackman did hit a brick wall, with a five-year losing streak.  Those losses were optimized by his outspoken $1 billion bet against Herbalife, the nutritional shake company which he was sure would be revealed as a scam.  By the end of 2017, however, Ackman had managed to bounce back with successful investments in Chipotle, Nike and Starbucks.  In 2019, the fund returned a respectable 58.1 percent.  Even in late March, just before the Coronavirus pandemic forced the economic shut down, he had announced his fund was up with a $2.6 billion profit.

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