Pershing Square Plans $1 Billion Single-Stock Fund

Jul 9 2013 | 12:35pm ET

Pershing Square Capital Management is seeking up to $1 billion for a new special-purpose vehicle that will invest in a single stock.

The New York-based hedge fund aims to raise the money over the next nine days. The SPV will invest alongside Pershing Square's existing hedge funds, which will invest up to $2 billion in the stock itself. Pershing Square aims to buy in excess of 5% of the stock and then launch an activist campaign to force changes.

An institutional investor has given Pershing Square an "indication of interest" to invest $200 million in the fund, it said.

The hedge fund did not identify the stock, saying only that it is a large-capitalization, investment-grade U.S. corporation that operates primarily in a single business. Pershing Square founder William Ackman wrote that its stock trades at a lower multiple than its closest competitor.

"The business is simple, predictable and free-cash-flow-generative, and enjoys high barriers to entry, high customer switching costs and substantial pricing power," he wrote.

The new SPV is not the first time that Pershing Square has created a single-stock fund, but the firm certainly hopes it goes better than its previous attempt. A $2 billion Target Corp.-only fund raised in 2007 lost 90% of its value in just two years.

Pershing Square has launched four previous single-stock funds.

The new fund will charge a 0.25% management fee and a performance fee of between 5% and 15%.


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note