Pershing Square Capital Management, L.P.
Hedge fund management company Pershing Square Capital Management is probably best known for its founder, activist investor Bill Ackman and his controversial positions in such companies as Herbalife and Wendy’s. The firm currently oversees three investment funds worth billions of dollars.
The firm's client base is made up entirely of pooled investment vehicles with almost $17 billion in assets under management.
Pershing Square Capital Management Background
Bill Ackman founded the firm in 2004 with $54 million of his and former business partner Leucadia National’s money. In its first 10 years, the New York firm delivered $11.6 billion in gains. Today, it employs a group of advisors who oversee its funds' management. Now a billionaire, according to Forbes, Ackman is the majority owner.
Pershing Square Capital Management Client Types and Minimum Account Sizes
The firm describes its investors as high-net-worth individuals, pension funds, profit-sharing plans, trusts, estates, charitable organizations, corporations, business entities, endowments and foreign sovereign wealth funds. That said, one of its funds, Pershing Square Holdings (ticker: PSHZF) is a public fund, whose shares can be bought over the counter from a broker-dealer.
Pershing Square Capital provides its minimum subscriptions in each private fund’s offering documents.
Services Offered by Pershing Square Capital Management
As mentioned earlier, Pershing Square Capital manages hedge funds—two of which are private, while one is public. Private funds Pershing Square, L.P. and Pershing Square International, Ltd. generally have the same strategies and objectives as Pershing Square Holdings, Ltd., the public fund. The firm is not actively seeking new investors for its two private funds.
At times, the firm may also provide investment advisory or management services to other funds or products.
Pershing Square Capital Management Investing Philosophy
Pershing Square Capital Management looks for large, well-established companies it believes are undervalued by the market. The firm tends to invest in a small number of businesses—between eight and 12—that it understands well and expects to hold for the long term. It generally favors companies with steady cash flow, strong brands and room for improvement.
In some cases, Pershing Square may take an active role by engaging with management or suggesting changes aimed at boosting shareholder value. While not every investment involves this kind of engagement, it’s a recurring theme in the firm’s approach. The strategy is research-driven and focused on building value over time rather than chasing short-term gains. The portfolio typically includes a handful of high-conviction positions.
Fees Under Pershing Square Capital Management
Pershing Square Capital bases the management fees that it takes from its funds based on a percentage of assets under management. Generally, the percentage is 1.5% annually for the core funds. On top of that, the firm collects a performance-based fee, which generally starts at 20% of the increase in net asset value (after the management fee and other losses have been deducted). The firm may negotiate any fees at its discretion and fees may vary by product or service.
What to Watch Out For
Pershing Square Capital has one disclosure on its most recent filing with the SEC. The regulatory disclosure, which was resolved in January 2017, involved an employee’s $500 personal contribution to a political campaign in violation of SEC rules. The contribution was returned and the firm, without admitting to the allegations, consented to a cease and desist order and a censure, and paid a $75,000 civil penalty.
Opening an Account With Pershing Square Capital Management
To contact Pershing Square Capital, call (212) 813-3700. To find out more about Pershing Square Holdings, email IR-PershingSquareHoldings@camarco.co.uk.
All information is accurate as of the writing of this article.
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