American billionaire hedge fund manager Bill Ackman is in talks to launch a new Pershing Square strategy aimed at profiting from what he sees as complacency in financial markets, the Financial Times reported.
People familiar with the matter told the newspaper the vehicle would make “asymmetric” trades, seeking gains by positioning against the prevailing market narrative.
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The plan echoes trades Pershing Square made during the coronavirus crisis. Ackman paid $27m for derivatives that rose as corporate debt sold off.
That position generated a $2.6bn gain after the pandemic triggered sharp disruption in bond markets.
Rather than placing such downside-oriented trades solely through Pershing Square’s main fund – a London-listed public vehicle with about $20bn in assets — Ackman has been discussing a separate structure, according to three people briefed on the matter.
The talks come after a difficult start to the year for the firm. Filings show Pershing Square’s flagship fund had fallen by more than 16% as of the end of March.
One person familiar with the plan said the new fund would keep much of its assets in short-term US government debt, deploying capital selectively into large credit and macro positions similar to those historically made by the main fund.
The reported discussions also coincide with Ackman’s preparations to take his hedge fund management company public.
In private discussions with prospective investors, Ackman has highlighted the “asymmetric” fund as a possible way to increase fee earnings, according to people briefed on the meetings.
He also referred to the possibility of a macro-focused fund in a regulatory filing submitted last month for the planned listing.
Pershing Square’s main fund remains concentrated, with roughly a dozen holdings, including long-term bets on Uber, Google and Amazon.
In the prospectus for the public listing, the firm said it “may choose to complement our organic growth by selectively launching new permanent capital funds and other vehicles that leverage our brand and core competencies” to expand its capital base.
Separately, Ackman has been exploring steps towards a broader conglomerate model ahead of the listing.
He has built a large stake in property developer Howard Hughes Holdings, which is being used as a vehicle to create a larger enterprise that he has pitched as a modern-day Berkshire Hathaway.
Ackman is aiming to raise $5bn to $10bn through a combined initial public offering of Pershing Square’s management company and a new US closed-end fund, Pershing Square USA.
