Can Bill Ackman Cash in on His Growing Fame?

Bill Ackman is betting that investors will want to buy into Pershing Square’s growth potential.Credit…Mike Blake/Reuters

Betting on Ackman

Bill Ackman has gained new prominence in recent months for his outspoken presence on social media. But he has also made riches for his investors and himself — and now others are hoping he’ll continue to do so.

His Pershing Square Capital Management has sold a 10 percent stake for just over $1 billion to an array of outside investors, giving the hedge fund a lofty valuation. The question is whether Ackman’s newfound fans on social media will follow him as he grows his empire, including through a new listed fund and, eventually, an I.P.O.

Pershing Square is now valued at $10 billion. Among those that bought into the firm are Arch Capital Group, BTG Pactual and Iconiq Investment Management; Bloomberg reports that Ackman peers including Marc Lasry and Doug Hirsch also bought in.

That has bolstered Ackman’s paper worth to $8 billion, Bloomberg calculates, making him 333rd among the world’s wealthiest people.

Investors are betting on Pershing Square continuing to mint money. Ackman rose to fame as an activist investor who profited by shaking up companies, a strategy that made lots of money — but also lost a lot. He now focuses more on a few concentrated bets, including on Chipotle Mexican Grill and Universal Music Group. That approach has paid off, with a 26 percent return last year.

Ackman’s firm also has a big advantage over rivals: Its publicly listed fund, which trades in Amsterdam and London, has permanent capital, where those who buy in can cash out only if someone buys their stake. (Other rivals let investors pull their money on a daily or quarterly basis.) That allows for more predictable assets and management fee revenue.