Personally would speculate it’d be a much less attractive place to work if it went public.
Much of the allure (at least to me) of large private HFs is their private nature and consequent lack of strenuous regulation (usually means higher comp). Feel like this is essentially gone if they IPO and it’s just gonna be a payday for current partners / AckDaddy.
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Based on previous WSO threads, here are some insights on the potential impact of a Pershing US IPO:
Attractiveness as a Workplace:
Regulation and Compensation:
Current Partners' Payday:
Cultural Shift:
These points reflect common concerns and considerations discussed in the WSO community regarding hedge funds contemplating an IPO.
Sources: Thoughts on Investor Relations? A good or bad move?, Why do you think public equity is more interesting than private equity?, Thoughts on Starting Investment Bank/M&A Advisory for my Company, Thoughts on Piper Sandler, Thoughts on American Securities?
looks like Big Ack tryna cash out and retire
I never understand the attractiveness of taking HF's public, especially funds that run with a lean team. Unnecessary burden imo but again I'm not running an HF lol
Yes, how unnattractive is it for the boomer founders of these institutions to equitize their would be worthless partnership stake and make billions in the process?
Yes you get liquidity in your partnership stake and can get more money vs remaining private but there's additional compliance, regulatory, quarterly earnings bs. Plus investors start pressuring on increasing fee-earning AUM. I think you're better off with it being private as you can do whatever you want like Bill downsizing his firm when he abandoned his activist/short strategy would have been hard to do had his firm been public. Just my opinion but I'm not in the HF industry so it doesn't matter much lol
Wild that he sold 10% of Pershing Square for $1.05B when they manage $16B total currently.
Ryan Israel is a billionaire now good for him
Good for him indeed, wonder how much the rest of the investment team owns. Even a 1% stake is $100mm
Very much a paper net worth. Let's see if they can actually liquidate at a level that's even remotely close to the implied valuation.
lol they already did
What do you mean? They sold a 10% stake for $1bn to private investors, and none of this is a liquidity event for the team. $500mm is seeding his new US fund and the balance will be for other fund launches. I will be shocked if this trades anywhere remotely close to $10b at IPO, unless they are going to do a Aramco and float like $100mm of market cap which again doesn't provide a true marker of value.
If this is truly the proper value, the public alts are grossly undervalued at current levels
How is a group of sophisticated investors giving Pershing a $10B value when, say, Carlyle has a $15B market cap?
is $10bn a true mark or is it a high interest PIK loan with warrants?
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