Elliott Investment Management targeted Pershing Square Holdings in 2017, when Paul Singer’s firm privately tried to force fellow activist Bill Ackman to liquidate his listed company.
Ackman publicly revealed details of the battle surrounding the fund for the first time during a three-hour interview on the Lex Fridman podcast. The billionaire published discussion on X, the social media site formerly known as Twitter, on Tuesday.
Elliott took a large position in Pershing Square Holdings, a closed-end vehicle that was trading at a discount to the value of its assets, while selling the underlying securities held in the fund, Ackman said. There was a bet that the target would be forced to liquidate, allowing investors to profit from the shakeup.
“I imagined an end where the permanent capital vehicle ended up liquidated and another activist in my industry drove me out of business,” Ackman said.
Ackman managed to fend off Elliott by buying shares of his own company, effectively gaining control, he said. He borrowed $300 million from JPMorgan Chase & Co. to help him do this.
“I give JPMorgan tremendous credit for getting this done,” Ackman said. “It’s a handshake bank and they bet I could do it.”
A representative for Elliott declined to comment.
Activist campaigns in the closed-end fund market have seen a resurgence in recent years. Firms including Boaz Weinstein’s Saba Capital Management have seized on the historical price dislocations of these funds and urged asset managers to take steps such as share buybacks or asset liquidations to boost valuations.
Pershing Square Holdings trades on European stock exchanges with $14 billion plus total assets and returned 27% in 2023. While its discount to net asset value has narrowed from 2020’s record high, it still hovers around 27%. %.
Earlier this month, Ackman said he wanted to start a new fund with a similar structure called Pershing Square USA for retail investors.