Bill Ackman wants another shot at shaking up IPOs

BILL ACKMANIPOSPARCSPACSPACIPOSPARCSPACSPARCSPAC is hunting for deals. The boss of Pershing Square, a hedge fund, is on the lookout for “large private growth companies” which are seeking to raise $1.5bn or more, but are wary of the “risks and expenses” of a conventional initial public offering (). His solution: a special-purpose acquisition-rights company, or . On September 29th regulators approved the novel investment vehicle, which Mr Ackman bills as a fairer, cheaper alternative to its tainted cousin, the special-purpose acquisition company (), which enjoyed a boom in 2021.There is much to like about this financial innovation. First, unlike s, which raise a pot of money via an and then scour the market for potential targets, the will find a merger candidate first. Helpfully, Mr Ackman has more time to make the deal—ten years, compared with two years for s. He has also lined up potential investors: Pershing Square has granted rights at no cost to shareholders of its previously disbanded . Pershing Square itself can retain up to 5% of the new company.