Pershing Square Capital partner Paul Hilal is leaving the activist hedge fund to launch his own venture, Bill Ackman wrote at the end of his fourth quarter investment letter.
Hilal, who roomed with Ackman at Harvard, has been with Pershing Square since January 2006. Aside from Ackman, he’s the most senior person at the fund.
Ackman said they had discussed Hilal transitioning to his own venture about two years ago.
“Paul is now ready to do his own thing and I expect him to be a great success. Whatever he decides to do, I encourage you to give him a close look.,” Ackman wrote.
The letter didn’t specify what exactly Hilal’s next move would be though it did hint that they may invest together.
“Whatever he decides to do, I encourage you to give him a close look. As we have with both Mick [McGuire] and Scott [Ferguson], we expect to partner on some new investment in the future with Paul and we look forward to that day,” Ackman wrote.
McGuire and Ferguson are both former Pershing Square alums who went on to launch their own hedge funds.
Here’s the excerpt from the letter:
Paul Hilal joined Pershing Square initially as a consultant in early 2006 and then full time in 2007. We started slowly because we didn’t know how things would work because Paul’s focus prior to Pershing Square was technology, and we had never made a technology investment. More significantly, Paul and I had known each other for many years having roomed together in college, and having stood by each other’s side at our respective weddings. We knew that it can be difficult for close friends to work for and even partner with the other. We both thought our arrangement could last three to five years and possibly more if things worked out.
This January marks a full decade of Paul’s commitment to the firm. He has been a great member of the team, and an important contributor to the firm’s success. Paul is perhaps best known internally for his extremely deep research into companies and industries which have enabled us to broaden our investment universe. Beyond Paul’s contributions and insights as a member of the investment team, has been his design and oversight of our analyst recruitment process that has brought us tremendous talent including Brian Welch, Anthony Massaro and Charles Korn.
While Pershing Square has been a great training environment for all of us including Paul, because we are a “one-product” and one portfolio firm, there is no opportunity for a more senior member of the team to manage his own portfolio while being at Pershing Square until I step aside from this role, which I have no plans to do. As a result, when members of the team have reached a stage where they want to manage their own portfolios, they have no choice but to leave to launch their own firm. Six years ago, Mick McGuire left to found Marcato Capital, and nearly four years ago Scott Ferguson left to form Sachem Head.
Beginning nearly two years ago, Paul and I initiated a discussion about when it might make sense for him to make the transition to pursuing his own venture. Paul is now ready to do his own thing and I expect him to be a great success. Whatever he decides to do, I encourage you to give him a close look. As we have with both Mick and Scott, we expect to partner on some new investment in the future with Paul and we look forward to that day.
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