Prominent billionaire hedge fund manager and Universal Music Group director Bill Ackman is moving forward with plans to de-list his investment entity, Pershing Square Holdings, from the Euronext Amsterdam exchange. This strategic decision aligns with Ackman’s advocacy for a similar de-listing for Universal Music Group, in which his firm has held approximately 10% of the stock since 2021. By focusing on this de-listing, Ackman aims to streamline operations and enhance shareholder value, which could result in more efficient trading and a greater focus on the company’s core activities.

Following thorough review and approval, the Euronext Amsterdam has sanctioned the de-listing plan for Pershing Square Holdings, with the last trading day scheduled for January 30. This pivotal change will consolidate trading activities to the London Stock Exchange, where Pershing Square has been co-listed since 2017 and where it primarily conducts the majority of its trading. This strategic shift aims to foster a more robust trading environment and potentially improve liquidity for investors, indicating a calculated move towards optimizing financial performance.

Bill Ackman, alongside his family, possesses over 20% ownership in Pershing Square Holdings. In November, he strongly advocated for relocating both the fund and Universal Music Group’s listings from the primary Dutch stock exchange. This recommendation came in the wake of a distressing incident involving the assault of fans of an Israeli soccer team in Amsterdam, highlighting the importance of safety and stability in investment environments. Ackman’s proactive stance reflects his commitment to safeguarding shareholder interests amid evolving geopolitical landscapes.

At that time, Universal Music Group indicated its intention to conduct a comprehensive review to determine the best course of action that aligns with the interests of all shareholders. This decision underscores UMG’s commitment to corporate governance and responsiveness to the concerns of its investors, showcasing an approach that prioritizes shareholder engagement and transparency in navigating market challenges.

In a related announcement on Thursday, Pershing Square disclosed the distribution of approximately 47 million shares of Universal Music Group stock, accounting for about 2.6% of its total stake. This action is part of a premeditated winding down of one of the funds initially utilized by Pershing Square to acquire UMG shares from Vivendi back in September 2021. Such a move illustrates Pershing Square’s strategic approach to managing its investments and optimizing shareholder returns as it recalibrates its portfolio.

Pershing Square has opted to distribute the UMG stock rather than liquidating it, expressing a belief that the current valuation of UMG shares is significantly undervalued. According to the firm, this tax-free stock distribution allows limited partners to maintain ownership of UMG shares while potentially benefiting from future appreciation in value. This decision highlights Pershing Square’s confidence in UMG’s long-term performance and their commitment to maximizing value for their investors.

Currently, Pershing Square retains around 140 million shares in Universal Music Group, representing a 7.6% stake through its principal funds—Pershing Square Holdings, Ltd., Pershing Square, L.P., and Pershing Square International, Ltd. The statement indicates that Bill Ackman, along with Pershing Square employees and other affiliates, continues to maintain significant investment in UMG, which remains the firm’s largest single holding, thereby reinforcing its strategic focus on this major player in the music industry.

As of December 31, Pershing Square reported that Universal Music Group has generated a commendable total return of 46%, which includes dividends over the investment period of approximately three years and three months. This performance surpasses the S&P 500’s return of 37% and the Amsterdam Exchange Index’s return of 21% for the same timeframe. This impressive return highlights the robust performance of UMG and reinforces Pershing Square’s investment thesis centered around the growth potential of leading companies in the music sector.