Bill Ackman, founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC
Billionaire investor Bill Ackman is reportedly delaying the listing of his heavily scrutinized Pershing Square U.S. closed-end fund. Notice on the New York Stock Exchange website.
The initial public offering of Pershing Square USA Inc., with the ticker symbol PSUS, has been postponed until the announcement date, according to its website. Ackman is now seeking to raise between $2.5 billion and $4 billion for the fund, well below the $25 billion target he set just a few weeks ago. A regulatory filing was filed Thursday.
Pershing Square declined to comment further. statement “To clarify reports,” the company said in a statement that it was moving forward with its initial public offering and that “a pricing date will be announced.”
Closed-end funds sell a set number of shares at their IPO and then trade on a market exchange after their debut. The price of the fund does not necessarily match the net asset value of the shares, so the fund may trade at a premium or discount.
“There is great sensitivity to the size of the transaction,” Ackman wrote in a July 24 letter to investors that was included in the filing. “In particular, given the novelty of this structure and the very negative trading history of closed-end funds, it will require a great deal of faith and ultimately careful analysis and judgment for investors to perceive this closed-end company as likely to trade at a premium following an IPO, something that has rarely happened before in history.”
Pershing Square had $18.7 billion in assets under management as of the end of June, with most of the money invested in a $15 billion closed-end fund traded in Europe, Pershing Square Holdings Ltd. Mr. Ackman is seeking to offer a similar closed-end fund to trade on the New York Stock Exchange, which could pave the way for an IPO for his firm.
The listing of Mr. Ackman’s fund is seen as a move to show support to Main Street investors from Mr. Ackman, who has gained more than 1 million followers on the social media platform X, where he comments on a range of issues from anti-Semitism to the presidential election. Closed-end funds The fund plans to invest in 12 to 24 large investment-grade “sustainable growth” companies in North America.
In his public Roadshow presentation, Ackman highlighted the difficulties of running a traditional hedge fund, where investors can withdraw their money at any time, which he said could lead to continued fundraising and investor comfort. The advantage of running a permanent fund is that it allows for more focus in the portfolio and a longer-term approach to investing.
“If you want to invest in companies for the long term, managing a portfolio where money can flow in and out is a big challenge. Actions can have a big negative impact on returns,” Ackman said.
—CNBC’s Leslie Picker contributed reporting.
