Bill Ackman, founder and CEO of Pershing Square Capital Management;
Adam Jeffery | CNBC
Billionaire investor Bill Ackman is delaying Pershing Square’s highly scrutinized US private equity listing, according to announcement on the website of the New York Stock Exchange.
The initial public offering of Pershing Square USA Ltd., ticker PSUS, has been delayed until a date to be announced, according to the website. Ackman is now trying to raise $2.5 billion to $4 billion for the fund, well short of his $25 billion goal from a few weeks ago, according to regulatory filing dated Thursday.
Pershing Square declined to comment further. The company issued a statement “to clarify press reports,” saying it is proceeding with its initial public offering “with a pricing date to be announced.”
Closed-end funds sell a set number of shares during their IPO and trade on stock exchanges after their debut. The price of the fund does not necessarily correspond to the net asset value of the shares, so the fund may trade at a premium or discount.
“There is tremendous sensitivity to the size of the transaction,” Ackman said in a July 24 letter to investors included in the filing. “Especially in light of the novelty of the structure and the very negative trading history of closed-end funds, it takes a significant leap of faith and ultimately careful analysis and judgment for investors to recognize that this closed-end company will trade at a post-IPO premium when very few in history have done it.”
Pershing Square had $18.7 billion in assets under management at the end of June. Most of its capital is in Pershing Square Holdings, a $15 billion closed-end fund traded in Europe. Ackman is seeking to offer a similar closed-end fund listed on the New York Stock Exchange, a move that could pave the way for an IPO of his management company.
Ackman’s IPO is seen as a move to tap into Main Street investors after he amassed more than a million followers on the X social media platform, commenting on issues ranging from anti-Semitism to the presidential election. The listed on the stock exchange closed-end fund expected to invest in 12 to 24 large-cap, investment-grade, “sustainable growth” companies in North America.
In his publicized roadshow presentation, Ackman highlighted the challenge in managing traditional hedge funds that investors can withdraw their money at any time, which can result in continued fundraising and investor peace of mind. The advantage of permanent capital management is that it makes him more focused on the portfolio and enables him to take a long-term approach to investments.
“If you want to be a long-term investor in businesses, the challenge of managing a portfolio where money can come and go is significant. Action can have a significant negative impact on one’s returns,” Ackman said.
— CNBC’s Leslie Picker contributed reporting.
