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Billionaire investor Bill Ackman is delaying the closely scrutinized U.S. listing of his Pershing Square closed-end fund, according to a notice on the New York Stock Exchange’s website.
The initial public offering of Pershing Square USA Inc. (PSUS) has been delayed to a date to be announced, according to the website. Ackman now hopes to raise $2.5 billion to $4 billion for the fund, according to a regulatory filing Thursday, well below the $25 billion target he had set a few weeks ago.
Pershing Square declined to comment further. The company issued a statement “clarifying media reports” that it is pursuing an IPO and that “the pricing date will be announced soon.”
Closed-end funds sell a fixed number of shares during the IPO and are listed on a market exchange after the IPO. 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.
“Transaction size is extremely sensitive,” Ackman said in a July 24 letter to investors that was included in the filing. “Especially given the novelty of the closed-end fund structure and the very negative trading history, it would require a significant leap of faith and ultimately careful analysis and judgment on the part of investors to recognize that this closed-end company would trade at a premium to its IPO, something that historically has rarely been done.”
Pershing Square had $18.7 billion in assets under management as of the end of June. The bulk of its holdings are in Pershing Square Holdings, a $15 billion closed-end fund listed in Europe. Ackman is seeking to list a similar closed-end fund on the New York Stock Exchange, a move that could pave the way for an initial public offering of the company he manages.
Taking Ackman’s fund public is seen as a move to capitalize on his popularity among mainstream investors after he amassed more than 1 million followers on social media platform X, commenting on topics ranging from anti-Semitism to the presidential election. The publicly traded closed-end fund is expected to invest in 12 to 24 large, investment-grade “sustainable growth” companies in North America.
In a public roadshow presentation, Ackman highlighted the challenges of running a traditional hedge fund, which offers ongoing fundraising and investor reassurance, as investors can withdraw their money at any time. The advantage of managing permanent capital is that it allows you to focus more on the portfolio and allows you to take a long-term investment approach.
“If you want to be a long-term investor in companies, the challenge of managing a portfolio where money can move in and out is enormous. That action could have a significant negative impact on returns,” Ackman said.
— CNBC reporter Leslie Picker contributed reporting.
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