Bill Ackman abruptly withdraws Pershing Square US Fund IPO

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Bill Ackman has withdrawn plans to take closed-end fund Pershing Square USA public, a dramatic about-face for the billionaire investor who just months ago predicted it would be one of the largest initial public offerings ever.

The fiasco of the proposed IPO marks the end of a dramatic run for the billionaire hedge fund manager, who in recent months shot to social media fame and became one of the best-known investors in the United States.

Ackerman He envisioned the company becoming like Warren Buffett’s Berkshire Hathaway: a cornerstone of the public markets and a component of the S&P 500. He hoped the company would attract investors like the Oracle of Omaha, with events that draw thousands of investors each year. But demand for the IPO didn’t materialize the way he and the bankers tasked with taking it public had expected.

The new investment vehicle was initially expected to price on the New York Stock Exchange as early as this week, but Ackerman tried to drum up interest in a letter to investors of his hedge fund, Pershing Square Capital, last Wednesday.

This letter later Disclosure in regulatory filingsand the company took the unusual move of denying the validity of the note.

After a challenging week, Hedge Fund billionaire as the listing’s fundraising target was cut to $2 billion from $25 billion and a key investor withdrew.

While he said the company has received “a lot of investor interest in the listing,” in meetings in recent weeks, Ackman, founder and CEO of Pershing Square Capital Management, assessed whether investors “should wait until the aftermarket to invest, rather than the IPO.”

“This issue prompted us to re-evaluate the structure of the PSUS so that Initial Public Offering “My investment decisions are simple,” Ackman said in a statement on Wednesday.

In recent weeks, potential investors have worried that Ackman’s new fund could trade at a discount to the net assets it holds after its initial public offering, an issue that has dogged his London- and Amsterdam-listed fund company, Pershing Square Holdings. It’s a unique problem for closed-end funds because they can be publicly traded but shares can’t be easily converted into cash like regular funds.

Pershing Square declined to provide further comment.

“It’s very unusual,” said one banker involved in the deal. “To his credit, Bill tried to do something very different, but it clearly didn’t work out the way he wanted. I’m sure he’ll consider other things and other ways to accomplish this.”

In a letter to investors last week, Ackman said Boston hedge fund Baupost Group had committed $150 million in financing for the company and the Teacher Retirement System of Texas had committed $60 million. Baupost withdrew its support for the IPO after the letter was made public.

Banks typically use cornerstone investors to signal strong demand for IPOs and signal a favorable trading environment. Cornerstone investors rarely exit on the eve of a listing, and Baupost’s decision to sit out could undermine Pershing Square’s ability to market to other potential backers.

Ackman has been in the public eye before. He lost money shorting multi-level marketing company Herbalife, betting about $1 billion that the company’s stock price would plummet. When hedge fund giants Carl Icahn and Dan Loeb joined the bet and increased their stake in the company, Ackman suffered a painful squeeze.

Pershing Square also lost more than 80% of its investment in Valeant Pharmaceuticals — which Ackman called “the worst investment in the history of the firm.” Ackman said in a video of Pershing Square’s U.S. IPO roadshow that the two failed investments caused the hedge fund’s portfolio value to fall by more than 30%.

“The open market was short the stocks we owned and long the stocks we were short,” he said.

Pershing Square Holdings has performed even better in recent years, with a five-year return of 183.8% through June 30.

Ackman has big plans for Pershing Square USA. In addition to investing in large, public companies that he believes are undervalued, he plans to become a cornerstone shareholder in companies that are about to go public, using the permanent capital provided by the closed-end fund structure.

In recent months, Ackman has taken to social media aggressively, regularly posting political views on X and endorsing Republican presidential candidate Donald Trump last month. For investors, he touted his online fame as a potential benefit to a public listing, especially for retail investors who otherwise wouldn’t be able to reap Pershing Square’s returns.