Billionaire investor Bill Ackman has delayed the initial public offering (IPO) of Pershing Square’s U.S. closed-end fund, according to a notice on the New York Stock Exchange’s website. The listing of Pershing Square USA Ltd., ticker symbol PSUS, was initially planned for this week but has been pushed back to an unspecified date. Sources familiar with the matter suggest the IPO might be priced next week.
Ackman now aims to raise between $2.5 billion and $4 billion for the fund, a significant reduction from the original $25 billion target mentioned weeks earlier. Closed-end funds, like the one Ackman plans to list, issue a fixed number of shares during their IPO, which then trade on stock exchanges. The trading price can differ from the fund’s net asset value, sometimes leading to shares being priced at a premium or a discount.
In a recent letter to investors, Ackman acknowledged the challenges of the IPO, citing the novelty of the fund structure and the historically poor trading performance of similar closed-end funds. “There is enormous sensitivity to the size of the transaction,” Ackman noted, emphasizing the importance of careful analysis and judgment for investors considering the fund.
Pershing Square manages $18.7 billion in assets, with most of its capital in Pershing Square Holdings, a $15 billion closed-end fund that trades in Europe. Ackman’s new fund aims to follow a similar model but will be listed on the New York Stock Exchange. This move could set the stage for an eventual IPO of Ackman’s management company.
Ackman has gained a significant following on social media platform X, where he discusses various topics, including social issues and financial markets. The new closed-end fund is expected to invest in 12 to 24 large-cap, investment-grade companies in North America, focusing on “durable growth.”
In a roadshow presentation, Ackman emphasized the benefits of managing permanent capital, which allows for a long-term investment approach. He highlighted the challenges of traditional hedge funds, where investors can withdraw their money at any time, leading to constant fundraising efforts.
The delay and adjustments in the IPO plan reflect the complexities and investor skepticism surrounding new financial products in a volatile market. However, Ackman’s reputation and strategic approach may still attract substantial interest from both retail and institutional investors.
