Bill Ackman, founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC
Billionaire investor Bill Ackman is postponing the listing of his closely watched closed-end fund Pershing Square in the United States, according to announced on the New York Stock Exchange website.
The initial public offering of Pershing Square USA Ltd., with the ticker symbol PSUS, has been delayed until a date to be announced, according to the website. Ackman is now looking to raise $2.5 billion to $4 billion for the fund, well below the $25 billion target from a few weeks ago, according to a filing with the regulator on Thursday.
Pershing Square declined to comment further. The company released a statement. statement “to clarify press reports”, saying the company is proceeding with an initial public offering “with a price announcement date to be announced”.
Closed-end funds sell a set number of shares during their IPO and trade on exchanges after their debut. The fund’s price doesn’t necessarily match the net asset value of the shares, so the fund may trade at a premium or a discount.
“There is a significant sensitivity to the size of the transaction,” Ackman said in a July 24 letter to investors that was included in the filing. “Especially given the novelty of the structure and the very negative trading history of closed-end funds, it would take a significant leap of faith and ultimately careful analysis and judgment for investors to realize that this closed-end company would trade at a premium post-IPO when very few companies have historically done so.”
Pershing Square had $18.7 billion in assets under management at the end of June. The bulk of the firm’s capital is held in Pershing Square Holdings, a $15 billion closed-end fund that trades in Europe. Ackman is looking to offer a similar closed-end fund listed on the New York Stock Exchange, a move that could pave the way for IPO of his management company.
Taking Ackman’s fund public is seen as a move to capitalize on his following among Main Street investors after he amassed more than a million followers on social media platform X, commenting on issues ranging from anti-Semitism to the presidential election. closed-end fund expects to invest in 12 to 24 large-cap, investment-grade, “sustainable growth” companies in North America.
In his public roadshow presentation, Ackman highlighted the challenge of managing traditional hedge funds where investors can withdraw money at any time, which can lead to constant fundraising and appease investors. The advantage of managing fixed capital is that it allows him to focus more on the portfolio and allows him to take a long-term approach to investing.
“If you want to be a long-term investor in businesses, the challenge of managing a portfolio where money can come and go is huge. Actions can have a significant negative impact on one’s returns,” Ackman said.
— CNBC’s Leslie Picker contributed to the report.
