Bill Ackman, Founder and CEO of Pershing Square Capital Management.
Adam Jeffrey | CNBC
Billionaire investor Bill Ackman has decided to postpone the U.S. listing of his Pershing Square closed-end fund, which has been under intense scrutiny, according to a notice on the New York Stock Exchange website.
The initial public offering of Pershing Square USA Ltd., which has the ticker symbol PSUS, has been postponed to a date to be announced, according to the website. Ackman is now seeking to raise between $2.5 billion and $4 billion for the fund, well below the $25 billion target he set a few weeks ago, according to a regulatory filing dated Thursday.
Pershing Square declined to comment. The company issued a statement “to clarify press reports,” saying it would move forward with its IPO “with a pricing date to be announced.”
Closed-end funds sell a set number of shares during their initial public offering, and trade on exchanges after their debut. The fund's price does not necessarily match 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 deal,” Ackman said in a July 24 letter to investors, which was included in the filing. “Especially given the novelty of the structure and the extremely negative trading history of closed-end funds, it would require a significant leap of faith and ultimately careful analysis and judgment for investors to realize that this closed-end company would trade at a higher price after its IPO, when few in history have done so.”
Pershing Square had $18.7 billion in assets under management at the end of June. Most of the firm’s capital is in Pershing Square Holdings, a $15 billion closed-end fund traded in Europe. Ackman is seeking to launch a similar closed-end fund listed on the New York Stock Exchange, a move that could pave the way for an initial public offering of his management company.
Ackman’s IPO 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. The publicly traded closed-end fund is expected to invest in 12 to 24 large-cap, investment-grade, “sustainable growth” companies in North America.
In his presentation to the audience, Ackman highlighted the challenge of running traditional hedge funds that investors can withdraw their money from at any time, which can lead to ongoing fundraising and investor appeasement. The advantage of permanent capital management is that it makes him more focused on the portfolio and gives him the ability to take a long-term approach to investments.
“If you want to be a long-term investor in companies, the challenge of managing a portfolio where money can come and go is huge. Action can have a significant negative impact on one’s returns,” Ackman said.
— CNBC's Leslie Baker contributed to this report.
