Retail investors who were looking forward to investing in Bill Ackman’s proposed US closed-end fund have been disappointed as the founder and CEO of Pershing Square withdraws from his planned IPO.
The Wednesday afternoon decision to cancel the IPO for Pershing Square USA marks a significant reversal for the high-profile investor who had anticipated it to be one of the largest IPOs ever.
As of the end of June, Pershing Square managed $18.7 billion in assets, with most under Pershing Square Holdings, a closed-end fund trading in Europe.
Initially, Ackman’s new investment vehicle was slated for listing on the New York Stock Exchange this week. However, the launch was postponed after Ackman attempted to generate interest through a letter to investors in Pershing Square Capital, his hedge fund. The letter, disclosed in a regulatory filing, was later disclaimed by the company, reported the Financial Times.
Ackman's decision comes after a challenging period, during which the IPO’s fundraising target was massively scaled back from $25 billion to $2 billion, and a key investor withdrew support.
In a letter to investors, Ackman mentioned a $150 million commitment from the Boston-based hedge fund Baupost Group and $60 million from the Teachers Retirement System of Texas. But shortly after the letter was made public, Baupost retracted its support.
While he claimed the fund attracted “enormous investor interest” during recent meetings, Ackman ultimately decided to reassess the timing and structure of the offering.
“This question has inspired us to re-evaluate PSUS’s structure to make the IPO investment decision a straightforward one,” he said in a statement on Wednesday.
Ackman has recently been active on social media, using platform X to share political opinions and tout his online presence. He suggested that his social media notoriety – with an audience of more than one million followers – could be beneficial for the public listing, particularly among retail investors who typically lack access to Pershing Square's returns.
Still, that appeal apparently wasn’t enough to address a major concern repeatedly raised to him by prospective investors.
"[O]ne principal question has remained: Would investors be better served waiting to invest in the aftermarket than in the IPO?" Ackman said in his statement.
With that question in mind, Ackman said he’s going back to the drawing board, reconsidering the fund’s structure in order “to make the IPO investment decision a straightforward one.”
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