By Svea Herbst-Bayliss
(Reuters) - Billionaire investor Bill Ackman on Wednesday scrapped the planned launch of his new U.S. listed fund, days before Pershing Square USA was slated to begin trading on the New York Stock Exchange.
On Tuesday, Ackman downsized the initial public offering plans for the second time in a week, The launch has seen at least one prominent pledged investor back out while requiring fresh regulatory scrutiny.
On social media platform X, where Ackman has 1.3 million followers, the investor released a four-paragraph statement saying he and his team had reevaluated the new fund's structure.
"We will report back once we are ready to launch a revised transaction," he wrote. A spokesman for Ackman had no additional comment beyond the statement.
When he unveiled plans in February to offer a cheaper fund that mimics the investments of his hedge fund for U.S. based investors, speculation mounted that the IPO could raise as much as $25 billion in assets.
This would have more than doubled the $19 billion in assets Ackman's New York-based Pershing Square Capital Management oversees right now, making it one of the biggest IPOs in years. But it also sparked concern among potential investors about the fund's structure, where the new cash would be invested at a time the market was storming higher, and who would be doing the investing.
By last week, Ackman dramatically scaled back the outlook for the raise, telling investors in his management company that it would be capped at $10 billion. By this Tuesday, Ackman said he expected to raise around $2 billion in assets.
"While we have received enormous investor interest in (Pershing Square USA) PSUS, one principal question has remained. Would investors be better served waiting to invest in the aftermarket than in the IPO?," Ackman wrote on Wednesday.
Ackman said he has held nearly 100 meetings with top hedge and mutual funds and there had been considerable interest in the new vehicle, the first he planned to launch since raising $2.9 billion for Pershing Square Holdings a closed-end fund that was listed in Amsterdam a decade ago.
But he acknowledged the structure of the fund raised concerns because these kinds of vehicles often trade at a discount or premium to the assets held in the fund. He said his firm committed $500 million as an anchor investment to what he is calling a U.S.-listed investment holding company.
Last week Ackman wrote that investors including hedge fund Baupost Group had pledged to put money in. But Baupost, run by Seth Klarman and noted for staying out of the headlines, said that now it would not buy into the fund. Some said Baupost's exit might have pressured other investors to stop short.
The letter, which Ackman had expected to remain private, had to be filed with regulators, a move that caused an initial delay moving the start of trading from this week to next week. Ackman had expected to ring the bell to start trading at the exchange next week.
(Reporting by Svea Herbst-Bayliss in Boston and Arasu Kannagi Basil in Bengaluru; Editing by Sriraj Kalluvila)
Most Popular
Comments / 0