Bill Ackman’s IPO of closed-end fund Pershing Square postponed: NYSE

Billionaire investor Bill Ackman is postponing the highly scrutinized listing of Pershing Square’s US closed-end fund, reports say a message on the New York Stock Exchange website.

The initial public offering of Pershing Square USA Ltd., with the ticker PSUS, has been postponed to a date to be determined, the website said. Ackman now wants to raise $2.5 billion to $4 billion for the fund, well short of the $25 billion target set a few weeks ago a regulatory filing dated Thursday.

Pershing Square declined to comment further. The company has issued a statement “to clarify press reports” saying it is moving ahead with its initial public offering “with the pricing date yet to be announced.”

Closed-end funds sell a certain number of shares during their initial public offering, and after their debut they trade on market exchanges. The price of the fund does not necessarily reflect the intrinsic value of the shares, so the fund may trade at a premium or a discount.

“There is tremendous sensitivity to the size of the transaction,” Ackman said in a July 24 letter to investors included in the filing. “Especially in light of the novelty of the structure and the very negative trading history of closed-end funds, it will require a significant leap of faith and ultimately careful analysis and judgment for investors to recognize that this closed-end company will will trade a premium, while very few people in history have done so.”

Pershing Square had $18.7 billion in assets under management at the end of June. Most of the capital is in Pershing Square Holdings, a $15 billion closed-end fund trading in Europe. Ackman is trying to offer 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.

The public listing of Ackman’s fund is seen as an effort to grow 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 listed one closed fund is expected to invest in 12 to 24 large-cap, investment-grade, “sustainable growth” companies in North America.

In the roadshow presentation he made public, Ackman highlighted the challenge of managing traditional hedge funds that investors can withdraw their money from at any time, which can result in consistent fundraising and reassure investors. The advantage of managing permanent capital is that it makes him more focused on the portfolio and gives him the opportunity 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 significant. Action can have a significant negative impact on one’s returns,” Ackman said.

– CNBC’s Leslie Picker contributed reporting.