The Delay of Bill Ackman’s Pershing Square USA Ltd. IPO

Billionaire investor Bill Ackman has decided to postpone the highly anticipated listing of Pershing Square’s U.S. closed-end fund, Pershing Square USA Ltd. The New York Stock Exchange’s website issued a notice stating that the initial public offering (IPO) of the fund with the ticker PSUS has been delayed until further notice. Ackman had initially aimed to raise between $2.5 billion to $4 billion for the fund, which is significantly lower than the previously targeted $25 billion, as indicated in a regulatory filing dated Thursday.

Reasons for Postponement

Ackman’s decision to delay the IPO of Pershing Square USA Ltd. may have been influenced by various factors. There seems to be uncertainty surrounding the size of the transaction, as indicated in a letter to investors dated July 24. Ackman expressed concerns about the historical negative trading performance of closed-end funds, suggesting that investors may need to have faith in the new structure and carefully analyze and judge the potential outcomes of investing in the fund.

The postponement of the IPO poses a challenge for Ackman and his firm, Pershing Square. The company currently manages $18.7 billion in assets, with a significant portion invested in Pershing Square Holdings, a closed-end fund valued at $15 billion and traded in Europe. The planned listing of Pershing Square USA Ltd. on the New York Stock Exchange was expected to attract Main Street investors and pave the way for an IPO of Ackman’s management company. However, the delay in the IPO may hinder these plans and impact Ackman’s ability to leverage his social media following to promote the fund.

Ackman’s closed-end fund was expected to focus on investing in 12 to 24 large-cap, investment-grade companies with a focus on “durable growth” in North America. In a public presentation, Ackman emphasized the advantage of managing permanent capital, which allows for a long-term approach to investments. Unlike traditional hedge funds, where investors can withdraw their funds at any time, managing permanent capital enables Ackman to stay focused on the portfolio without the constant need for fundraising and reassuring investors.

The delay of Bill Ackman’s Pershing Square USA Ltd. IPO raises questions about the future of the fund and its potential impact on Ackman’s investment strategy. Ackman’s decision to postpone the listing may have been influenced by concerns about investor confidence, market conditions, and the overall viability of the fund. As Ackman navigates these challenges, it remains to be seen how the delayed IPO will affect his firm’s growth, investor relations, and long-term investment objectives.