Bill Ackman Unexpectedly Pulls IPO Of Pershing Square USA Fund

First it was supposed to be $25 billion, then $10 billion, then $2 billion… and now it’s gone.

Bill Ackman, the suddenly outspoken red-pilled asset manager who has been blasting Biden relentlessly for much of 2024, has withdrawn the proposed public listing for closed-end fund Pershing Square USA in a huge about-face for the billionaire investor who just months ago predicted it would be among the largest initial public offerings ever, the FT reported.

The new investment vehicle was initially expected to price on the New York Stock Exchange as early as this week, but was postponed after Ackman tried to drum up interest in a letter last Wednesday to investors in his hedge fund, Pershing Square Capital.

The letter was later disclosed in a regulatory filing, and in an unusual move, the company disclaimed the note.

The announcement comes after a challenging week for the hedge fund billionaire, as the float’s fundraising target dropped from $25bn to $2bn and a crucial investor – value investor Seth Klarman, who clearly does not share Ackman’s redpilled views – backed out.

While the company has received “enormous investor interest” in the listing, during meetings in recent weeks, Ackman, the founder and chief executive of Pershing Square Capital Management, was prompted to evaluate whether investors would be “better served waiting to invest in the aftermarket than in the IPO”.

“This question has inspired us to re-evaluate PSUS’s structure to make the IPO investment decision a straightforward one,” Ackman said in a statement on Wednesday.

“This is not normal,” one banker involved in the deal told the FT. “To Bill’s credit he was trying to do something very different and obviously it didn’t come together the way he wanted here. I’m sure he’ll consider other things and other ways to do it.”

In the letter to investors last week, Ackman said the listing had received a $150 million commitment from Boston-based hedge fund Baupost Group and $60mn from the Teachers Retirement System of Texas. But just a few days after the letter was publicly disclosed, Baupost said it would not be backing the listing, perhaps ashamed of its association with Ackman.

Banks often use anchor investors to signal strong levels of demand in an IPO, as well as indicate a receptive after-market trading environment. It is rare for an anchor investor to bow out on the cusp of a flotation, and Baupost’s decision to stay on the sidelines would have undercut their pitch to other possible backers.

Ackman has embraced social media in recent months, regularly posting political opinions on platform X. To investors, he touted his online “notoriety” as a potential boon for the public listing, especially among retail investors who would not otherwise have access to Pershing Square’s returns.