Bill Ackman’s Pershing Square fund now raising $2B for IPO — well below $25B target
Billionaire Bill Ackman said on Tuesday that his new portfolio will raise roughly $2 billion in capital — a fraction of the $25 billion the hedge fun manager had initially floated.
Pershing Square USA, Ackman’s first new investment vehicle in a decade, expects to sell up to 40 million shares priced at $50 each.
It will begin trading on the New York Stock Exchange under the symbol PSUS next Tuesday, a person familiar with the matter said on Tuesday.
The new venture, which was originally slated to launch this week, will be a closed-end fund, meaning shareholders can only pull back if someone else buys their stock.
Institutional investors have until Friday to express interest while retail investors had until July 24 to submit interest.
The company said that underwriters — including Citigroup Global Markets, UBS Securities, BofA Securities and Jefferies — have been granted an option to purchase an additional 6 million shares at the IPO price.
The 45-day option, if exercised, would add $300 million more for the fund.
Ackman’s firm Pershing Square Capital Management put $500 million into its new investment holding company, the hedge fund manager said in a presentation earlier this month.
“The banks have let investors know that the deal is already oversubscribed at $2 billion,” a source with knowledge told The Post on Tuesday.
Ackman did not respond to the Post’s request for comment.
Raising roughly $2 billion in a closed-end fund structure is considerable after no new closed-end funds were raised last year and only six were raised in the previous year, according to industry data.
That amount of cash would have more than doubled the $19 billion in assets Ackman already oversees, increasing the pressure to find new winning investments to continue his strong performance track record.
By last week, Ackman sensed potential investors’ growing unease with the closed-end fund structure and how so much capital could be invested.
In a letter to people who own a stake in his management company, Ackman said last Wednesday that he was capping the size of the offering at $10 billion and was expecting to see between $2.5 billion and $4 billion in new cash come in.
The letter, later made public in an SEC filing, named Baupost ($150 million), Putnam Investments ($40 million), and Teacher Retirement System of Texas ($60 million) as potential investors.
Ackman said in the letter that he was capping the size of the offering at $10 billion and believed his new fund could raise up to $4 billion. He urged investors in Pershing Square’s management company to rally behind it.
He said it would help “improve the strength of tomorrow’s initial message to the market on deal size.”
On Monday, Boston-based Baupost, led by Seth Klarman, opted out of the IPO, Bloomberg reported.
Ackman has said the fund will acquire and hold positions in 12 to 15 large capitalization, investment grade, free-cash-flow-generative undervalued companies in North America.
A prolific investor with a vast social media following, Ackman is one of the most public faces in the hedge fund industry. He often uses his account on X to weigh on topics ranging from political battles to higher education.
Earlier this year, he led a campaign criticizing Harvard University after turmoil over practices related to antisemitism, plagiarism and financial management.
Ackman’s fund has returned 16.5% a year.
The 58-year-old – who has a net worth of $9.1 billion, according to Forbes, and endorsed former President Donald Trump soon after he was shot – recently sold a stake in the firm that valued it at more than $10 billion.
He rose to prominence in 2012 with a disastrous $1 billion short of Herbalife, the dietary supplements firm, with rival activist Carl Icahn taking an opposite stance on the company’s future.
The pair then had an infamous row live on CNBC over the issue the following year.
With Post wires