The New York Stock Exchange (NYSE) announced on Friday that the debut of Bill Ackman’s new U.S. fund, Pershing Square USA, has been postponed. Originally scheduled for pricing on Monday, the initial public offering (IPO) now awaits a rescheduled date. The exchange’s brief statement did not provide a specific reason for the delay.
Ackman’s firm has confirmed that the IPO is still progressing, with the date for pricing expected to be set either later next week or the week after. In a statement, the firm reiterated that Pershing Square USA is moving forward with its IPO, though it did not elaborate on the reasons behind the delay.
Changes in Fundraising Plans
The delay adds to the complexities surrounding Pershing Square USA’s launch. Just days prior to the delay announcement, Ackman had informed his investors of significant changes in the fundraising plan. Initially, the fund was expected to raise up to $25 billion, which would have more than doubled Ackman’s assets under management. However, this target has been drastically reduced.
Ackman’s revised plan now caps the fundraising at $10 billion, with expectations to raise between $2.5 billion and $4 billion. This reduction was detailed in a letter Ackman sent to investors, which was initially intended to remain private but was later disclosed through a Securities and Exchange Commission (SEC) filing.
Investor Concerns and Adjustments
The scaled-back fundraising has raised questions and concerns among potential investors. Ackman’s firm has acknowledged these issues, including questions about the fund’s structure, the timeline for deploying capital, and the team responsible for managing the investments. Despite these concerns, Ackman has received commitments from notable investors, including one large pension fund and a prominent mutual fund.
Ackman has been active on social media, particularly on X (formerly known as Twitter), where he shares his views on various topics. He is hopeful that retail investors will find Pershing Square USA appealing, in addition to institutional investors.
Historical Performance and Returns
Ackman’s existing hedge fund, Pershing Square Holdings, which has been in operation for a decade, has delivered a return of 6.4% since January. Ackman has emphasized the strong performance of his funds in promotional materials for the new IPO. Over its history, Pershing Square Holdings has averaged an annual return of 16.5%. He claims that if Pershing Square USA had been in existence in its current form, it would have achieved a 19.4% annual return, outperforming the S&P 500 by 9.3 percentage points per year.
For the past 6.5 years, the fund would have returned 31%, further highlighting its robust performance track record. These figures were presented in a video aimed at attracting investors to the new fund.
Conclusion
The delay of Bill Ackman’s Pershing Square USA IPO reflects a series of adjustments and challenges facing the high-profile hedge fund manager. With the fund’s launch now postponed and fundraising targets significantly reduced, both Ackman and potential investors will be closely watching for updates. The adjustments in fundraising and the delayed IPO highlight the complexities of launching a new fund in the current market environment, where investor sentiment and market conditions can significantly impact the timing and success of such ventures.