Billionaire Bill Ackman postponed Pershing Square USA's IPO on July 26, 2024.
Pershing Square USA is a closed-end investment company that aims to invest in 12 to 24 large-cap investment-grade companies in North America.
The fundraising target was reduced from $25 billion to between $2.5 billion and $4 billion due to difficulties in raising funds.
The IPO delay raises questions about the size and timing of future fundraising efforts for Pershing Square Capital Management.
Billionaire Bill Ackman, the renowned hedge fund manager, announced the postponement of Pershing Square USA's initial public offering (IPO) on July 26, 2024. The IPO was expected to price and trade on Monday but has been delayed until an unannounced date. Ackman reduced the fundraising target from $25 billion to between $2.5 billion and $4 billion due to difficulties in raising funds.
According to sources, Ackman could not raise more than $1 billion from investors before the IPO, making it difficult for him to meet his initial fundraising goal. The delay comes after Pershing Square USA filed a notice with the Securities and Exchange Commission (SEC) on July 24.
Pershing Square USA is a closed-end investment company that aims to invest in 12 to 24 large-cap investment-grade companies in North America. Most of Pershing Square's capital is held in its European closed-end fund, Pershing Square Holdings. The IPO was expected to raise between $2.5 billion and $4 billion for the US fund.
Despite the delay, Ackman remains optimistic about the future of his investment firm and plans to proceed with the IPO once market conditions improve.
The postponement of Pershing Square USA's IPO is not unexpected given recent market volatility. However, it may impact investor sentiment towards Ackman and his investment strategies. The delay also raises questions about the size and timing of future fundraising efforts for Pershing Square Capital Management.
Sources:
Bloomberg News
CNBC
The New York Stock Exchange
Bill Ackman's hedge fund, Pershing Square USA Ltd., asked investors to ignore his comments in a regulatory prospectus ahead of a planned initial public offering.
Pershing Square USA’s regulatory filing warned that potential loss of Ackman could have a ‘material adverse effect’ on its financial performance and trading price.
Shares in Pershing Square USA do not confer ownership in Ackman’s hedge fund, Pershing Square LP, nor in Pershing Square Holdings Ltd.
Ackman's own investment firm, Pershing Square Capital Management, plans to invest $500 million in the fund which would be locked up for a period of 10 years.
The fund aims to focus on 12 to 15 different companies with fortress balance sheets and strategic moats.
Ackman will not impose any performance fees and will only apply a management fee of 2% which he plans to waive for the first 12 months.
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The author uses inflammatory rhetoric by stating 'It’s not every day that a firm tells shareholders to disavow any and all comments from its parent company’s largest shareholder and CEO.' This is an appeal to emotion and creates a sensationalized narrative. The author also quotes the company's regulatory filing, which corrects statements made by Ackman that did not correspond to previous statements approved by regulators. This is an example of a fallacy called 'Misrepresentation of Words'.
>It’s not every day that a firm tells shareholders to disavow any and all comments from its parent company’s largest shareholder and CEO.<
The Company specifically disclaims the statements made by Mr. Ackman.
He argued among other things that PSUS could achieve a ‘sustained premium’ to its net asset value in his belief—a big no-no since it had warned potential investors subscribing to the IPO that funds like itself frequently trade at a discount from their net asset value.
