Billionaire Bill Ackman said Tuesday he will raise about $2 billion for his new portfolio, just a fraction of the $25 billion the hedge fund manager was initially seeking to raise.
Pershing Square USA, Ackman’s first new investment vehicle in a decade, plans to sell up to 40 million shares at $50 apiece.
The company is expected to begin trading on the New York Stock Exchange next Tuesday under the ticker symbol PSUS, a person familiar with the matter said Tuesday.
The new venture, originally scheduled to launch this week, will be a closed-end fund, meaning shareholders can only withdraw their shares if someone else buys them.
Institutional investors have until Friday to express interest, while retail investors have until July 24 to do so.
The company said underwriters, including Citigroup Global Markets Inc., UBS Securities Inc., Banc of America Securities Inc. and Jefferies Inc., have been granted an option to purchase an additional 6 million shares at the IPO price.
If the 45-day option is exercised, it would add another $300 million to the fund.
Ackman’s firm, Pershing Square Capital Management, has invested $500 million in the new investment holding company, the hedge fund manager said in a presentation earlier this month.
Ackman did not respond to The Washington Post’s request for comment.
Raising roughly $2 billion in closed-end fund structures is a significant amount, given that no new closed-end funds were raised last year and just six the year before that, according to industry data.
The cash amount is more than double the $19 billion in assets Ackman already manages, increasing the pressure to find new winning investments to continue his strong track record.
By last week, Mr. Ackman had sensed growing anxiety among potential investors about the closed-end fund’s structure and how so much money was being invested.
In a letter to holders of shares in his management company last Wednesday, Ackman said he would cap the offering at $10 billion and expect to raise $2.5 billion to $4 billion in new capital.
The letter, later made public in an SEC filing, named Baupost ($150 million), Putnam Investments ($40 million) and the Texas Teachers Retirement System ($60 million) as potential investors.
In his letter, Mr. Ackman said he believed the new fund could raise as much as $4 billion, with a $10 billion cap on the offering, and called on investors in Pershing Square’s management company to back the fund.
He said that would help “strengthen the power of our initial message to the market tomorrow on the size of the deal.”
On Monday, Boston-based Baupost, led by Seth Klarman, withdrew from its IPO. Bloomberg reported.
Ackman said the fund would acquire and hold 12 to 15 large, investment-grade, free-cash-flow generating, undervalued companies in North America.
A prolific investor with a large social media following, Ackman is one of the best-known figures in the hedge fund industry. He frequently speaks out on a range of topics from political infighting to higher education on his X account.
Earlier this year, he led a campaign to criticize Harvard University following a furor over practices related to anti-Semitism, plagiarism and financial management.
Ackman’s fund has returned 16.5% for the year.
The 58-year-old, who has a net worth of $9.1 billion according to Forbes magazine and endorsed former President Donald Trump shortly after he was shot, recently sold shares in the company, which has a market capitalization of more than $10 billion.
He came to prominence in 2012 when the supplement company Herbalife faced a $1 billion capital shortfall and rival activist Carl Icahn took an opposing stance on the company’s future.
The following year, the two had an infamous live CNBC altercation over the matter.
With post wire
