Bill Ackman has lined up a few large investors for his new publicly traded fund, Pershing Square USA. But he now expects to raise a fraction of the $25 billion that was floated when he announced the fund several weeks ago and he is pressing potential investors to be “helpful” and sign up for the deal — “the sooner the better.”
Ackman has been on a road show for the initial public offering of the U.S. closed-end vehicle since early July, and he has managed to land a few big institutional investors, including Baupost Group (which was also an anchor investor in his since-liquidated special purpose acquisition company), Putnam Investments, and the Teacher Retirement System of Texas. Ackman disclosed those names in a letter he sent to potential investors that was filed with the Securities and Exchange Commission on Thursday. In it, he said that the offering would likely raise only $2.5 billion to $4 billion and asked other investors to pony up. The IPO is set to price on Monday.
Part of the pitch for such a huge investment fund — originally purported to be the largest such IPO in U.S. history — was the massive following Ackman now has on X, where he has 1.3 million followers. Theoretically that could result in masses of new retail investors buying shares of Pershing Square USA once it begins trading on the open market, boosting the gains for those who get in on the IPO.
But Ackman has also recently become an increasingly polarizing figure on X, where he recently endorsed Donald Trump for president immediately after the assassination attempt on the former President’s life. Ackman subsequently questioned whether President Joe Biden had actually signed his letter of resignation last Sunday and wrote: “If I were China, I would invade Taiwan tomorrow.”
In addition to occurring during a particularly turbulent period in American politics, the road show also coincided with an unsettled few weeks in the stock market and at a time when Ackman’s publicly traded hedge fund has been underperforming, as Institutional Investor previously was the first to report. Pershing Square Holdings gained 0.7 percent in July through Wednesday, leaving it up only 6.4 percent for the year. Even after a sharp pullback, the S&P 500 has gained 13.2 percent this year.
In the letter, in which Ackman touted his big investors, he asked others to place their orders soon.
“The $25 billion number in the media initially anchored investors in thinking the deal would be too large,” he said. “Ultimately, I expect this ‘anchoring’ to be helpful to the final outcome.”
He said the fund will have a hard cap of $10 billion, which he believes may encourage “market participants concerned that they will miss the deal if they don’t put their order in quickly.”
Ackman said that an IPO is momentum driven and “In short, this is a moment when you can be very helpful to Pershing Square by participating in the PSUS [Pershing Square USA] offering and giving your order to the banks, the sooner the better.”
Ackman did not return a call for comment.
