Bill Ackman’s Pershing Square USA calls off IPO

Pershing Square USA, the fund from billionaire hedge fund manager Bill Ackman, said Wednesday that it’s withdrawing a planned initial public offering after struggling to secure investor backing.

Ackman, who has become a vocal opponent of diversity, equity and inclusion efforts, had initially set an ambitious fundraising target of $25 billion for Pershing Square USA’s IPO. The fund’s target was lowered to $2 billion this week, and a key investor recently backed out.

In a statement, Ackman conceded that he faced questions about whether this was the right way forward while on a roadshow to whip up excitement for the IPO.

“One principal question has remained: Would investors be better served waiting to invest in the aftermarket than in the IPO?” Ackman said in a statement Wednesday, referring to the market for stock and bonds after they are originally issued.

For now, the fund’s IPO will be put on ice, despite “enormous investor interest,” Ackman said. “We will report back once we are ready to launch a revised transaction.”

Ackman made a name for himself on Wall Street as an activist investor, taking significant positions in companies and then overseeing lucrative turnarounds, including with fast food giant Wendy’s, mall operator General Growth Properties and rail operator Canadian Pacific.

With Pershing Square USA, Ackman was looking to leverage the influence he wields on social media to build a publicly traded fund for everyday investors. He made his way into the limelight in recent months as an outspoken critic of DEI efforts in schools and corporate America, helping to lead the campaign to oust Claudine Gay, Harvard’s first Black president.

A former Democratic donor, Ackman endorsed Donald Trump for president this month.

I am going to formally endorse @realDonaldTrump. I came to this decision some time ago as many @X followers have already understood from my supportive posts of Trump and my criticisms of @POTUS Biden.

The reason why I have not yet formally done so is that I want to explain my…

— Bill Ackman (@BillAckman) July 14, 2024

“I assure you that I have made this decision carefully, rationally, and by relying on as much empirical data as possible,” Ackman said in his post to more than a million followers on X announcing the endorsement.

Pershing Square USA is set to be Ackman’s first new investment vehicle in 10 years. It was underwritten by Citigroup Global Markets, UBS Securities and BofA Securities, according to a prospectus filed with the Securities and Exchange Commission.

In a candid note to investors in his management company last week, Ackman outlined concerns he encountered in a roadshow spanning “more than 150 in-person and Zoom meetings, town halls, financial adviser teach in’s etc.” Among them were Ackman’s outsize presence at Pershing Square Capital Management and the $25 billion fundraising target, which investors saw as “too large,” he said in the letter.

“It requires a significant leap of faith and ultimately careful analysis and judgment for investors to recognize that [this company] will trade at a premium after the IPO when very few in history have done so,” Ackman wrote.

Ackman did not immediately respond to a request for comment.