Bill Ackman’s Pershing Square Pulls IPO Plans

Billionaire investor Bill Ackman’s Pershing Square Capital Management has decided to withdraw its initial public offering (IPO) plans for Pershing Square USA, Ltd., a move that marks a significant shift in the fund’s trajectory. Ackman announced the decision on Wednesday, just months after initially pushing for the fund’s public debut as a means to open investment opportunities to everyday investors. In a detailed statement, Ackman explained that the decision to halt the IPO was driven by a critical concern raised during numerous discussions with institutional investors and family offices. The central issue was whether it would be more advantageous for investors to wait and invest in the fund through the aftermarket rather than at the IPO stage. This uncertainty led to the decision to withdraw the offering, which was set to take place on the New York Stock Exchange.

The IPO was initially ambitious, with Pershing Square aiming to raise $2 billion from the share sale. This goal was significantly scaled back from Ackman’s earlier target of $10 billion, reflecting shifting market conditions and investor sentiment. Despite the withdrawal, Ackman indicated that he plans to revisit the IPO process once a revised strategy is in place, promising to update stakeholders when a new plan is ready. Ackman established Pershing Square Capital Management in 2004, and the hedge fund has grown to manage approximately $18.7 billion in assets as of June 30, 2024. The fund’s portfolio is notably concentrated, with investments in just seven major companies, including Alphabet (Google’s parent company), Chipotle, Hilton, and Howard Hughes. Ackman’s approach has often involved high-profile investments and strategic maneuvers, including a notable attempt to expand operations through a special purpose acquisition company (SPAC), Pershing Square Tontine Holdings, in 2020.

The SPAC raised $4 billion and initially sought to acquire a minority stake in Universal Music Group. However, due to regulatory opposition from the Securities and Exchange Commission (SEC), Ackman abandoned this deal in 2021, ultimately liquidating the SPAC and returning the funds to investors. The recent IPO plans for Pershing Square USA began in February and were intended to establish the fund as a closed-end management fund, meaning it would have raised capital through the IPO before shares became publicly tradable. Ackman had promised to waive the management fee for the fund’s first year, with a 2% fee to follow, and to forgo a performance fee for the initial year of operations.

Bill Ackman’s net worth is estimated to be around $9.1 billion, placing him as the 266th richest person globally. Ackman’s prominence extends beyond his investment activities, as he has recently gained attention for his outspoken views on various social and political issues. In particular, he has been a vocal critic of student protests related to Israel’s invasion of Gaza and the response of college leadership to these protests. Following a Hamas attack on Israel in October 2023, Ackman declared that he would not hire Harvard students who signed a letter blaming Israel for the conflict. He also called for the suspension of students involved in an alleged attack on a Jewish student during a demonstration, although the students involved denied any physical engagement with the individual in question. Additionally, Ackman has urged the presidents of Harvard, the University of Pennsylvania, and the Massachusetts Institute of Technology to resign due to their handling of student protests and alleged antisemitic rhetoric on campus. His calls for resignation were partly heeded, with Harvard president Claudine Gay and Penn president Liz Magill stepping down.

Ackman’s political activities have also included a controversial endorsement of former President Donald Trump. Despite previous support for Democratic candidates and a past endorsement of former South Carolina Governor Nikki Haley in the GOP primary, Ackman officially backed Trump earlier this year, following an assassination attempt on the former president. This endorsement aligns with Ackman’s recent engagement with right-wing movements, particularly those targeting diversity, equity, and inclusion (DEI) programs. The decision to withdraw the IPO represents a significant pivot for Ackman and Pershing Square, reflecting ongoing uncertainties in the financial markets and investor sentiment. Ackman’s subsequent steps will likely be closely watched as he reassesses the fund’s strategy and prepares for a potential future offering. Meanwhile, his broader public and political engagements continue to shape his profile as a prominent figure in both the investment world and beyond.