Bill Ackman to Offer Enhanced Incentives to Revive Pershing Square IPO

Pershing Square IPO: Bill Ackman, head of Pershing Square Capital Management, is said to be trying to bring back the initial public offering (IPO) of his investment fund, Pershing Square USA, by giving early investors more reasons to join. This was reported by the Financial Times.

This comes after Ackman called off the planned IPO last month because not enough people wanted to buy shares.

Reports say that Ackman is looking into a new way to arrange the offering that would give investors more than just shares in Pershing Square USA.

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Sources familiar with the situation who were not named in the story say that one option being thought about is giving early investors warrants that let them buy more shares at a set price in the future.

The initial public offering (IPO) on the New York Stock Exchange was supposed to raise $25 billion, which would have made it one of the biggest IPOs ever.

But Ackman drastically lowered the goal to $2bn before pulling the stock altogether.

In addition to the chance to buy more stock in the future, investors may be most interested in the chance to buy into Ackman’s hedge fund, Pershing Square Capital Management, when it goes public. This fund manages investments for both the proposed US vehicle and Ackman’s current European fund.

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The suggested structure would be like a special purpose acquisition company (Spac). Pershing Square USA shares would trade as a unit with warrants at first, but then they would be split up into separate securities.

Ackman used to try to get investors by not charging management fees for the first year of trading. If options are added to the new structure, this offer may be looked at again.

The new format for the IPO is still being talked about and could change. However, the FT reports that people close to Ackman’s hedge fund think he will bring the IPO back to the market before the end of the year to keep things moving.

Ackman sold a 10% share in Pershing Square Capital Management earlier this year to a group of investors that included Iconiq Capital and the Israeli insurance company Menora Mivtachim. It was worth a huge $10.5bn.

The Financial Times has said in the past that Ackman could sell his hedge fund as early as 2025. At Pershing Square, no one would talk about the talks that were still going on.

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