Activist investor Bill Ackman’s fundraising for the initial public offering for a closed-end fund has gone from bad to worse this week.
The famed hedge fund manager is hoping to use his newfound social media stardom to drum up investor interest in a new fund called Pershing Square USA, a closed-end fund he is taking public that, unlike his previous business ventures, regular retail investors would be able to invest in.
Ackman originally wanted to raise $25 billion for the fund’s IPO, but that shrank to $4 billion last week—and now he is aiming to raise just $2 billion, according to the most recent regulatory filing.
One notable investor, Seth Klarman’s Baupost Group, reportedly pulled out of investing $150 million in the fund, in a further blow.
Fundraising struggles aren’t the only hiccup in the Pershing Square USA rollout. The fund was originally set to start trading on Tuesday, but that has since been pushed back to August 5 after the Securities and Exchange Commission sought to review a private letter that Ackman sent to some investors in the firm, according to Bloomberg.
That said, the IPO is currently oversubscribed, and the firm projects an aggregate offering of 40 million shares at $50 each.
Translating online fame into returns
Ackman has been known for the bold, aggressive investment strategy that has made him billions while also cementing his reputation as a controversial figure. He was locked in a five-year battle with vitamin and weight-loss company Herbalife and fellow investor Carl Icahn that began with his $1 billion bet against the firm in 2012, alleging that it was a pyramid scheme.
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But over the last year his public profile has escalated beyond just business battles, as he forayed increasingly into politics and has engaged in general ramblings about pretty much every hot button issue there is on his chosen platform, X, where Ackman has 1.3 million followers.
“If you are wondering why I am posting so much, I am on vacation. @X is how I relax,” he wrote on the platform earlier this month.
Earlier this year, Ackman helped lead an online campaign that ousted Harvard’s first Black president, Claudine Gay, over plagiarism allegations and concerns about how the university was handling antisemitism on campus. Ackman recently announced he was backing former President Donald Trump in his presidential campaign.
His bold social media presence was expected to boost retail investor interest in Pershing Square USA, which is his first fund to cater to his fans and followers directly.
Only time will tell how successful this strategy will be when the fund eventually launches.—LB