Pershing Square’s Public Debut: A $5 Billion IPO with a Twist
Billionaire investor Bill Ackman’s Pershing Square made its public market debut on Wednesday, raising $5 billion in a combined initial public offering (IPO). However, the offering fell short of initial expectations. It created two separately traded entities on the New York Stock Exchange: the closed-end fund Pershing Square USA (ticker: PSUS) and asset manager Pershing Square Inc. (ticker: PS).
Despite the successful capital raise, PSUS shares closed at $40.90 on their first day of trading, down 18% from the IPO price of $50 per share. The $5 billion raised represents the low end of the targeted range of $5 billion to $10 billion, and a significant reduction from earlier ambitions to raise as much as $25 billion when the plan was first floated two years ago.
The transaction was structured to appeal to both institutional and retail investors, notably omitting performance fees. Investors in PSUS received bonus shares in Pershing Square Inc., tying the two vehicles together while maintaining separate trading. Ackman emphasized his vision of building a Berkshire Hathaway-style permanent capital vehicle, modeled after Warren Buffett’s investment approach.
“We’re going to have investor days. We’re going to have an annual meeting, Berkshire Hathaway style,” Ackman stated on CNBC. The fund will hold a concentrated portfolio of large-cap names including Amazon, Uber, and Brookfield.
Source: CNBC