Ackman to offer enhanced investor incentives in bid to revive Pershing Square IPO

Bill Ackman, the founder of Pershing Square Capital Management, is working to revive the initial public offering of his investment fund, Pershing Square USA, by introducing new incentives to attract early investors, according to a report by the Financial Times. This effort follows Ackman's decision to withdraw the planned IPO last month due to insufficient demand.

Ackman is reportedly considering a revised structure for the offering that would provide investors with additional benefits along with shares in Pershing Square USA. According to unnamed sources cited in the report, one option being explored includes offering early investors warrants that would allow them to purchase additional shares at a fixed price in the future. The original plan aimed to raise $25 billion through a New York Stock Exchange listing, which would have been one of the largest IPOs ever. However, Ackman later reduced the target to $2 billion before ultimately cancelling the listing.

Alongside the potential for future stock purchases, a significant draw for investors could be the chance to participate in the eventual IPO of Ackman’s hedge fund, Pershing Square Capital Management, which manages investments for both the proposed U.S. vehicle and Ackman’s existing European fund.

The proposed structure would be similar to a special purpose acquisition company (SPAC), with shares in Pershing Square USA initially trading as a unit with warrants before separating into individual securities. Previously, Ackman tried to entice investors by waiving management fees for the first year of trading, but this offer might be reconsidered if warrants are included in the new structure. Discussions around the new IPO structure are ongoing and could change. However, sources close to Ackman’s hedge fund expect him to relaunch the IPO before the end of the year to sustain momentum, according to the FT. Earlier this year, Ackman sold a 10% stake in Pershing Square Capital Management to a group of investors, including Iconiq Capital and Israeli insurance company Menora Mivtachim, valuing the hedge fund at $10.5 billion. The Financial Times previously reported that Ackman might list his hedge fund as early as 2025.