As Bill Ackman's Pershing Square Struggles To Reach IPO Stage, Major Hedge Fund Opts Out Investing In Upcoming Fund: Report

In a recent development, Seth Klarman’s Baupost Group has reportedly decided against investing in the forthcoming U.S. closed-end fund by Bill Ackman.

What Happened: The Boston-based hedge fund, Baupost Group, has declined to invest in the upcoming fund, according to people familiar with the matter. Ackman had previously identified Baupost as a potential investor for Pershing Square’s management company in a letter to investors, Bloomberg reported on Tuesday.

The initial public offering (IPO) for the fund was expected to raise between $2.5 billion to $4 billion, a significant drop from the initial projection of $25 billion. Despite Ackman’s assertion that Baupost would contribute $150 million to the IPO, the hedge fund has opted out of the investment.

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Other potential investors, such as Putnam Investments and the Teacher Retirement System of Texas, have shown interest in investing $40 million and $60 million respectively. The IPO was initially scheduled to price on Monday, but Pershing Square is currently waiting for approval from the Securities and Exchange Commission after updating the fund’s regulatory filing.

Pershing Square and Baupost Group have yet to respond to Benzinga’s queries.

Why It Matters: This development follows a recent reduction in the IPO target for Ackman’s U.S. investment fund, Pershing Square USA, by as much as 90%. The initial target of $25 billion was significantly reduced, with Ackman stating that he anticipates raising between $2.5 billion and $4 billion.

The IPO was also delayed indefinitely, as confirmed by the New York Stock Exchange (NYSE). The NYSE announced that the listing of Pershing Square USA Ltd. has been postponed, with a new date yet to be disclosed. Pershing Square refrained from commenting further but clarified that the IPO is still proceeding, with the pricing date to be announced later.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari