(Bloomberg) -- Seth Klarman’s Baupost Group decided against investing in Bill Ackman’s new US closed-end fund that’s slated to price in coming days, according to people familiar with the matter.
Ackman had named the Boston-based hedge fund as one of the potential backers in a letter last week to investors in Pershing Square’s management company. He also told them that the initial public offering would raise $2.5 billion to $4 billion, far below the $25 billion estimate he originally floated.
Spokespeople for Ackman and Baupost, which oversaw $23 billion as of December, declined to comment.
Ackman wrote that Baupost would invest $150 million in the IPO. Mutual fund firm Putnam Investments was in for $40 million, and Teacher Retirement System of Texas planned to kick in $60 million, with the possibility that both could increase their orders depending on the size of the deal. A family office also expressed interest in buying 9.9% of the offering, Ackman wrote in the July 24 letter.
He urged investors to put in orders for the stock, saying it would help “improve the strength of tomorrow’s initial message to the market on deal size.” He noted that three members of the group had already placed orders with banks.
The deal was supposed to price Monday, but Pershing Square is now awaiting approval from the Securities and Exchange Commission following an update to the fund’s regulatory filing that included the letter.
The pricing is expected this week or early next week.
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