Bill Ackman wanted $25bn. He got zero

One mega-deal hiccup to start: Chevron’s $53bn acquisition of oil producer Hess will not close before the middle of 2025 after an arbitration hearing was set for May, further dragging out the contentious takeover.

And a SoftBank-backed start-up is accused of fraud: The founder of a SoftBank-backed social media app targeted at Gen Z users has been sued by US authorities for allegedly deceiving investors and burning millions of their dollars on his wedding, flights and luxury hotels.

In today’s newsletter:

• Bill Ackman’s scuppered IPO plans

• Private credit giant Ares raises record fund

• Why Rio Tinto is avoiding ‘major M&A’

Bill Ackman’s float plans fall apart

Well, there goes Bill Ackman’s long-awaited IPO.

The hedge fund manager withdrew his proposed public listing for closed-end fund Pershing Square USA on Wednesday — a massive about-face for the billionaire investor who just weeks ago expected it to be valued at $25bn.

His original vision was to oversee a public company along the lines of Warren Buffett’s Berkshire Hathaway, with annual meetings that would attract thousands of regular investors.

But in the end, in Ackman’s words, the problem came down to how it was structured. While he said the firm had received “enormous investor interest”, he questioned whether investors would be “better served waiting to invest in the after-market than in the IPO”.

He added in a statement (which he also, of course, immediately posted on social media platform X): “This question has inspired us to re-evaluate PSUS’s structure to make the IPO investment decision a straightforward one.”

Ultimately, the investor demand that Ackman and his bankers envisioned didn’t materialise. While he initially aimed for $25bn — which would’ve been one of the largest IPOs ever — that target fell dramatically in recent days. Last week he said it would land between $2.5bn to $4bn. Then on Tuesday, it was $2bn.

“To Bill’s credit, he was trying to do something very different,” one banker involved in the deal told DD. “Obviously it didn’t come together the way he wanted here. I’m sure he’ll consider other things and other ways to do it.”

It didn’t help that Seth Klarman’s hedge fund Baupost Group — which Ackman had previously mentioned in a letter to investors as anchoring the deal with a $150mn commitment — decided against backing the listing.

But as we’ve all seen before, Ackman tends to bounce back. DD will be watching his X account for updates.

Rio Tinto doesn’t have FOMO

The mining industry is feeling the temperature dial turn up on M&A, after BHP’s aborted £39bn bid for Anglo American.

But one man trying to keep his cool in the heat is Jakob Stausholm, who leads the industry’s second-biggest player: Rio Tinto.

The mining boss told the FT on Wednesday that he has “no FOMO or fear of missing out” on a wave of big dealmaking, even as he signalled greater appetite for stomaching mergers now that the company has strengthened its balance sheet, operations and government relations.

On Wednesday, Rio quashed one potential route that activist investor Palliser had supported to boost its valuation: consolidating its dual corporate structure and moving its primary listing to London.

But with Rio’s balance sheet strong and operations purring, investor focus is turning to its growth prospects. Stausholm said that going for Anglo, which is breaking itself up, would be “all-consuming”.

Rio is spinning a few plates to boost growth. It’s building Simandou, the world’s largest-ever mining project that will produce iron ore in Guinea; increasing output at its Oyu Tolgoi copper mine in Mongolia; and building the Jadar lithium mine in Serbia.

But whether all of this will appease investors is another question — as is whether Stausholm can keep his cool if rivals such as BHP, Glencore and Freeport turn up the heat on industry consolidation.

Private credit giant Ares breaks a record

The race to raise the biggest private credit fund is on.

Ares Management is currently in pole position. The private credit shop on Wednesday unveiled that it had secured a record-breaking $34bn fund, further cranking up the race between the world’s biggest credit-focused investment groups.

The $34bn figure includes billions of dollars of bank loans, which will boost Ares’ ability to lend, as well as separately managed accounts that will invest alongside the new flagship fund, DD’s Eric Platt reports.

The investment group said it had drawn in $15.3bn of commitments from investors for its third senior direct lending fund, surpassing a $10bn target.

The new fund shows that investors are still clamouring to put their money into the popular asset class, even as cracks start to emerge in some private credit deals.

It’s just another sign that investors — including pensions, endowments and sovereign funds — have moved away from private equity, with many buyout groups struggling to reach fundraising targets as they sit on unsold companies worth a record $3.2tn.

Ares’ latest fund outpaces other recent mega-raises. HPS Investment Partners amassed $14.3bn from investors for a new loan fund last month (when you include leverage from banks, that figure jumps to $21bn). Goldman Sachs is also in the race: in May it topped $20bn for its latest private credit fund.

“It is a difficult fundraising market out there and what we have seen is that investors are looking to consolidate their own manager lists,” said Jana Markowicz, a partner at Ares.

She added: “We’ve benefited from that, with the size and scale Ares brings to bear on the right side of that equation.”

Job moves

• HSBC has appointed Jonathan Bingham as interim chief financial officer as the group looks for a permanent replacement. He was previously global financial controller, and will retain responsibilities for that post. He is replacing Georges Elhedery, who is becoming chief executive.

• Boeing has named Kelly Ortberg as its new chief executive, after Dave Calhoun announced he would leave by the end of this year. Ortberg was formerly the chief executive of Rockwell Collins.

• Tiger Global partner Alex Cook is leaving the firm after seven years, TechCrunch reports. He previously worked at Apollo.

Smart reads

Bizarre bidder Bids for Paramount have become part and parcel of dealmaking. But the latest one doesn’t look at all like the rest, Alphaville writes.

Texas vs data centres The Lone Star state has struggled with its power grid for years, Bloomberg reports. Now, it’s facing the toughest test yet: power-hungry data centres.

AI boom Consultants have found a sweet spot advising companies on how to navigate a new world dominated by AI, Lex writes.

News round-up

CBiz to buy Spac-focused Marcum in $2.3bn accounting deal (FT)

Delta says CrowdStrike IT outage will cost airline $500mn (FT)

Top BlackRock executive benefits from unusual ‘points-style’ bonus pay (FT)

Indian IT outsourcer Infosys hit with $4bn tax demand (FT)

Thames Water breaches licence conditions with fresh rating downgrade (FT)

Meta’s revenue growth and upbeat guidance help offset AI spending worries (FT)