Bill Ackman announced that his US-listed fund, Pershing Square USA, will be smaller than the initially anticipated $25 billion.
Citing investor concerns about the fund's structure, Ackman set a "hard cap on size at $10 billion" and expects to raise between $2.5 billion and $4 billion.
The fund, trading next week under the symbol PSUS, aims for long-term value in the market rather than focusing on IPO size.
"There is enormous sensitivity to the size of the transaction," Ackman wrote in a letter to his investors and reported by the Reuters news agency. "The ultimate deal size will depend on how demand builds Thursday, Friday and Monday."
Institutional investors such as Putnam and the Teachers Retirement System of Texas have committed to the fund.