The largest listed takeover vehicle in the world gives up the search for a purchase object and returns four billion dollars to investors.

Hedge fund manager Bill Ackman, who initiated Pershing Square Tontine (PSTH), admitted on Tuesday night that he had not found a company that met PSTH's quality and return criteria.

Special purpose acquisition companies (SPACs) like Pershing Square Tontine have two years after their IPO to find an acquisition target that they can buy with their investors' money.

PSTH went public on the New York Stock Exchange in July 2020, in the midst of the SPAC boom.

Ackman's plans to use the vehicle to take a 10 percent stake in Universal Music, which was spun off from Vivendi, failed due to the veto of the US supervisory authorities.

Instead, the billionaire joined Universal with his hedge fund Pershing Square.

The US authorities have been trying to regulate the SPAC market more closely for some time.

However, the boom that these takeover vehicles, most of which were set up by prominent ex-managers or investors, triggered into 2021 has subsided anyway.

Too many SPACs, hundreds of which have floated in the US alone, performed disappointingly in the stock market after being filled with life.

The SPAC boom only spilled over to Europe in a weakened form; in Frankfurt, for example, only a handful of these companies made it onto the stock exchange.

Most of them initially raised $200 to $400 million.

If a takeover becomes concrete, they go looking for more money.

In a letter to PSTH investors, Ackman blamed the failure on unfavorable market conditions and stiff competition from traditional IPOs, among others.

SPACs were initially considered a tried and tested means of circumventing the complicated approval procedures for going public, especially for young, up-and-coming companies in the USA.

"High-quality, profitable growth companies can delay their IPOs until the market environment is more favorable," Ackman wrote.

"This has limited the circle of high-quality transactions for PSTH, especially in the past 12 months."

Well-known investors such as the hedge fund Baupost, the Canadian pension fund OTPP and the fund company T. Rowe Price had participated in Pershing Square Tontine.

For investors, SPACs are initially a risk-free investment because they can return their shares at the issue price before a possible takeover.

"There would have been acquisitions that PSTH could have made over the past year, but none of them lived up to our aspirations," Ackman wrote.