Renowned hedge fund manager Bill Ackman has embarked on an ambitious new venture, aiming to raise as much as $20 billion for a new U.S.-listed closed-end fund, Pershing Square USA. This bold initiative could more than double the assets under management (AUM) for Ackman’s firm, Pershing Square Capital Management, which has experienced a remarkable performance resurgence in recent years.
A New Chapter for Pershing Square Capital Management
Last month, Ackman made headlines by selling 10 percent of Pershing Square Capital Management, a firm that has delivered mostly double-digit returns since 2019 following a challenging period of losses. This move underscores his confidence in the firm’s continued growth and his commitment to expanding its reach.
Introducing Pershing Square USA
Pershing Square USA is designed to offer investors several advantages over traditional hedge funds. Regulatory filings reveal that the new fund will feature lower fees and quicker access to capital. Notably, there will be no management fee for the first year following the fund’s initial public offering (IPO), and no performance fees will ever be charged. This investor-friendly structure is expected to attract a wide range of participants.
Accessibility and Broad Appeal
The fund will be listed on the New York Stock Exchange and will be open to a broad audience, including pension funds, endowments, and retail investors. Regulatory filings indicate that approximately 80 percent of the financing is anticipated to come from institutional investors, with retail investors contributing the remaining 20 percent.
Ackman, a prolific user of social media platform X, hinted at the fundraising effort on July 9, telling his 1.3 million followers: “I am going to be busy for the next few weeks. $PSUS!!” This engagement with his audience highlights his proactive approach to communication and investor relations.
Ackman’s Activist Legacy
Bill Ackman has built his reputation as an activist investor, leading high-profile campaigns at companies such as Canadian Pacific Railway, payroll and tax services company ADP, Chipotle Mexican Grill, Hilton Worldwide Holdings, and Restaurant Brands International. His hands-on, vocal approach has made him a formidable presence in the investment world.
Recent Performance and Strategy Shift
Pershing Square Holdings has posted impressive returns in recent years, earning 27 percent in both 2021 and 2022, 70 percent in 2020, and 58 percent in 2019. Despite an 8.8 percent drop in 2022 amid a broader market downturn, these results reflect a significant turnaround following a reorganization of the firm.
Ackman has taken his own advice, restructuring his investment strategy to reverse the double-digit losses experienced in 2015 and 2016, as well as smaller declines in 2017 and 2018. This strategic shift has positioned Pershing Square for sustained success and increased investor confidence.
Conclusion
Bill Ackman’s launch of Pershing Square USA represents a significant milestone for his firm and the broader investment community. With its investor-friendly fee structure, accessibility, and Ackman’s proven track record, the new fund is poised to attract substantial interest and capital. As Ackman continues to innovate and adapt, Pershing Square USA could become a cornerstone of his investment legacy, offering opportunities for a diverse range of investors to participate in his future successes.
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