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Bill Ackman's Pershing Square Fund Seeks $25 Billion IPO

By:Thomas Westwater

It would create the largest closed-end fund, or CEF, ever listed in the United States


  • Pershing Square has started the roadshow for its U.S. closed-end fund.

  • Hedge fund manager Bill Ackman seeks to raise $25 billion.

  • The IPO will list at $50 per share on the New York Stock Exchange.


Bill Ackman’s Pershing Square USA, a new closed-end fund (CEF), filed an updated Form N-2 with the Securities and Exchange Commission (SEC) on July 9.

Ackman’s hedge fund, Pershing Square Capital Management (PSCM), will serve as the fund’s advisor, according to the filing. It will allocate an aggregate investment of $500 million in the offering. Pershing Square reportedly raised about $1 billion recently by selling a 10% stake in its hedge fund last month.

Pershing Square intends to raise $25 billion for the fund, a lofty target by any measure.

The filing shows the fund targets a listing price of $50 per share with about 200 million shares of common stock and will trade under the ticker symbol “PSUS.” It will charge a fee of 2% but will waive it in the first year.

Primary underwriters for the deal are Citigroup (C), UBS Group (UBS), Bank of America (BAC) and the Jefferies investment bank, according to the filing,


Pershing Square faces steep climb to raise $25 billion

If Ackman successfully raises the $25 billion for the fund, it will be the largest CEF listed in the United States.

Ackman is well known in the investing world as an activist hedge fund manager who has scored several big wins. He bought credit default swaps against the Municipal Bond Insurance Association (MBI) and profited heavily from Wendy’s (WEN) spinoff of the Tim Hortons brand. Recently, news outlets have covered his campaigns against university presidents amid protests over the war in Gaza.

Bloomberg reported that Ackman wants to use his X account, formerly Twitter, to share his ideas for the fund once it is trading, according to people familiar with the situation. He has over 1.3 million followers on the platform.

Pershing Square Holdings (PSH) has a European-listed closed-end fund with about $15 billion in assets under management as of July 1. That fund has outperformed the S&P 500 over the last five years although it traded at a 28.7% discount to net asset value.

The move to waive fees, along with his popularity, will likely help him secure most of the funds, but it remains a big bet in a market that hasn’t seen much success with closed-end funds in recent years.


What is a closed-end fund?

A closed-end fund, or CEF, is like a mutual fund or exchange-traded fund (ETF)—both open-end funds—but has distinct differences. Unlike mutual funds and ETFs, only the initially issued shares will trade on an exchange.

The fund will not issue or redeem shares daily. Because investors cannot redeem a closed-end fund, it can use more capital for investments, potentially allowing a more aggressive investment strategy.

The secondary market—in this case, the NYSE—determines the price of the fund, and it may differ from the fund’s net asset value (NAV). Closed-end funds typically use leverage, whereas mutual funds are not allowed to use significant leverage.


Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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