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Hedge fund manager Bill Ackman is closing in on a long-desired public listing that is expected to raise half of its top target, following an unsuccessful attempt at an initial public offering two years ago.
The listing for Pershing Square USA, a new closed-end fund, is expected to raise about $5bn, said three people familiar with the matter. Pershing Square had initially said the listing could raise as much as $10bn.
For Ackman, the fundraise is the culmination of a years-long effort to gain access to new perpetual capital through a public listing that will pay his hedge fund a steady stream of lucrative fees. It is part of what he has described as a vision of creating a “modern-day” Berkshire Hathaway.
But the scaled-back fundraising shows investors remain sceptical of backing closed-end funds, which have historically traded at a discount to their net asset value.
For example, at the end of March, Ackman’s $16bn assets under management London-listed fund, Pershing Square Holdings, had a market value of about $9bn.
Ackman has become a household name in recent years through his prolific social media posts, including those supporting US President Donald Trump, and his crusade against university presidents whom he viewed as failing to adequately support Jewish students.
As part of the fundraising, investors will be given bonus shares in the hedge fund’s management company for participating in the listing, allowing them to reap fee revenues from the business. The shares in the new US vehicle, expected to start trading on Wednesday, will be priced at $50.
One investor said the fundraising was “great” and it demonstrated Wall Street’s interest in gaining exposure to the hedge fund’s lucrative fees. “Institutions are betting on the management company because they are typically not investors in closed-end funds,” he said.
Ackman had tried to raise $25bn for a similar listing of the US fund in 2024, a hugely ambitious goal for any company, let alone for a structure that has fallen out of favour with investors. He ultimately pulled the listing after slashing the target from $25bn to $2bn.
“This deal was sized appropriately for the market environment that we’re in,” said one banker involved in the current listing. “If you were to critique the last deal, the aspirations of the size back then probably outsized the market.”
In a second attempt at listing its US fund, Pershing Square targeted retail as well as institutional investors. Ackman laid out his plans to individual investors earlier this month in a recorded interview with Robinhood chief executive Vlad Tenev.
“Institutional investors have clients who are emotional, and panic and pull their money at precisely the wrong time,” Ackman said in the video. “One of the big advantages of being a retail investor is that you have way more liquidity . . . and you don’t have clients that you’re trying to prove something to.”
However, at least 80 per cent of the funds raised are expected to come from institutional investors, said two people familiar with the matter.
Ackman has been on a dealmaking spree in recent years to create a broader conglomerate through a constellation of investments and funds, including taking effective control of the real estate group Howard Hughes Holdings. But the effort has yielded mixed results.
Ackman’s new listing comes as this year’s market volatility has wrongfooted Pershing. The group’s flagship fund had lost more than 2 per cent of its value this year as of April 21, according to filings.
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