Pershing Square USA IPO Draws Inspiration from Berkshire Hathaway

Billionaire hedge fund manager Bill Ackman is marketing the initial public offering of Pershing Square, a US closed-end fund that could raise as much as $25 billion. In a briefing with prospective investors, Ackman drew parallels to Warren Buffett’s Berkshire Hathaway (BRK.B), emphasizing his aim to create generational wealth. The Zoom town hall featured Ackman and Pershing Square Chief Investment Officer Ryan Israel fielding questions from around 400 participants. Ackman’s US closed-end fund will mirror Pershing Square Holdings, its European counterpart, targeting long-term equity stakes in large-cap, investment-grade, free-cash-flow-generating North American growth companies. The fee structure for Pershing Square USA includes a 2% management fee, with the first year waived, compared to its European peer’s 1.5% annual fee and 16% performance fee. Pershing Square USA will be a perpetual fund with no option to liquidate or extend its life upon shareholders' approval. Market Overview:

• Bill Ackman markets Pershing Square USA IPO.
• Fund aims to raise $25 billion.
• Structure mirrors European counterpart.

Key Points:

• Fee structure includes 2% management fee with first year waived.
• Perpetual fund with no liquidation or extension option.
• Targets large-cap, investment-grade North American companies.

Looking Ahead:

• Potential IPO of Pershing Square management company by 2026.
• Upcoming global town halls to engage potential investors.
• Investor confidence in Ackman’s strategic investment and activism.

The new fund’s structure is unusual among recent launches, as most closed-end funds have a termination or liquidation date to trade closer to net asset value. Ackman’s confidence in his ability to outperform the equity markets through strategic investment and moderate to aggressive activism is expected to attract investors despite the fund bearing the IPO’s underwriting fees. Ackman also discussed Pershing Square’s recent sale of a 10% stake in the hedge fund ahead of a potential IPO of its own, which could occur as soon as late 2025 or 2026. The upcoming global town halls are part of Ackman’s strategy to engage with potential investors and build momentum for the IPO.