Bill Ackman Is Hoping to Double His Hedge Fund’s Size Through New Publicly-Traded Fund

Hedge fund billionaire Bill Ackman has never shied away from hot takes — the CEO of hedge fund Pershing Square has been known to take aggressive stances on diversity, universities, and politics, earning him over 1.3M followers on X. Now, he’s hoping his celebrity investor status can help him double the size of his $18.7B hedge fund.

Squaring up loose ends: While Ackman may not boast the cult following of Wall Street’s most pastoral figure or manage a company like Berkshire Hathaway ($BRK-A), he’s taking a page out of Warren Buffett’s book. Inspired by the legendary investor, Ackman’s firm is launching a publicly-traded fund on US markets — Pershing Square USA. This new closed-ended fund will let investors buy into the multi-billionaire’s portfolio on US markets — and potentially hand Ackman and Pershing a monster capital infusion. But first, Ackman needs to convince investors of his track record.

• Since 2015, Pershing Square has lost half of its assets — with bad bets on pharmaceutical companies, expensive shorts on MLMs, and controversial views on US debt costing the fund billions.
• Despite this, a strong performance in 2023 — during which Pershing Square returned 26.7% — shows Ackman’s ability to hit the mark and corral returns for investors.

Trouble in Pershing Square

This week, Pershing Square is expected to raise $25B from its initial public offering (IPO) — potentially one of the largest ever. However, a report released late last week suggests that Ackman had slashed the IPO fundraising target by 90%, and delays have thrown a wrench in the launch.

• The IPO pricing for Pershing Square USA has been delayed after the SEC requested more details about the offering, investors, and comments.
• Additionally, Pershing Square has advised shareholders to disregard Ackman’s previous commitments to provide “unrestricted” updates about the fund on X.

Can controversy sell? Ackman mentioned that the fund struggles to “generate enthusiasm” around its closed-end structure. Still, the outspoken and controversial investor hopes these delays, comments, or his political views won’t overshadow the fund’s launch. The company will waive management and performance fees for the first year to attract investors. However, given the fund’s tumultuous trip to market, it’s hard to say if Ackman has the clout necessary to pull the billions he initially hoped for.