Bill Ackman's Pershing Square has raised $5 billion for a new U.S.
publicly listed fund (PSUS), aiming to create a permanent capital vehicle modeled after an investment holding company rather than a traditional closed-end fund.
Ackman expresses a highly bullish outlook, stating that high-quality companies like Uber and Meta are 'very cheap' and that his firm can deploy the new capital within weeks to capitalize on these opportunities.
The new fund, PSUS, is structured to be low-cost, with no incentive fees, and is being taken public at book value, which Ackman argues is a significant discount for a business that has historically generated high returns on equity.
Ackman outlines a two-pronged strategy to build a modern Berkshire Hathaway: using PSUS for public market investments and Howard Hughes Holdings to acquire operating businesses, starting with the insurance company Vantage Holdings.
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Concerns Raised
Potential for the new closed-end fund (PSUS) to trade at a discount to NAV, a common issue for such structures.
Short-term market volatility and inflation caused by geopolitical tensions, specifically the conflict involving Iran.
The risk of mis-pricing in crowded asset classes like private credit, driven by rapid growth and competition.
Opportunities Identified
Deploying $5 billion of new capital into what are perceived as undervalued, high-quality companies.
Achieving a premium valuation for PSUS by delivering superior returns and effective shareholder communication.
Long-term value creation through the Howard Hughes holding company structure, particularly by leveraging insurance assets.
Capitalizing on a pro-M&A environment fostered by the current U.S. administration.