Bill Ackman’s $5 billion Pershing Square IPO to begin trading, tests Berkshire-style outlook

Bill Ackman’s long-awaited foray into the public markets will debut on Wednesday, marking a delayed but ambitious move to build an investment platform like Berkshire Hathaway.

Pershing Square Capital Management founder Pershing Square Capital Management’s initial public offering raised $5 billion, pricing in below expectations after marketing the deal initially targeted between $5 billion and $10 billion. The move is a far cry from earlier ambitions floated two years ago to raise as much as $25 billion.

The transaction creates two entities that trade separately on the New York Stock Exchange: closed-end fund Pershing Square USA Ltd., which will trade under the ticker PSUS, and asset manager Pershing Square Inc., listed on PS. The dual structure allows investors to gain exposure to the underlying portfolio or the management business itself.

“Hedge funds are known for managing the money of wealthy people. And now we have an opportunity for someone with $50, who can be a long-term shareholder,” Ackman said on CNBC’s “Squawk on the Street” on Wednesday. “Usually, shops are getting smaller, centers are popular. We did the opposite.”

The closed-end fund’s shares are priced at $50 each, and the offering is designed to attract both institutional and retail investors as well as working capital. Investors in PSUS will also receive bonus shares in Pershing Square Inc., tying the two vehicles together while maintaining separate trading.

The list gives public investors their first direct entry into Ackman’s investment platform, which holds a concentrated portfolio of 10 major names including Amazon, Uber again Brookfield from the end of 2025.

Track record and macro hedging

Central to Ackman’s position is Pershing Square’s long-term return profile. Since its inception in 2004, the company has generated a cumulative return of more than 2,600%, far outpacing the S&P 500’s estimated 836% return over the same period, according to road show materials.

Another key selling point is the company’s track record of incorporating macro hedging – a Pershing Square strategy that offers huge returns in times of volatility. At the beginning of 2020, the company made one of the most high-profile trades, spending about $ 27 million in credit protection with investment grade indicators and high yield as the Covid pandemic spread in the markets. The hedge returned about $2.6 billion in a few weeks, a 93-fold return that helped offset losses elsewhere in the portfolio.

Buffett is an inspiration

Ackman is taking a concrete step toward a long-held ambition to build a publicly traded car modeled after Berkshire, the conglomerate owned by Warren Buffett for decades. The activist investor has repeatedly pointed to Buffett’s evolution — from running a partnership to overseeing a large perpetual vehicle — as the blueprint for Pershing Square’s future.

The company emphasized the advantages of permanent capital – a structure that reduces the risk of forced sales during market depression and allows for long-term investment. Ackman has argued that such flexibility is essential to compounding returns over time, echoing the model that helped transform Berkshire from a struggling textile business into one of the world’s largest investment vehicles.

Ackman said he plans to adopt aspects of Berkshire’s shareholder culture, including holding annual meetings where investors can interact directly with executives.

“We will have investor days. We will have an annual meeting, Berkshire Hathaway style, where people come, and ask questions,” said Ackman.