Investor Ackman's Pershing Square launches new fund aimed at US retail investors (updated)

Pershing Square Holdings

07/02/2024 18:17

(Adds details about fund in paragraph 3, background in
following paragraphs)
    By Svea Herbst-Bayliss
       NEW YORK, Feb 7 (Reuters) - Billionaire investor William
Ackman is offering a new hedge fund to U.S.-based retail
investors, allowing Main Street to tap into his double digit
performance gains previously reserved for Wall Street clients.
    Ackman's Pershing Square Capital Management said in a
regulatory filing on Wednesday that the firm is launching
Pershing Square USA, an investment vehicle that will be listed
on the New York Stock Exchange. 
    There will be no minimum investment, the fund will charge a
flat 2% fee every year after the first year and it will be
available to retail investors who lack the net worth needed to
invest in hedge funds.
    The news could generate fresh buzz for the 57-year old fund
manager who recently ventured beyond telling companies how to
run their businesses to focusing on antisemitism on college
campuses. He also pushed for the ouster of three university
presidents over their handling of free speech in the wake of the
Oct. 7 Hamas attack on Israel. 
        The new fund will be structured as a closed-end fund
that raises money through an initial public offering and then
its shares will trade on the exchange. It will be managed by
Ackman, Ryan Israel, the firm's chief investment officer, and
other members of the investment team.
  
        Previously Ackman's funds were available only to
high-net worth individuals, institutions and foreign investors
who could put money into London-listed Pershing Square Holdings.
  
        The filing does not say how much money the fund hopes to
raise. Pershing Square Capital Management currently oversees
roughly $18 billion in assets.
  
        Ackman can launch the new fund since he structured the
fees in a way to avoid U.S. regulators' rules against charging
retail investors the kind of incentive fees that hedge fund
investors pay when the fund performs well.
  
        Recent rule changes also now allow funds to use
derivatives more. These are tools that have netted Ackman's
investors big gains over the past years through bets on credit
markets during COVID and on interest rates last year.
  
        As Ackman's returns surged over the last years, interest
in him and his funds has grown. The investor returned an average
31% gain a year over the last five years. 
  
        But his investment career has been studded with some
notable losers as well, including a bet that Herbalife's stock
price would fall and that Valeant's stock price would keep
climbing.
  

 (Reporting by Svea Herbst-Bayliss, editing by David Ljunggren)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))