Shares in a newly listed fund backed by Bill Ackman fell sharply on their trading debut on Wednesday, underscoring the challenges of translating high-profile investor appeal into sustained market demand.
The stock-picking vehicle, Pershing Square USA, opened about 16% below its $50 offering price, despite raising $5 billion in its initial public offering.
PSUS began trading at $42, significantly below its $50 IPO price, and was last seen at around $40.90, marking a decline of about 18%.
Meanwhile, Pershing Square (PS), his hedge fund, opened at $24 and was trading near $23.50.
The weak debut comes even as Ackman sought to position the fund as a vehicle that could bring hedge fund-style investing to a broader base of retail investors.
Fundraising falls short of expectations
The $5 billion raised was at the lower end of the targeted $5 billion to $10 billion range, according to securities filings.
The outcome also fell short of earlier ambitions.
In 2024, Ackman attempted to list a similar vehicle in the United States with fundraising targets exceeding $25 billion, but scrapped those plans amid tepid investor interest.
While Ackman had lined up approximately $2.7 billion in commitments from institutional investors before formally marketing the deal, demand from retail investors appeared more limited than expected.
More than 80% of the capital ultimately came from institutions such as pension funds, family offices, insurance firms, and high-net-worth individuals, he said.
The fund’s structure, which omitted performance fees and included incentives such as bonus shares in Pershing Square Inc., was designed to attract both institutional and retail participation.
Push to democratise investing faces early test
Ackman has framed the launch as part of a broader effort to “democratize investing,” allowing smaller investors to access strategies typically reserved for wealthy clients.
“Hedge funds are sort of known for managing money for rich people. And now we have the opportunity for someone with $50, could be a long-term shareholder,” Ackman said on CNBC’s “Squawk on the Street” on Wednesday.
“Usually, the retail gets cut massively back, the institutions are favored. We did the opposite.”
The fund provides public investors with exposure to a concentrated portfolio of large-cap stocks, including holdings such as Amazon, Uber, and Brookfield.
Ackman said the new vehicle would allow investors to benefit from the double-digit returns his firm has generated over the past two decades, adding that the strategy combines active engagement with portfolio companies and a focus on tax efficiency.
“This is something people will want to own,” he told Reuters. “This is not going to be your grandmother’s closed-end fund.”
Volatility and structural concerns weigh
Despite the long-term pitch, Ackman acknowledged that trading in the fund could be volatile in the near term.
Some investors may look to exit quickly after the listing, particularly given the incentive structure offering free shares in Pershing Square Inc. to IPO participants.
The offering also reflects the challenges faced by high-profile investors attempting to tap retail capital markets.
Ackman’s large social media following — over 2 million users on X — did not translate into a surge of small-investor demand.
Anchor investors, who committed roughly $2.8 billion and agreed to hold their stakes for at least six months, were offered additional shares as part of the deal structure, helping stabilise the fundraising process.
A cautious start for a high-profile bet
The listing marks a significant milestone for Ackman, coming nearly two years after his earlier attempt to bring a similar fund to market was shelved.
While the debut provides public investors with direct access to his investment platform, the sharp decline on day one highlights lingering skepticism around valuation, structure, and demand.
Whether Pershing Square USA can deliver on its promise of long-term returns — and attract sustained retail interest — will likely determine if Ackman’s effort to reshape access to hedge fund investing gains broader traction.
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