Bill Ackman, the CEO of Pershing Square Capital Management, made a big announcement at the Delivering Alpha conference in New York City on September 28th, 2023. He revealed his plan to launch a new investment vehicle listed on the New York Stock Exchange, and it’s generating a lot of buzz.
Ackman’s new investment is a closed-end fund, focused on investing in 12 to 24 large-cap, investment grade, “durable growth” companies in North America. What’s unique about this fund is that there is no minimum investment required. This means that it is accessible to a wide range of investors, not just the wealthy elite.
In a regulatory filing, it was revealed that this fund will have a different fee structure compared to traditional hedge funds. Rather than the typical 2% management fee and 20% performance fee, Ackman’s fund will not have a performance fee at all. In addition, he is waiving the management fee for the first 12 months, and after that, it will be a flat 2% fee. This fee structure is designed to make the fund more attractive to investors and align Ackman’s interests with those of his shareholders.
The filing also stated that Ackman and his team at Pershing Square believe that this new fund has the potential to be one of the largest, if not the largest, listed closed-end funds. They expect that Ackman’s well-known profile and large retail following will drive substantial investor interest and liquidity in the secondary market.
Ackman has certainly made a name for himself in the world of hedge fund investing, known for his market-topping returns and vocal activist campaigns. He has also gained a wide following on social media, with 1.2 million followers, where he comments on a wide range of issues from antisemitism to the presidential election.
As of the end of 2023, Pershing Square’s hedge fund held only seven stocks, including Alphabet, Chipotle Mexican Grill, and Howard Hughes Corp., all of which contributed to a 26.7% gain for the fund last year. This success is part of what has contributed to Pershing Square’s impressive $18 billion in assets under management as of the end of January.
Overall, Ackman’s new investment venture is generating excitement and is poised to be a significant player in the world of closed-end funds. With its unique fee structure, focus on durable growth companies, and accessibility to a wide range of investors, it’s no wonder that market watchers and Main Street investors alike are eagerly anticipating the launch of this new fund. Keep an eye on Ackman and Pershing Square – they are making moves that are sure to have a big impact.
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