Pershing Square’s Bill Ackman, a well-known hedge fund billionaire, is preparing to introduce a new investment vehicle that will be listed on the New York Stock Exchange. This new venture aims to capitalize on Ackman’s large following among Main Street investors, offering them access to a closed-end fund. Unlike traditional hedge funds, which often come with high fees and complicated structures, Ackman’s new fund will be more accessible to retail investors.
According to a regulatory filing, Ackman’s closed-end fund will primarily invest in 12 to 24 large-cap, investment-grade companies in North America that are considered to have substantial growth potential. These companies would fall under the category of “durable growth,” indicating their ability to maintain steady growth over a prolonged period. The fund will not have a minimum investment requirement, making it more attractive to a wider range of investors.
One unique aspect of Ackman’s new fund is its fee structure. While traditional hedge funds charge a management fee based on the total assets under management, along with a performance fee on profits, Ackman’s fund will not include a performance fee. For the first year, he will also waive the management fee, providing an additional incentive for investors. After the initial 12 months, the fund will implement a flat 2% fee.
Ackman and his team have high expectations for the success of this new venture. In the regulatory filing, they expressed their belief that the fund has the potential to become one of the largest closed-end funds available. They anticipate that Ackman’s reputation, as well as his broad following among retail investors, will generate significant interest and liquidity in the secondary market. However, a spokesperson for Pershing Square declined to provide further comments on the matter.
Over the years, Bill Ackman has gained recognition as one of the world’s most prominent hedge fund investors. His fund has consistently delivered market-beating returns and he has become known for his vocal activist campaigns. Additionally, Ackman has built a significant following on social media platforms like Twitter, where he has 1.2 million followers. Through his social media presence, he has commented on various topics, from antisemitism to the presidential election.
Pershing Square’s hedge fund currently holds a relatively small number of stocks. At the end of 2023, Ackman’s fund had positions in just seven companies, including Alphabet, Chipotle Mexican Grill, and Howard Hughes Corporation. Despite its concise portfolio, the fund managed to achieve a gain of 26.7% in the previous year. As of January, Pershing Square had more than $18 billion in assets under management, further demonstrating Ackman’s success in attracting sizable investments.
Bill Ackman’s new investment vehicle presents a unique opportunity for retail investors to access a closed-end fund with a focus on “durable growth” companies. With a fee structure that differs from traditional hedge funds and a strong belief in its potential success, Ackman and his team have high hopes for this new venture. As one of the world’s most prominent hedge fund investors, Ackman’s track record and broad following further contribute to the anticipation surrounding the launch of this new fund.
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