Pershing Square Capital Management, L.P., led by renowned investor Bill Ackman, has made headlines by filing for a new listed closed-end fund, Pershing Square USA, Ltd. (PSUS). The filing comes at a time when the market for listed closed-end fund IPOs has been stagnant in recent years, making PSUS's $10 billion fundraising goal all the more ambitious.
What sets PSUS apart is its plan to invest alongside Pershing Square's non-US fund, managed with a similar strategy, and Pershing Square's undertaking to offset the performance fee it receives from the non-US fund. Moreover, unlike more recent closed-end fund IPOs, the underwriting discount and offering costs will be borne by the fund rather than the adviser. The filing also says that PSUS will seek to "seed" the fund by purchasing securities from an affiliated fund.
The launch of PSUS could potentially kickstart the closed-end fund IPO market. For hedge fund managers considering their options, PSUS's approach and success could be of significant interest. By demonstrating investor appetite and market confidence, PSUS may pave the way for other hedge fund managers to explore similar offerings, reviving a market segment that has been relatively quiet in recent times.
For those interested in learning more about PSUS and its implications for the market, attorneys in Ropes & Gray's leading asset management practice are available to provide insights and guidance.
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