Bill Ackman targets Main Street investors with new Pershing fund

investmentnews.com:

Hedge fund mogul Bill Ackman is looking to meet individual American investors where they are with his next investment fund.

The Pershing Square USA Ltd. fund – which still awaits regulatory approval – is set to be listed on the New York Stock Exchange under the ticker PSUS.

Structured as a closed-end fund, it aims to invest in a mix of 12 to 24 large-cap and “durable growth” core holdings focused on the North American market, according to a prospectus filed with the SEC.

Ackman has built a reputation for achieving market-beating returns by running concentrated portfolios. The star investment manager’s hedge fund, Pershing Square Capital Management, ended last year with a 26.7% return, while holding only seven stocks, including Google parent Alphabet, Chipotle Mexican Grill and Universal Music Group.  

While it posted a loss of 8.8% in 2022, the fund still managed to beat the market as the S&P 500 suffered a near-20% drawdown for the year.

“The Adviser believes that the Fund has the potential to be one of the largest, if not the largest, listed closed-end funds and expects that the Adviser’s brand-name profile and broad retail following will drive substantial investor interest and liquidity in the secondary market,” the filing says.

While hedge funds have typically come with a 2-and-20 fee structure – a 2% management fee charged on assets invested and a 20% fee on profits a given fund generates – Ackman says he will be waiving the management fee for his Main Street fund during its first year, after which a 2% fee will be charged annually.

As noted by the Wall Street Journal, a similar fund, Pershing Square Holdings, is also available to investors across the pond via European stock exchanges. Just over three years ago,