Billionaire Ackman bought shares of his Pershing Square company on the first day after its IPO
Bill Ackman thinks shares of his Pershing Square fund are undervalued by the market / Photo: X/NYSE
Billionaire investor Bill Ackman bought shares of his asset management company Pershing Square on the open market, backing the securities on the day they went public.
The hedge fund founder bought 500,000 shares of Pershing Square USA closed-end fund (ticker PSUS) and 800,000 shares of Pershing Square Inc. (ticker PS), which manages the fund. Ackman wrote about it Thursday on social network X. Based on volume-weighted average prices on Wednesday, Ackman may have spent about $40 million to buy the shares, Bloomberg calculated.
Eckman said the closed-end fund's shares are trading at a steep discount: he said the fund has about $49 of cash per share in Pershing Square USA, while on the first day of trading, the shares were trading as low as $40.9 - 18% below the IPO price. In other words, the market priced each share of the fund about 16.5% cheaper than the amount of cash attributable to it. The management company's shares were trading below the $26.25 level at which Ackman sold a 10% stake in 2024 to strategic investors. At the time of that sale, Pershing Square Inc. had about half as many fee-earning assets under management as it does now, he said. On its debut day, April 29, Pershing Square Inc. securities ended the day trading at $24.2, up nearly 1%.
Ackman's Pershing Square Holdings Ltd. closed-end fund, which traded in London and went public in 2014, now trades at a discount to net assets of more than 30%, according to data compiled by Bloomberg.
Closed-end funds often trade at a discount to the underlying value of their assets, the agency explained. However, Pershing Square USA was structured with no performance fee and offered investors a free share of Pershing Square Inc.'s management company for every five shares of the fund they bought. Pershing Square's listing brought in less than the $10 billion Ackman had hoped for: the $5 billion raised was the minimum amount needed to keep early investors who had agreed to participate in the $2.8 billion private placement in the deal, Bloomberg writes.
Shares of management company Pershing Square Inc. jumped 34% on Thursday, while securities in the Pershing Square USA fund jumped 7%.
This article was AI-translated and verified by a human editor
