Ackman’s Pershing Square targets $5 billion IPO for closed-end fund

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By Svea Herbst-Bayliss

(Reuters) -Hedge fund manager Bill Ackman aims to raise $5 billion for a new U.S.-listed closed-end fund that will debut at the same time he plans to list his hedge fund firm, Pershing Square Capital Management, according to two people familiar with the matter.

The billionaire investor, who cemented his reputation as an activist investor by pushing companies ranging from Chipotle Mexican Grill to railroad Canadian Pacific that is now called Canadian Pacific Kansas City, is starting his first new fund in years and plans to let investors own a piece of his successful hedge fund.

The closed-end fund, first prepared for a listing last year, is expected to mimic Ackman’s existing hedge fund but offer lower fees and quicker access to capital. This would make it appealing to a wide pool of investors, including pension funds, endowments and retail investors who are normally excluded from hedge funds.

The sources said the initial public offering of the closed-end fund will occur at the same time as the initial public offering of Pershing Square Capital Management, and that both could happen in early 2026.

News of the fundraising target was first reported by Bloomberg News.

Investors in the new fund would also receive free shares of Pershing Square as a sweetener, said the people who are not permitted to discuss the private plans.

The people warned that the plans were still being discussed and could change depending on market conditions.

A spokesman for Pershing Square declined to comment.

Ackman laid the groundwork for the closed-end fund in early 2024 but scrapped the launch of Pershing Square USA in July 2024, days before it was slated to begin trading on the New York Stock Exchange.

He downsized the initial public offering plans several times after people familiar with the matter initially suggested the fund could raise as much as $25 billion in assets, making for one of the biggest IPOs in years.

This year Pershing Square bought nearly half of real-estate firm Howard Hughes.

Pershing Square now has some $21 billion in assets under management, with the bulk invested in Pershing Square Holdings, the closed-end fund listed in London. That fund has returned 17.2% since January and posted double-digit returns in 2024 and 2023.

In recent years, Ackman has become almost as famous for his musings on social media platform X as his investment prowess, industry analysts and investors have said. On X the fund manager has some 1.8 million followers and often weighs in on topics ranging from political races, higher education, the dangers of sugary foods, and most recently dating advice.

(Reporting by Svea Herbst-Bayliss with additional reporting by Ateev Bhandari in Bengaluru; Editing by Arun Koyyur and Deepa Babington)