Bill Ackman PSUs: Investing in Pershing Square's Closed-End Fund

Bill Ackman's Pershing Square Holdings, a closed-end fund, offers a unique investment opportunity for those looking to tap into his successful investment strategies. Pershing Square Holdings is listed on the Euronext Amsterdam and the New York Stock Exchange (NYSE) under the ticker symbol PSQ.

Bill Ackman's investment philosophy is centered around long-term value investing, focusing on companies with strong fundamentals and growth potential. He has a reputation for taking a contrarian approach, often investing in undervalued companies that others may overlook.

Investing in Pershing Square Holdings allows you to gain exposure to Ackman's investment portfolio and potentially benefit from his expertise. The fund has delivered strong returns since its inception in 2015, making it an attractive option for investors seeking to diversify their portfolios.

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Bill Ackman is launching a brand-new investment fund called Pershing Square USA, which will list on the New York Stock Exchange under the ticker symbol PSUS.

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The IPO price of the fund will be $50 per share, which is a significant investment opportunity for those interested in Bill Ackman's investment strategies.

Investors will be required to purchase a minimum of 100 shares, effectively setting the minimum initial investment at $5,000.

This investment fund will be a publicly traded entity, giving investors the chance to buy and sell shares on the open market.

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Pershing Square USA's investment strategy is built on a time-tested approach that has generated impressive returns.

Ackman's fund has a 2,116% total return since its inception in 2004, with a 16.5% annualized return. This is remarkable, especially considering the steep hedge fund fee structure.

The fund's strategy focuses on businesses with predictable free cash flow generation, high barriers to entry, strong balance sheets, attractive valuations, large market capitalizations, great management teams, and low dependence on capital markets.

Ackman aims to identify investments with asymmetric payoff structures, meaning the potential to earn large multiples of cost basis with limited downside risk.

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To achieve this, Pershing Square will build a concentrated portfolio of 12 to 15 stock holdings, all of which are publicly traded large caps.

Here are the key characteristics of the types of investments Pershing Square will target:

Pershing Square is committing to a minimum 10-year holding period, which is a significant commitment to its investments.

Bill Ackman's IPO dream for Pershing Square USA, or PSUS, has seen a significant change in scale. He initially envisioned an IPO of $25 billion, but it's now unclear if that will happen at all.

The IPO timeline is also uncertain, but recent IPOs have gone public within two weeks of starting their roadshow. The pre-IPO roadshow for PSUS just started, so it could potentially happen before the end of July.

Bill Ackman has already seen the benefits of a virtuous cycle play out in his Amsterdam fund. He sold a 10% stake in his management company for $1.05 billion in June.

The Amsterdam fund had been trading at a steep discount, around 35%, which made it attractive to investors. At last check, that discount had narrowed to about 22%, which is still sizable.

In the fund's prospectus, several examples are mentioned with figures based on a $10 billion total initial offering. However, the actual total will depend on investor interest and could potentially be the largest closed-end fund ever established in the United States.