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BREAKING NEWS
Bill Ackman, who now requires three separate NYSE tickers to satiate his Warren Buffett cosplay fantasies, finally took his fund public on Wednesday.
The Pershing Square founder priced his long-awaited dual IPO at $5 billion, which sounds impressive until you remember that two years ago, he was talking about raising $25 billion, then $10 billion, and eventually landed at the low end of a range that was already a concession. In Ackman terms, this is the equivalent of announcing you’re buying the building and then negotiating down to a studio.
The structure is classic Bill: two separately traded entities, PSUS and PS, one giving retail investors exposure to the portfolio and one to the management business itself. No performance fees. Bonus shares linking the two together. Retail investors explicitly favored over institutions. “Usually, the retail gets cut massively back,” Ackman said on CNBC Wednesday morning. “We did the opposite.” Even in an IPO, the man cannot resist being the protagonist.
About that third ticker: Ackman already holds a controlling interest in Howard Hughes Corp (HHH), which he also announced would be pivoting to a Berkshire-style permanent capital vehicle. That plan was going great until the Howard Hughes board sued him to stop it. So yes, Wednesday’s IPO is technically Ackman’s second attempt at building the next Berkshire. He has never been the type to take a hint.
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That said, the underlying case for PSUS is genuinely strong. Since 2004, Pershing Square has generated cumulative net returns north of 2,600%, against roughly 836% for the S&P 500. The macro hedging record holds up too: a $27 million credit protection trade in early 2020 returned approximately $2.6 billion within weeks. That is not a typo.
The market appeared to disagree slightly, as PSUS closed down more than 17% on Wednesday.
Whether Ackman can actually build the next Berkshire is a question only time answers. What Wednesday confirmed is that when one board sues you for trying, you simply go raise $5 billion and do it yourself.
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