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Bill Ackman’s Pershing Square USA Ltd. (PSUS) made its long-awaited debut on the New York Stock Exchange on Wednesday, but the launch quickly faltered as shares of the new closed-end fund fell sharply despite Ackman’s large social-media following. PSUS shares tumbled 18% on the day, opening at $42—down 16% from the IPO price of $50—and closing at $40.90.
PSUS priced its IPO and accompanying private placement at $50 per share, raising $5 billion on Tuesday night. The amount was described as the largest-ever for a U.S. closed-end fund. The offering was positioned as a way to deliver hedge-fund-style returns to retail investors.
Ackman said he wanted to model PSUS on Warren Buffett’s Berkshire Hathaway, describing it as a “permanent-capital machine” designed to endure market storms and compound over decades. He told CNBC’s “Squawk on the Street” on Wednesday: “This is the first time someone with $50 could be a long-term shareholder.” He added that retail investors were not being treated the way they often are in similar structures, saying, “Usually, the retail gets cut massively back, the institutions are favored. We did the opposite.”
He also promised Berkshire-style annual meetings where everyday investors could directly question him.
Despite the fundraising, the market response highlighted concerns about whether PSUS can avoid the persistent discounts that often affect closed-end funds. The offering included a feature aimed at boosting retail participation: investors who bought five PSUS shares at the offering price received one free PS share. The structure was intended to help investors benefit from Ackman’s “2% flat management fee,” according to the article.
IPOX Research Associate Lukas Muehlbauer said the giveaway underscored skepticism about whether the closed-end fund structure alone would be enough to attract sustained investor interest. He said: “I would expect decent demand, but the structure with shares of the managing company as a sweetener suggests that the closed-end fund alone may not be enough to secure the desired level of investor interest.”
Closed-end funds often trade below the value of their underlying holdings. Ackman attempted to address this by scrapping performance fees and offering management-company shares as part of the incentive package.
The NYSE debut marked Ackman’s second attempt to launch PSUS. He previously pulled a similar IPO in 2024 after demand reportedly fizzled.
The fund’s design is intended to address a core Wall Street issue: the tendency for capital to become “flighty,” forcing managers to sell at unfavorable times. Unlike open-end mutual funds, which must redeem shares daily, PSUS is structured to lock in investor capital upfront. Investors who want to exit would need to sell their shares to other investors on the exchange, rather than triggering forced liquidations or panic redemptions.
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