Business/Fund Description
Orchestrated by Bill Ackman and managed by Pershing Square Capital Management, L.P. (PSCM, or "The Manager"), Pershing Square USA, Ltd. was positioned as a vehicle to democratize institutional-grade activist investing for retail participants while securing permanent capital for the manager.
Pershing Square USA, Ltd. is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940 as a non-diversified, closed-end management investment company. Rather than issuing and redeeming shares daily at NAV like an open-end mutual fund or exchange-traded fund (ETF), PSUS has a fixed pool of capital. This structure is designed to isolate the investment manager from retail redemption pressures, allowing for long-term capital allocation.
The fund’s organizational architecture is tied to a multi-tiered corporate structure. PSCM serves as the investment manager of PSUS. PSCM itself is a wholly owned subsidiary of Pershing Square Inc. (PSI), which completed its statutory conversion from a partnership (Pershing Square Holdco, L.P.) into a Nevada corporation and went public concurrently with the PSUS listing on April 29, 2026. The table below summarized the functions of each related entity of the Pershing Square enterprise.
Capitalization
While the common shares trade publicly under the ticker PSUS, the trust's capital structure also features a private class of preferred shares. Specifically, PSUS issued 1,000,000 shares of 7.50% Series A Cumulative Preferred Shares.
According to Schedule 13D filings, these Preferred Shares are 100% beneficially owned by Pershing Square PSUS Holdings, LLC, an entity controlled by PSI and PSCM affiliates. The Preferred Shares carry an aggregate liquidation preference of $50 million ($50.00 per share).
Shareholder Registry at IPO
As of late May and early June 2026, formal Nasdaq 13-F filings for major institutional common stock holdings are not yet fully compiled, as is standard during the initial quarterly reporting lag. However, the foundational capital allocation can be reconstructed through registration statements and transaction disclosures.
A significant portion of the fund's capital—$2.8 billion out of the $5 billion total raised—was secured through private placements before the IPO. According to the SEC registration statements, these non-disclosed institutional investors are broken down by category:
Family Offices: 30% of the private placement allocation.
Pension Funds: 25%
Insurance Companies: 22%
Ultra-High-Net-Worth Individuals: 12%
As of an early May 2026 Schedule 13G filing, the Teacher Retirement System of Texas is the largest publicly disclosed institutional investor in the common stock.Stake: 10.3% of the outstanding common shares. Total Shares: 10,270,000 common shares.
Bill Ackman’s management company, through Pershing Square PSUS Holdings, LLC, took a significant stake in the fund to align interests and secure governance rights, as detailed in their Schedule 13D filing.
Preferred Shares: 1,000,000 shares (100% of the 7.50% Series A Cumulative Preferred Shares, an investment of $50 million).
Common Shares: 4,000,000 shares (representing less than 5% of the outstanding common shares, which includes a $100 million common share anchor investment)
To defend the stock price and counter the post-listing market pressure, Bill Ackman executed personal open-market purchases of 500,000 PSUS common shares and 800,000 management company shares.1 This intervention was designed to send a clear signal to the market that the shares were undervalued relative to the underlying cash and equity positions.
Jack Landsmanas, President of Corporativo Kosmos, was a key anchor investor, representing significant high-net-worth and corporate interest out of Mexico.
Investment Strategy and Portfolio Deployment
Investment Strategy
The investment strategy is basically what Bill Ackman has been pitching. More details can be read from the INVESTMENT OBJECTIVE, STRATEGY AND POLICIES in the prospectus:
Acquiring long-term, large minority stakes in 12 to 15 high-quality, predominantly North American-listed, large-capitalization growth companies at attractive valuations during periods in which the Manager believes they have underperformed their potential and/or when the Manager believes they are undervalued because the market underestimates their potential or overestimates the impact of certain negative factors on their businesses.
PSUS, alongside the other core funds, will accumulate large minority stakes over time. Such stakes will vary in size depending on the size of the portfolio company and the Manager’s assessment of potential for loss versus opportunity for gain. Generally, the Manager seeks to accumulate positions of a size across its core funds that enable it to be a significant and influential shareholder, typically making it the largest, or among the largest, active shareholders (i.e., excluding passive investors such as index funds).
The Company intends to invest principally in companies with simple, predictable, and free-cash-flow generative businesses, strong balance sheets, and exceptional management and governance, in industries with significant barriers to entry and limited exposure to extrinsic factors it cannot control. They are pretty much all value investing goodies (except for large capitalization):
Simple, predictable, and free-cash-flow-generative. The Manager will generally seek investments in companies with a proven track record of growth and free cash flow generation, and predictable future financial performance that it expects will generate strong, sustainable growth in cash flows over the long term.
Formidable barriers to entry. The Manager will generally seek investments in companies that have long-term sustainable competitive advantages, significant barriers to entry, or “wide moats” around their business, and low risks of disruption due to competition, innovation or new entrants.
Limited exposure to extrinsic factors. The Manager will generally seek investments that are not materially negatively affected by macroeconomic factors, commodity prices, regulatory risks, interest rate volatility and/or cyclical risk.
Strong financial position. The Manager will generally seek investments in companies that are conservatively financed relative to their free-cash-flow generation and their underlying asset values.
Minimal capital markets dependency. The Manager will generally seek investments in companies that generally do not need to raise equity capital to fund their businesses.
Large capitalization. The Manager will generally seek investments in companies with large enterprise values and significant long-term growth potential.
Attractive valuation. The Manager will seek to make investments in companies at a discount to their intrinsic values with the businesses operated ‘as-is,’ and at a potentially substantially greater discount relative to their value if the businesses were optimized.
Exceptional management and governance. The Manager will generally seek investments in companies that have trustworthy, talented, experienced, and highly competent boards and management teams. The Manager may also seek investments in companies where it believes it can be a catalyst for effectuating corporate change through active corporate engagement.
The Manager looks for opportunities to assist portfolio companies in accelerating growth, increasing efficiency, improving capital allocation, managing through challenges and otherwise improving performance in order to generate long-term value.
The Manager is a long-term investor and pursues a long-term investment strategy in which it generally makes investments for its funds with the expectation of holding the investment for multiple years and does not typically engage in short-term trading of the securities of the companies in which its funds invest.
While the Manager is comfortable making investments in a wide range of industries and asset classes, it generally prefers investments in simple businesses or assets that generate cash flows that can be estimated within a reasonable range over the long term. In seeking investment opportunities, the Manager is willing to accept a high degree of situational, legal, and/or capital structure complexity in the Company’s investments if it believes that the resulting complexity allows for a bargain purchase.
The Manager will generally seek to make investments in three broad categories of opportunities: (i) businesses that generate relatively predictable, growing, free cash flows, (ii) businesses or assets that the Manager believes are significantly undervalued and often have a catalyst to realize value, and (iii) mispriced probabilistic securities or investments where the Manager believes that the market price of a security or other investment under- or over-estimates the probability of a favorable change in interest rates or credit conditions, volatility and movement in markets, exchange rates or commodity prices, the outcome of a legal decision, contract or patent award or such other event that is expected to lead to a significant change in the valuation of such security or investment.
The Manager intends to concentrate the Company’s assets in a relatively limited number of investments because the Manager believes that (i) there are a limited number of attractive investments available in the marketplace at any one time, and (ii) investing in a relatively modest number of attractive investments about which it has detailed knowledge provides a better opportunity to deliver superior, risk-adjusted, long-term returns when compared with a highly diversified portfolio of investments it can know less well.
The Manager complements its core investment strategy by seeking to identify and execute upon asymmetric hedges in order to protect the investment portfolio against specific macroeconomic risks, and to capitalize on market volatility.
The Manager typically structures these hedges using asymmetric instruments such as options and credit default swaps, which offer the opportunity for large gains (relative to the individual asymmetric instruments and the size of the Company’s investment portfolio, taken as a whole) if potential risks occur without exposing the Company to significant costs or meaningful losses (relative to the size of the Company’s investment portfolio, taken as a whole) if such risks do not occur, as the amount of capital at risk is typically expected to represent a small, single-digit percentage of the Company’s total assets.
The Manager has historically, and expects to continue to, reinvest profits from asymmetric hedges during periods of market disruption by increasing its funds’ investments in existing portfolio companies and by occasionally acquiring new positions, taking advantage of the depressed valuations of common stocks that typically occur during market disruptions.
The Manager believes its opportunistic hedging strategy is highly synergistic to its core investment strategy and is a superior alternative to holding a large cash position or maintaining a continuous hedging program, both of which can be a significant drag on long-term performance.
The Manager has substantial experience in negotiating relevant agreements for derivative transactions, and has longstanding relationships with the counterparties to such agreements, allowing it to successfully identify and execute hedges and other derivative transactions on a timely basis over multiple market cycles.
Leverage Policy and Asymmetric Macro Hedging Strategy
While PSUS intends to operate primarily as a concentrated equity fund, the manager possesses broad discretion to employ both structural portfolio leverage and macro-level hedging overlays to manage downside risks and enhance capital appreciation:
Leverage Targets and Intentions: The manager is authorized to utilize bank borrowings, issue debt securities, or issue additional preferred shares to establish portfolio leverage. Management intends to carry a structural leverage ratio of approximately 15% to 20% over time. This leverage will be built out in addition to the initial $50 million of Series A Preferred Shares. While this leverage has the potential to amplify long-term returns, it will structurally increase the volatility of both the fund’s NAV and its secondary market price.
Asymmetric Macro Bets: PSUS represents the first U.S. registered closed-end fund within the Pershing Square ecosystem designed to implement the firm's signature asymmetric macro hedging strategy.5 Rather than maintaining a continuous, high-cost hedging program or holding drag-inducing cash reserves, PSCM will opportunistically execute asymmetric bets to protect the portfolio against specific macroeconomic shocks and capitalize on market volatility. These positions are structured using highly convex, asymmetric instruments such as options and credit default swaps (CDS).
Historical Skew and Capital Reinvestment: This hedging framework relies on limited upfront premium and carrying costs, capping the downside while offering the potential to earn explosive, multi-fold returns during system-wide crises. Once monetized, the proceeds of these asymmetric macro bets provide the fund with abundant liquidity during market disruptions, allowing the manager to aggressively purchase durable equities at steep valuation discounts. This opportunistic strategy is backed by the firm's historic hedging track record, such as the famous 2020 COVID-19 credit default swap trade which converted a $27 million outlay into $2.6 billion in cash, alongside subsequent interest rate swaptions and macro rate-change trades.
Fee Mechanics
Management Fee: PSUS charges a flat annual management fee of 2.0% of NAV, billed quarterly at 0.50%.
Performance / Incentive Fees: PSUS does not charge any performance fees or incentive allocations.
Operating and Admin Expenses: Estimated at 0.20% of NAV annually, covering auditing, legal, compliance, and trustee costs.
Aggregate Total Expense Ratio: 2.20% of NAV
The fee is definitely high when compared against Vanguard S&P 500 index ETF VOO( 0.03%) or SPY (0.0945%).
To construct a comprehensive buy-side investment thesis, we can compare PSUS with other closed-end equity funds. Key benchmarks include the Adams Diversified Equity Fund (NYSE: ADX), one of the oldest listed closed-end equity funds in the U.S. market, and PSH, Pershing Square’s own European closed-end vehicle.
Why investing in PSUS?
Bill Ackman is a great value investing investor with an amazing track record in predicting macro events:
MBIA (Macro-Adjacent: The 2008 Financial Crisis)
The 2020 COVID-19 Credit Crash Hedge
The 2021–2022 Interest Rate Swaptions (Inflation Hedge)
The 2023 30-Year US Treasury Short
Besides MBIA, I also love his extensive research or insightful bets on:
MBIA (read the book The Confidence Game)
Herbal Life (HLF) (although the short bet didn't go well due to some other irrational investors betting against him) See the movie Betting on Zero for details.
Chipotle (CMG): Ackman recognized that Chipotle’s brand loyalty, lack of franchising (meaning strict corporate control over a turnaround), and unit economics were still structurally sound. He viewed the food safety crisis (series of severe E. coli and norovirus outbreaks) as a temporary, solvable issue
Alphabet (GOOGL, GOOG)
Mcdonalds (MCD): pitched its great real estate value
Brookfield (BN)
General Growth Properties (GGP) The Bankruptcy Masterstroke (2008–2014)
He is also a righteous and brave man as evidenced from his actions on MBIA and Herbal Life.
PSUS allows me to leverage Bill Ackman's exceptional investment skills at a cost that is still reasonable: ~2% on NAV annually. I see this as reasonable given the use of leverage can potentially neutralize the negative impact from this fee, e.g. 20% debt to equity ratio with a spread return of 10% can already cover the 2% fee. That is in additional to some occasion macro bets.
Compared to the Manager (PSCM), which is 100% owned by Pershing Square Inc. and can be invested with the stock symbol PS, the key-man risk is lower. If anything happens to Bill Ackman or Ryan Israel, the Manager would be mostly toasted given its valuation relies on these key men being in place to manage the portfolio and more importantly, raising more assets under management for the Manager. On the other hand, PSUS would still have its stock portfolio to support its valuation, and the Manager can potentially dissolve the fund to allow investors to recoup their money.
Howard Hughes Holdings Inc (HHH) is another company that I would bet on because of Bill Ackman (a brief writeup). It has even lower key man risk given its operating business has a lot of intrinsic value compared with the stock price (arguably significantly higher than the stock price). And if successful, it can really be another Berkshire Hathaway.
That being said, given the historical record of the similar fund PSH trading in London with a persistent NAV discount (25-30%), it's better to only buy PSUS when the NAV discount is at least 15-20% (Bill Ackman himself said it should be traded at premium, all power to him!). It's nice to have a margin of safety :)
References
Official website (for up-to-date NAV and other news): https://www.pershingsquareusa.com/
2026/04/14 Pershing Square CEO Bill Ackman and CIO Ryan Israel on Pershing Square USA and Pershing Square Inc (video)
2026/04/29 Bloomberg Podcast: Pershing Square's Ackman Talks IPO, State of Markets (video)
2026/04/30 PSUS IPO prospectus
2026/05/19 Yet Another Value Podcast: Why $PSUS deserves a premium to NAV and $PS deserves a premium multiple | Marlton's James Elbaor (video)
About Bill Ackman
Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff Hardcover – January 1, 2010 by by Christine S. Richard
2012/11/27 William Ackman: Everything You Need to Know About Finance and Investing in Under an Hour | Big Think (video)
Betting on Zero is a 2016 American documentary directed by Ted Braun. It investigates the allegation that Herbalife is a pyramid scheme, and follows Bill Ackman's short investment in Herbalife, which is ostensibly a billion-dollar bet that the company will soon collapse
Pershing Square Capital Management, L.P. – Annual Presentation – Slides https://pershingsquareholdings.com/events-presentations/
Pershing Square Holdings Annual Reports (read the LETTER TO SHAREHOLDERS)
No comments:
Post a Comment