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Bill Ackman Is Back: IPO Plans for Pershing Square and a New Fund for Retail Investors

June 2024

Bill Ackman doesn’t quit easily. After his high-profile SPAC ventures stumbled, he’s back with a fresh game plan. This time, he’s not only talking about launching a new fund—he’s aiming to take Pershing Square public through an IPO, and he’s also rolling out a new fund designed specifically for retail investors. The buzz is real, investors are paying attention, and the industry is quietly skeptical.

Ackman’s track record? It’s a mixed bag. Some hail him as a genius, especially after his savvy COVID-19 hedge and big calls like Chipotle. Others remember his tough losses, like on Valeant Pharmaceuticals and that very public Herbalife short. But one thing’s clear: when Ackman moves, the market listens.

What’s Different This Time Around?

This time, Ackman wants to bring Pershing Square, his hedge fund, to the public markets. The goal? Let everyday investors get a slice of his flagship strategy—something usually off-limits unless you’re a big-time institutional investor or ultra-wealthy. Think of it like what Blackstone or KKR have done, but with Ackman’s activist touch.

Alongside the IPO, Ackman’s rolling out a new closed-end fund aimed at retail investors. The idea is to offer “private equity-style returns” without the sky-high fees or multi-year lockups that typically come with private equity. This is a big deal. Private equity usually thrives on exclusivity and long holds, but Ackman is trying to shake up that model.

Why Is He Doing This Now?

Timing is everything. After a lull, the IPO market is waking up again. Investors, especially retail, are hungry for fresh ideas and alternatives. The failure of his past SPAC efforts was partly due to tricky regulations and market conditions. Now, with things shifting, Ackman sees a real window.

I’ve seen this pattern before—after every market slowdown, there’s a rush to create new retail-friendly investment products. Most don’t last, but a few, like ETFs in the early 2000s, completely change the game.

What Stands Out About Ackman’s Approach?

First off, he’s being realistic. No flashy promises of “guaranteed returns” here. Ackman talks about steady growth, long-term compounding, and clear fees. His activist style means he won’t just sit on the sidelines—he’s hands-on, pushing for changes in the companies he invests in. That approach works for some investors and not for others.

Second, the fund’s structure is key. This new closed-end fund will trade on public exchanges, giving investors liquidity that’s rare for private equity-style investments. You won’t be locked in for years—you can sell if you need to. Given how tight liquidity was in 2022 and 2023, that’s a welcome feature.

But heads up: closed-end funds often trade below their net asset value (NAV). That means you might buy in at IPO price and see the value drop below what the fund’s actual holdings are worth. It’s a quirk of the structure and one of the main downsides to keep in mind.

Who Should Consider This?

If you’re used to steady index funds or calm dividend payers, this might feel like a wild ride. Ackman takes big, focused bets and isn’t shy about pushing for change—which can pay off big but also backfire spectacularly. Anyone who remembers the Valeant rollercoaster knows the risks.

But for investors who want an insider’s access to activist investing without the usual million-dollar minimums, this could be a rare chance. Ackman’s big on the “democratization” angle because he knows the old gatekeepers of finance are losing their grip. Retail investors want in, and he’s responding.

Keep These Risks in Mind

This isn’t a guaranteed win. Pershing Square’s performance has been all over the place. After years of struggles, the fund bounced back in 2020—but keeping that momentum going is no small feat. Going public changes incentives, too—there’s pressure to hit quarterly numbers and keep a broader group of investors happy, which can lead to short-term thinking.

Also, the closed-end fund setup isn’t a silver bullet. Even if the IPO pops, the fund might trade below NAV for a long time. This has happened to many funds, even those with strong long-term records.

Then there’s the question of scale. Activist investing usually works best with big bets on a few companies. If Ackman suddenly has to manage billions more from retail investors, can he still find enough great opportunities without watering down returns? History suggests that’s a tough balancing act.

Regulatory and Market Hurdles

The SEC is paying close attention. There’s a fine line between giving retail investors access and exposing them to risks they don’t fully understand. Ackman seems aware of this, stressing transparency and education.

Market timing is another wildcard. If this launches during a shaky market, retail investors might lose patience quickly. Many fund launches underestimate how fickle retail money can be—any sign of underperformance and people could bail fast.

What’s the Bottom Line?

All in, Ackman’s move makes a lot of sense. The financial world is shifting, and retail investors want in on bigger opportunities. If anyone can pull it off, it’s someone with Ackman’s track record and knack for media attention.

That said, don’t get swept up in the hype. If you’re thinking about investing, dig into the details—fees, fund structure, liquidity—and understand that activist investing isn’t a magic fix.

Will this IPO and new fund change the game for retail investors? Maybe. Or it might just be another interesting chapter in Wall Street’s long history of experiments. Either way, it’s definitely worth keeping an eye on.

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