Billionaire Bill Ackman's Pershing Square dual listing landed after raising $5 billion still facing market test

After years of working towards creating a "Buffett-style investment empire" and continuing to build momentum for it, billionaire investor Bill Ackman's Pershing Square has finally launched its initial public offering. But even with raising around $5 billion, this highly anticipated dual listing still faces market scrutiny. As the New York Stock Exchange prepares for the first day of trading for Pershing Square's closed-end fund and asset management company combination IPO, Ackman's latest capital experiment has just begun. The fundraising size is at the lower end of the target range of up to $10 billion, and most of the funds were already secured before the launch. Insiders say that the $5 billion fundraising only met the minimum requirement to keep early investors who had committed to subscribing $2.8 billion involved, and it is far below Ackman's envisioned fundraising target of $25 billion about two years ago. To enhance attractiveness, Pershing Square provided investors with incentives, including offering free shares in the asset management company and not charging performance fees for the closed-end fund. These arrangements did increase market interest, but did not lead to the anticipated fervent buying. Kim Flynn, President of Chicago's XA Investments, stated that giving out shares in the management company was partly to address investors' concerns about potential discounted trading of the closed-end fund in the future, but the bigger question is who will drive demand in the secondary market six months or a year from now. This listing also reflects Ackman's strategic adjustments. After the initial setback with the first closed-end fund attempt, Pershing Square last year shifted focus to increasing its stake in Howard Hughes Holdings as a platform to acquire controlling stakes in other companies in the future. According to data, this transaction has become the largest closed-end fund listing in the United States. Unlike the initial plan to use the closed-end fund IPO as the first step of Pershing Square's overall listing, the two businesses are now debuting simultaneously through a combination deal. Flynn described it as more of an "experiment". In terms of the transaction structure, the current arrangement is more appealing than Ackman's initial proposal. The asset management company will be listed through a direct listing-like method, where most investors subscribing to the closed-end fund will receive 1 share of Pershing Square Inc. for every 5 fund shares purchased; participants in the private placement will receive better conditions, with 1.5 shares of the management company for every 5 fund shares purchased. According to regulatory filings, Pershing Square's total assets under management is around $30.7 billion as of the end of 2025, with $20.7 billion being fee-paying assets. However, market doubts have not disappeared. Data shows that Ackman's London-listed closed-end fund Pershing Square Holdings has underperformed the S&P 500 index over one, three, and five-year periods. Additionally, the fund currently trades at a discount of about one-third to its net asset value. This also highlights the core issue faced by closed-end funds in general, as many products tend to trade at a deep discount over the long term. Analysts believe this is one of the biggest challenges Pershing Square will face after this listing. The closed-end fund market has seen some resurgence recently, especially with a focus on private tech asset products attracting retail investor interest, and the market response to Pershing Square's IPO is better than that of Robinhood Ventures Fund I under Robinhood, but the discount risk is still hard to avoid. Insiders say that institutional investors account for about 85% of the subscription in this offering, meaning retail investors make up around $750 million in demand. Despite the low retail participation, it remains to be seen whether future secondary market performance can support valuation.