Pershing Square Funds Lag S&P 500; USA Fund Trades at Discount

Pershing Square’s listed funds underperformed broader U.S. equities in the first half of the year. Pershing Square Holdings declined about 10% year-to-date through June 9, while the S&P 500 gained roughly 8% over the same period.

The newly launched Pershing Square USA has traded below its initial valuations since an April IPO. The fund, which holds nearly $5 billion, closed at $39.68 on Monday, more than 20% below its $50 IPO price and roughly 15% below its most recent reported net asset value.

Bill Ackman posted on X that about 85% of Pershing Square USA’s capital is invested across 12 companies. Disclosed holdings include Amazon, Microsoft, Uber Technologies, Meta Platforms, Brookfield, Restaurant Brands International, and positions in Fannie Mae and Freddie Mac. Remaining holdings are expected to be reported in the fund’s second-quarter filings.

Pershing Square Holdings manages about $13 billion in net assets. The two listed vehicles show substantial overlap in positions, reflecting Ackman’s preference for concentrated stakes in large-cap growth companies he considers high quality.

Sector exposure has affected performance. The funds’ concentration in a handful of large growth names did not capture gains in semiconductor and memory stocks that have driven much of the recent market advance. Several large holdings, including Meta Platforms and Uber, fell by about 10% year-to-date and weighed on returns; both names rebounded sharply on Monday.

Performance varies by time frame. Pershing Square Holdings trailed the S&P 500 over the 12 months to May 31 and over the past five years, but it outperformed the index over a 10-year period.

Fee structures differ between the vehicles. Pershing Square Holdings charges a 1.5% management fee plus a 16% performance fee. Pershing Square USA charges a 2% annual management fee and does not levy an incentive fee.

Ackman posted on X that Pershing Square USA’s market price is below the value of its underlying holdings and could present a buying opportunity for investors.