Billionaire investor Bill Ackman is reportedly planning to take both his hedge fund firm, Pershing Square Capital Management, and a new investment vehicle, Pershing Square USA, public early next year, according to the Wall Street Journal, citing sources familiar with the matter.

The proposed move would mark a major milestone for Ackman, whose high-profile activist investment strategies and outspoken commentary on financial and political issues have made him a closely watched figure in both New York and Washington.

Pershing Square USA: Incentives and Structure

The new fund, Pershing Square USA, is expected to be listed on the New York Stock Exchange (NYSE). Investors in the fund may receive free shares in Pershing Square as part of the incentive structure, potentially making the offering more attractive to retail and institutional participants.

Sources indicate that partners could give away up to 10% of Pershing Square shares, which may value the hedge fund well above its $10.5 billion valuation in 2024. While preliminary discussions are underway, the listings could be delayed or canceled depending on market conditions, according to the WSJ.

Background on Pershing Square

Founded in January 2004, Pershing Square Capital Management primarily invests in a concentrated portfolio of roughly a dozen stocks. The firm is best known for activist campaigns, which have included public calls for corporate strategy changes, board seat acquisitions, and other shareholder influence initiatives.

The new listing plans revive hopes for a Pershing Square IPO following last year’s 10% stake sale for $1.05 billion, which was widely seen as a precursor to a potential public offering. A successful listing would place Pershing Square in a select group of publicly traded alternative asset managers, a niche dominated by large private equity firms like Blackstone and KKR.

Hedge Fund IPO Landscape

Public hedge funds have historically faced challenges in the market due to the unpredictability of earnings. While Ackman’s Europe-listed hedge fund, Pershing Square Holdings, has returned nearly 21% this year, other funds have struggled. For example, the British hedge fund Man Group is set to post its third negative year in four years, and Blue Owl Capital, which Ackman has likened to the structure of his own firm, has declined nearly 40% amid credit market concerns.

Despite these challenges, Pershing Square’s dual IPO approach could capitalize on market appetite for high-profile alternative investment vehicles, particularly those led by established and influential managers like Ackman.

Outlook and Market Considerations

The filings for both offerings are still in the preliminary stage, and market conditions will heavily influence the timing and structure of the IPOs. Following one of the busiest U.S. IPO seasons in four years, combined with disruptions from the longest federal government shutdown in history, the timing of public listings remains uncertain.

If executed, these IPOs would further solidify Bill Ackman’s status as a leading activist investor and expand Pershing Square’s visibility among public market investors, potentially reshaping the landscape for publicly listed hedge funds.