Investing.com – Jefferies initiated coverage on Pershing Square USA () with a Buy rating, citing the fund’s exposure to Pershing Square’s core investment strategy and the manager’s performance track record.
The analyst noted that PSUS offers closed-end fund investors access to Pershing Square’s approach, which benefits from the manager’s history of company engagement and asymmetric portfolio hedging. The firm highlighted the absence of a performance fee as a factor that will support longer-term net returns.
PSUS is a U.S. listed closed-end fund that holds large minority positions in 12 to 15 high quality companies. The fund targets businesses that are simple, predictable, and free-cash-flow generative, while also seeking significantly undervalued companies with catalysts to realize value. The fund currently trades at $41.30, near its 52-week low of $40.33, with a market capitalization of $4.13 billion.
Pershing Square has historically been known for high-profile activist campaigns and proxy battles, though engagement typically now occurs behind closed doors. The fund may also utilize asymmetric hedges to protect the portfolio against specific macroeconomic risks and to benefit from market volatility.
Jefferies stated that the discount to net asset value offers an attractive entry point for investors. According to InvestingPro data, the fund maintains a “Good” financial health score, though investors should note it does not pay a dividend. InvestingPro offers 3 additional exclusive tips for PSUS subscribers.
In other recent news, Bill Ackman’s newly listed closed-end fund and alternative asset management company experienced an 18% decline following its initial public offering on the New York Stock Exchange. The IPO of Pershing Square USA Ltd., which also includes shares of , is expected to raise approximately $5 billion. This amount is at the lower end of the targeted fundraising range, with about 85% of the IPO covered by institutional investors. Ackman attributed the decline to retail investors, suggesting they lack experience in investing in IPOs. The $5 billion fundraising total includes a $2.8 billion private placement, as disclosed in filings with the Securities and Exchange Commission. Despite the initial drop, Ackman expressed expectations for the shares to recover. These developments highlight the mixed initial response to the IPO, with significant institutional backing but challenges among retail investors.
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