Bill Ackman's New Closed-End Fund Trades 20% Below Its IPO Price. Is the Berkshire-Style Bet Broken?
2026-07-18 18:15
•Reuben Gregg Brewer •The Motley Fool
•• ••• Axe Capital view
Ackman's Fund Trading at a Discount: Value or Warning?
Pershing Square USA trades 20% below NAV, but is it a Berkshire clone or a cautionary signal?
Bill Ackman's Pershing Square USA (ticker HHH) launched with big ambitions to mimic Berkshire Hathaway’s operating model, even acquiring an insurance business as a foothold. But unlike Berkshire, which operates actual companies, Pershing Square is a closed-end fund—meaning it trades like a stock but its market price can drift far from the true value of its holdings. That’s exactly what we see now, with a roughly 20% discount to its net asset value. On the surface, that looks like a bargain. But discounts on closed-end funds can persist for years and reflect structural issues, investor sentiment, or liquidity challenges. South African investors keen on following a Buffett or Ackman-style approach should be cautious. Unlike US-listed Berkshire Hathaway, there’s no South African equivalent offering an operating business buffer—Naspers and Prosus remain trading conglomerates but not true operating insurance and financial firms. USD/ZAR could be a better hedge here, as global fund flows will influence the rand alongside these linked assets. The discount may narrow, but don’t assume it will close quickly. this is just my opinion and not financial advice
I would watch Pershing Square closely but avoid buying simply based on the discount. Instead, focus on strong local equities like Naspers or financials such as Standard Bank or Sanlam for more direct exposure to operating companies. Use USD/ZAR as a risk control tool in portfolios exposed to global market swings.
- HHH (Pershing Square USA)
- USD/ZAR
- Naspers
- Standard Bank
- Persistent discount on Pershing Square closed-end fund
- Rand volatility due to global fund flows
6/10
Pershing Square USA, Bill Ackman's closed-end fund, is trading at a 20% discount to its net asset value (NAV) since its IPO. Unlike Berkshire Hathaway, which is an operating company, Pershing Square USA is a closed-end fund that trades on exchanges based on supply and demand. While the discount may seem attractive, investors should understand that closed-end funds often trade at discounts for extended periods, and the discount alone shouldn't be the sole reason for investment.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Reuben Gregg Brewer
Categories: Equities, IPOs
Tickers: HHH, BRK.A, BRK.B
Sentiment: Positive - Described as Ackman's attempt to replicate the Berkshire Hathaway model through an operating company structure. While it has acquired an insurance business to follow the Buffett formula, it's characterized as still being a work in progress. Presented as a successful model for investing alongside a famous investor. The article uses it as the benchmark for comparison, highlighting its operating company structure and proven track record under Warren Buffett's leadership.
Keywords: closed-end fund, Bill Ackman, net asset value discount, Berkshire Hathaway comparison, investment vehicle, IPO underperformance
Insights:
- HHH: Neutral: Described as Ackman's attempt to replicate the Berkshire Hathaway model through an operating company structure. While it has acquired an insurance business to follow the Buffett formula, it's characterized as still being a work in progress.
- BRK.A: Positive: Presented as a successful model for investing alongside a famous investor. The article uses it as the benchmark for comparison, highlighting its operating company structure and proven track record under Warren Buffett's leadership.
- BRK.B: Positive: Presented as a successful model for investing alongside a famous investor. The article uses it as the benchmark for comparison, highlighting its operating company structure and proven track record under Warren Buffett's leadership.