With this transaction, Ackman aims to introduce a closed-end, equity-oriented fund called Pershing Square USA (PSUS), listed on the New York Stock Exchange as early as next year. He aims to raise $25 billion through this new vehicle, and plans to invest $500 million in its first year. This closed-end fund will provide resilience and liquidity predictability, as investors cannot redeem their shares at any time. In the meantime, we await the release of further information to clarify the fund's intentions and whether it is more attractive than the current Pershing Square Holdings listing in London and the Netherlands.

In addition, asset managers are faced with a compression of fees, notably due to the rise of passive investing. Ackman's bet is that investors will easily pay 2% in fees to invest with him. However, I find it a bit much to charge 2% fees on a concentrated portfolio with low turnover, given that it is easily replicable by an individual. Bill Ackman defends himself by explaining that part of his fund's success is due to bets that cannot be reproduced by the average investor. I'm thinking, for example, of the bet he made just before the pandemic against US corporate credit spreads, which earned him over $2 billion on an initial investment of just over $30 million. What's more, he applies no outperformance fees.

Bill Ackman's performance has been good for some time now, thanks to his latest successful bets, which was not the case a few years ago, notably the 2015-2017 period due to the losses on Valeant Pharmaceutical. His current main investment vehicle, Pershing Square Holdings, listed in London and Amsterdam, has generated an annualized return of 28% over 5 years, compared with 15% for the S&P 500. However, the fund underperforms over 10 years.

Ackman plans to adopt a similar approach to his current portfolio, i.e. a concentrated selection of 12 to 20 stocks (currently 6) of North American growth companies. Bill Ackman's investment philosophy has evolved over the last decade, as he gradually abandoned activism and short-selling following his bad experience with Herbalife. Bill is now more focused on holding stocks longer, reducing portfolio turnover and analyzing company fundamentals. For example, in 2023, the fund manager sold a single position (Lowe's) and initiated a single position (Alphabet).

Looking at his current portfolio, we find companies that need no introduction, but let's anyway:

Chipotle Mexican Grill (20.1% of long portfolio): Chipotle Mexican Grill specializes in the operation of fast-casual restaurants. At the end of 2023, the group had 3,437 restaurants, mainly in the United States. Ackman invested in the fast-casual burrito chain back in 2016. At the time, he had initiated a position in the fast-food company when it was facing food safety issues. The stock had fallen sharply and the American manager saw an opportunity to seize.

Alphabet (19.4%): Alphabet is a holding company organized around 6 core businesses. The best-known is the operation of the Google search engine. The group also operates a video hosting and distribution site (YouTube) and a free online messaging service (Gmail). The bulk of revenues come from advertising. Other divisions include development and production of home automation solutions (Nest Labs), research and development of biotechnologies (Calico) dedicated to the treatment of ageing and degenerative diseases, artificial intelligence research services (Google X), and investment services: management of an investment fund dedicated to young companies operating in the new technologies sector (Google Ventures) and an investment fund aimed at companies already developed (Google Capital), operation of a fiber-optic Internet access network infrastructure (Google Fiber). This is Bill Ackman's last position, initiated in 2023.

Hilton Worldwide Holdings (18.2%): Hilton Worldwide Holdings specializes in owning and operating hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Signia by Hilton, Hilton Hotels & Resorts, Curio Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton and Embassy Suites by Hilton brands. Ackman invested for the first time in the fourth quarter of 2018.

Restaurant Brands International (17.3%): Restaurant Brands International is a fast-food company. It franchises and operates quick-service restaurants serving premium coffee and other beverages and food products. Its segments include Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), Firehouse Subs (FHS) and International (INTL). Under the Tim Hortons brand, it operates in the doughnut/coffee/tea category of the Foodservice segment. Under the Burger King brand, it operates in the quick-service hamburger restaurant category of the foodservice sector. Under the Popeyes brand, it operates in the chicken category of the fast-food segment of the foodservice sector. Under the Firehouse Subs brand, it operates in the specialty submarine category of the fast-food segment of the foodservice sector. Its menu includes premium coffee blends, tea, espresso-based hot and cold specialty drinks, fresh baked goods including doughnuts, bagels and more.

Howard Hughes Holdings (12.7%): Howard Hughes Holdings owns, manages and develops commercial, residential and mixed-use real estate throughout the United States. The company operates through four segments: Operating Assets, Master Planning Communities (MPC), Strategic Developments and Seaport. The Operating Assets segment owns various types of assets, including approximately 8.8 million square meters of retail and office space, 5,587 wholly or partly owned multi-family housing units, as well as other wholly or partly owned properties and investments. The MPC segment plans, develops and manages small towns and large mixed-use communities on the market. The MPC segment includes the development and sale of residential and commercial land, mainly in long-term, large-scale projects. The Strategic Developments segment comprises commercial properties. The Seaport segment is a single-owner, multi-block neighborhood in New York City.

Canadian Pacific Kansas City (12.3%): Canadian Pacific Kansas City Limited, formerly Canadian Pacific Railway Limited, operates a single-line transnational railroad linking Canada, the United States and Mexico, with access to the ports of Vancouver in Atlantic Canada, the Gulf of Mexico and Lazaro Cardenas, Mexico. The company operates some 20,000 miles of rail, providing North American customers with unrivalled rail service and network reach to key markets across the continent. It offers a full range of freight transportation services, logistics solutions and supply chain expertise. It transports ethanol from production areas in the Midwestern United States to consumer markets in the Northeastern United States and Canada. The company serves a variety of markets, including Canadian and U.S. grain, bulk, intermodal, automotive, forestry and industrial products, transshipment and energy, chemicals and plastics. Its 100% subsidiary is Canadian Pacific Railway Company.