Bill Ackman Clarifies 6.6x Asset Coverage and Fee Structure Amidst Pershing Square's Strategic Expansion

New York, NY – Billionaire investor Bill Ackman has issued a clarification regarding a key financial metric and fee structure, stating on social media, "To be clear, 66 X assumes no fees." The tweet, posted by the CEO of Pershing Square Capital Management, appears to refer to the firm's robust financial positioning and the innovative fee model of its new investment vehicle.

The "66 X" figure likely pertains to Pershing Square Holdings (PSH), the publicly traded arm of Ackman's firm, whose debt is reported to be covered 6.6 times by total assets. This metric, highlighted in Pershing Square's February 2025 Annual Investor Presentation, underscores the firm's conservative leverage levels and strong asset backing. Such high asset coverage is a critical indicator of financial stability for investors.

The "assumes no fees" component of Ackman's tweet directly aligns with the radical fee structure of the recently announced Pershing Square USA Fund (PSUS). This new closed-end fund, aimed at retail investors, is designed to charge zero management fees for its initial 12 months and will never levy performance fees. This approach marks a significant departure from traditional hedge fund models, seeking to attract a broader investor base.

These clarifications come amidst a period of strategic expansion for Ackman's investment empire. In early June 2024, Pershing Square Capital Management sold a 10% stake for $1.05 billion, valuing the management company at $10.5 billion. This valuation was approximately 64% of its $16 billion in funds under management at the time, indicating strong market confidence in Ackman's future growth prospects.

The proceeds from this stake sale are intended to anchor new strategies and fund launches, including the PSUS. The firm also plans a potential stock-market listing for the management company as early as late 2025. These initiatives are designed to secure "permanent capital" and potentially reduce performance fees for existing Pershing Square funds, enhancing long-term stability and profitability for the firm and its investors.