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The billionaire’s new stock-picking fund bombed in its IPO but offers longer-term promise. How Ackman’s four investment vehicles stack up.

Despite a rocky debut this past week, Bill Ackman’s new stock-picking fund looks like the best way to invest alongside the famed billionaire.

Shares of the closed-end fund, Pershing Square USA, came public with a thud on Wednesday, falling 18% from their offering price of $50, to around $41, in initial trading on the New York Stock Exchange. They rallied 4% Thursday to $42.71.

Ackman’s star power—including two million followers on X—weren’t enough to ensure a strong reception for the deal in a market where investors favor low-cost and tax-efficient exchange-traded funds. Closed-end funds like Ackman’s, which tend to trade at discounts to their net asset values, have been tough sells for several years.

With the deal, Ackman now oversees an investment empire that includes two publicly traded equity funds, a publicly traded asset manager, and a publicly traded real estate company that he wants to transform into a “modern-day Berkshire Hathaway.” Each of those offer investors an opportunity to align with Ackman, one of Wall Street’s most prominent figures.

Here are the four investment vehicles: There’s Pershing Square USA, which raised $5 billion from investors this past week, and Pershing Square Holdings, a $15 billion-in-assets European closed-end stock fund with a U.S. listing under the ticker symbol PSHZF. Then there is Ackman’s investment management firm, Pershing Square Inc., which he took public in connection with the new closed-end fund. And finally there is Howard Hughes Holdings, a real estate company that Ackman is using as a platform to build a small-scale Berkshire.

Barron’s ranks the new fund as the most promising of the bunch. It offers a way to invest at a discounted price in a concentrated portfolio of what likely will be a dozen high-quality growth stocks.

As a closed-end fund, Pershing Square USA issued a fixed number of shares, which now trade on the NYSE. Closed-end shares can trade at a discount or premium to portfolio value, based on investor demand. We estimate the current discount at about 12% at a stock price of almost $43, given that the fund started with about $49 a share of cash to invest, after deducting underwriting fees on the deal.

Most closed-end funds trade at discounts to their portfolio values, in part because investors can’t redeem shares from the manager. That means the Pershing Square USA discount could persist. One negative is a high annual management fee of 2%, creating a hurdle for Ackman to top low-fee index funds.

A confident Ackman told CNBC that his fund heralded a “rebirth” of closed-end funds. That’s an overstatement. His deal got done because he offered investors a bonus of one share of his management company for every five shares purchased of Pershing Square USA.

Ackman has said that the investments in the new fund likely will be similar to those in the European closed-end fund, which holds such stocks as Amazon.com, Alphabet, Meta Platforms, Brookfield, Uber Technologies, and Restaurant Brands International.

Ackman has a strong record over the past eight years, handily topping the S&P 500 based on his European fund. But he’s behind the index this year by about five percentage points based on recent results. Assuming Ackman can return to form, investors would generate good returns.

Howard Hughes, the next-most-appealing Ackman vehicle, is a work in progress. It could take several years for the Ackman transformation to take hold, but investors now can buy into it at a depressed price.

The shares trade around $62, near a 52-week low and way below a high of $91 in November. The market value is about $3.5 billion.

Two positives: Investors can buy the stock at a big discount to the $100 a share Ackman paid for nine million shares nearly a year ago, when he took control of the company; his firm now owns about half the stock. And Howard Hughes has valued its real estate portfolio at over $100 a share.

The company owns a mix of real estate, including office and multifamily, and sells land to home builders for development in several markets, including Houston, Las Vegas, and Phoenix.

“The stock market never gave it the value it deserved,” Ackman said in a recent investment presentation. The problems, he said, include a diversified real estate portfolio in a market where investors like focus, a lack of a dividend, and lumpy earnings.

As part of the Berkshire-style transformation, Howard Hughes agreed to buy a property-and-casualty insurer, Vantage, for $2.1 billion in a deal that is due to close in the current quarter. The strategy is to harvest cash flows from the real estate portfolio and write more insurance policies and make investments. If the strategy gains traction, the stock should appreciate.

We rank the Pershing Square Holdings fund as third-most-promising part of the group. It is a European version of the new Ackman fund. It has been around for more than 10 years. It trades mainly in London and lightly in the U.S. under the ticker PSHZF, at around $57 a share.

The appeal here is that shares trade at a big discount of about 30% to the portfolio value.

The negatives are a high fee structure—a 1.5% annual base fee and an incentive fee of 16%, with no hurdle rate. It’s also more complicated from a tax-reporting standpoint for U.S. investors, and some brokerage firms don’t let their retail clients buy it because it’s an overseas fund.

Finally there’s Ackman’s management company, Pershing Square Inc. It looks richly valued relative to other alternative-asset managers, like Blackstone or KKR.

At Thursday’s price of $28 a share, the firm is valued at $11 billion with about 400 million shares outstanding, and it now has some $20 billion in fee-paying fund assets. Its ratio of assets to market value is high compared with peers. Its market value looks high, at 30 times its base annual fees. The main positives are high profit margins and a sticky asset base.

Pershing Square has key-man risk, given that the 59-year-old Ackman is critical to its success and its ability to raise new money.

In short, it may be best to steer clear of the firm. Stick with the new fund and Howard Hughes.

Wall Street traders post triple gains of European rivals

Europe’s biggest investment banks missed out on gains from commodities in quarter marked by oil swings

Europe’s largest investment banks captured barely a third of the trading gains posted by Wall Street rivals in the first quarter amid wild market swings, with continental lenders held back by their limited presence in commodities trading and a weaker dollar.

UBS, Deutsche Bank, BNP Paribas, Société Générale and Barclays reported growth of 6 per cent in equities and fixed income, currencies and commodities (FICC) trading during the quarter. Together, the banks posted €13.5bn of trading revenues.

Their performance significantly lagged behind Wall Street’s largest lenders — JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America — which booked a collective $43bn in trading revenues, a 17 per cent jump on the previous year, according to data from Keefe, Bruyette & Woods.

The meagre trading gains delivered by European lenders came despite the conflict in the Middle East and concerns about AI disruption triggering significant market volatility during the first three months of the year — conditions that typically boost banks’ trading desks.

They missed out on the market swings because of some European banks’ decisions to exit their commodities businesses after the financial crisis sparked tighter regulations. A stronger euro also eroded revenues earned in US dollars for European lenders during the quarter.

“European investment banks fell short largely due to the weaker dollar and their lack of commodities exposure relative to US banks,” said Thomas Hallett, an analyst at KBW.

He added that US banking deregulation may also have played a role because US banks’ “capacity to compete just went up yet another notch”.

European banks trail US peers in trading revenues. Since Donald Trump returned to the White House last year, US regulators have eased some bank capital rules and rolled back parts of the post-financial crisis regulatory framework, boosting US lenders’ competitive advantage over more tightly constrained European peers.

France’s SocGen was the worst-performing European bank in trading terms, with revenues at the unit falling 4 per cent on the same period a year earlier, weighed down by an 18 per cent slump in FICC revenues.

SocGen’s chief executive Slawomir Krupa said the poor performance reflected the unit’s “business mix”, which has a fixed-income division that is tailored more towards rates trading. It said its European rates business faced “challenging commercial and market conditions”.

Andrew Coombs, an analyst at Citi, said: “It would appear SocGen is losing market share even in its home region and it raises questions whether the current business mix is the correct one, as it does not play to where the structural growth opportunities currently reside.”

Deutsche Bank — which no longer has an equities or commodities trading business — and Barclays both posted broadly flat revenues in their fixed income divisions.

UBS, whose markets business is geared towards equities rather than fixed income, was the standout performer during the quarter. The Swiss lender delivered a 31 per cent rise in total trading revenues — the biggest gain of any large investment bank in Europe or the US during the period and a record quarter for UBS.

However, the relatively weak performance of European banks’ trading desks underscores how the sector is continuing to lose ground to bigger US rivals, which benefit from greater scale and are less constrained in deploying risk.

While European policymakers have long been calling for more consolidation across the EU’s fragmented banking market — which retrenched in the wake of the 2008 financial crisis — executives say the sector has been plagued by regulatory hurdles and political resistance.

German Chancellor Friedrich Merz’s approval rating has plunged along with economic growth expectations.

The DAX 40 Index dropped 5% since Feb. 28, as Germany, vulnerable to energy shocks, faces a likely recession.

Despite challenges, investors eye oversold stocks like SAP and Rheinmetall—both down 30%—and defense/infrastructure plays.

The Iran war kicked Germany when it was trying to get up. There might still be stocks worth buying in Europe’s top economy and across the continent.

The moderate exuberance that prevailed a year ago as Friedrich Merz ascended to the chancellorship and Berlin released its constitutional “debt brake” has given way to gloom. The closely watched Ifo Business Climate Index plunged in April to its lowest level since pandemic days. Merz’s government cut 2026 economic growth expectations in half, to 0.5%.

Merz’s political honeymoon, such as it was, is definitively over. Polls show him as “the most unpopular chancellor in 30 years,” with approval around 20%, says Jeremie Peloso, chief strategist for Europe at BCA Research. His Social Democratic coalition partners have fallen further, to an “existential edge,” notes Carsten Brzeski, global head of macro for ING Research. “The verdict on this government’s ability to push reforms is unfortunately disappointing,” he says.

No wonder the DAX 40 Index of German stocks has dropped 5% since the U.S. and Israel attacked Iran on Feb. 28, while the S&P 500 index has gained more than 3%.

Germany’s economy is one of Europe’s most vulnerable to the latest energy shock because it has shifted more slowly away from fossil fuels and depends more on power-guzzling heavy industry. “Germany and the United Kingdom are the most likely European countries to fall into recession,” Peloso says.

Berlin has one whopping advantage, though: debt to gross domestic product at about half of its large neighbors’ levels. Merz’s promised “fiscal bazooka” is already cushioning the war damage by pumping euros into infrastructure and defense. More spending could follow in extremis.

Most importantly, equity investors buy companies, not countries, especially in an export powerhouse like Germany. One big German name that looks oversold is software giant SAP, says Michael Field, European equity strategist at Morningstar. Adding wartime decline to the preceding “SaaSpocalypse,” the shares have sunk 30% this year.

Field is also high on German armaments mainstay Rheinmetall, Morningstar’s top pick in a European defense sector that has counterintuitively declined as the U.S. depletes munitions in the Persian Gulf. Rheinmetall shares are likewise off 30% from a January peak.

Sebastian Schrott, portfolio manager for European equities at T. Rowe Price, has also “added to preferred defense names” as valuations drop. His most preferred is Norwegian missile maker Kongsberg Gruppen. He bought “a bit” of Rheinmetall, as well.

Schrott is betting on Merz’s infrastructure spree through SPIE, a French-domiciled specialist in energy and communications equipment that earns the largest chunk of its revenue in Germany. While Germany lacks headline artificial-intelligence names, it is deep in suppliers to utilities that are rushing to provide power for mushrooming data centers, Peloso points out. The outstanding example is Siemens Energy, whose shares have surged fivefold over the past 18 months, vaulting the company to No. 4 in the DAX.

Investors are conducting an “interesting debate” on whether the Iran war could actually be positive for European banks, Schrott says. With continental inflation tame, the European Central Bank looked to be headed prewar toward interest rates too low for lenders to earn healthy margins. The conflict has shifted expectations to two or three increases from the current benchmark rate of 2%, says Morningstar’s Field.

Shares in German flagship Deutsche Bank have cratered 20% this year. Another one to watch, maybe.

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