Pershing Square cuts manager’s performance fee

headshot of Bill Ackman

Pershing Square Holdings says that its investment manager (Pershing Square Capital Management, L.P) has proposed and the board has approved some changes to the fund’s investment management agreement that will reduce the performance fees paid by Pershing Square Holdings from this year.

The amendments to the management agreement are to its variable performance fee provision. The position is complicated but basically there was a provision that reduced the fee that Pershing Square Holdings had to pay if the manager was earning performance fees from other funds that were (i) invested in public (listed) securities and (ii) not publicly traded in the US. However, that reduction did not kick in until the manager had earned a total of $120m of these fees – that was because the manager had paid about that amount from its own pocket to get Pershing Square Holdings listed in London.

With $84m of these fees earned so far, that amount had been reduced to $36m as of 31 December 2023.

The amendments to the management agreement approved by the board include:

A change so that Pershing Square Holdings’ performance fees are reduced by performance fees paid to the manager in respect of funds that are publicly traded in the United States and they are going to be reduced by 20% of any management fees that the manager earns from other Pershing Square funds that invest in public securities that do not have performance fees. In addition, the manager is waiving the right to receive the $36m outstanding balance of unrecovered IPO costs.

Pershing Square to launch a new NYSE-listed US closed end fund

The manager also announced that it intends to launch a new NYSE-listed US closed end fund, Pershing Square USA, Ltd. (PSUS). Today, PSUS filed a registration statement for its initial public offering with the US Securities and Exchange Commission (available at

With these new amendments to the IMA and the launch of the new closed end fund and potential in the future for other new funds, PSH shareholders will benefit from reduced performance fees going forward,” Bill Ackman, CEO of Pershing Square Capital Management stated. Anne Farlow, chairman of PSH added, “The board has approved these amendments because we believe that the reduction in performance fees will enable PSH to generate higher long-term returns for its shareholders.”

PSH : Pershing Square manager’s performance fee

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