Jefferies has initiated coverage on Pershing Square USA (NYSE: PSUS) with a Buy rating. The analyst highlights the fund's exposure to Pershing Square's core investment strategy and the manager's performance track record.
PSUS is a closed-end fund holding 12-15 large minority positions in high-quality companies. It targets simple, predictable, free-cash-flow-generating businesses, as well as significantly undervalued companies with catalysts to realize value.
The absence of a performance fee supports long-term net returns, Jefferies notes. Currently trading at $41.30, near its 52-week low of $40.33, the fund has a market cap of $4.13 billion.
Analysts state the discount to net asset value offers an attractive entry point. Historically known for activist campaigns, Pershing Square now engages behind closed doors. The fund may use asymmetric hedges against macroeconomic risks.
In other news, Bill Ackman's newly listed closed-end fund fell 18% after its IPO. About $5 billion was raised. Ackman attributed the decline to inexperienced retail investors.
