Pershing Square Holdings, Ltd. (LN: PSH) announced that the initial public offering of Pershing Square USA, Ltd. (NYSE: PSUS) closed with an aggregate offering size of $5 billion. The company said its shareholders will benefit from reduced performance fees as a result of the transaction.

Under PSH's amended Investment Management Agreement, the company's performance fees are reduced by 20% of management fees earned by its investment manager from funds like PSUS that do not have performance fees or allocations. The fee reduction provision was adopted in February 2024.

The IPO of PSUS occurred alongside the initial public offering of Pershing Square Inc. (NYSE: PS), the parent company of PSH's investment manager, Pershing Square Capital Management, L.P.

"We are pleased that PSH shareholders will benefit from reduced performance fees going forward as a result of the successful completion of the IPO of PSUS, our new U.S. listed fund," said Bill Ackman, CEO of Pershing Square Inc.

PSH Chairman Rupert Morley said the fees generated by PSUS will enable PSH to generate higher long-term returns through the performance fee offset mechanism introduced in the 2024 Investment Management Agreement amendment.

The fee reduction supplements an existing provision that reduces PSH's performance fees by 20% of any performance fees and allocations earned by Pershing Square from certain non-PSH funds.