Bill Ackman’s Pershing Square drew cautious bullish calls from analysts
Investing.com -- Analysts initiated coverage on Pershing Square Inc. on Tuesday with cautious optimism, highlighting the hedge fund giant’s strong long-term returns, permanent capital structure, and scalable business model, while warning that much of the upside was already reflected in the stock price.
Shares in the company edged nearly 1% higher in premarket trading.
Analysts at RBC Capital Markets began coverage with a “Sector Perform” rating and a $40 price target, arguing that Pershing Square’s “liquid alternative” model offered a rare mix of recurring earnings, operating leverage, and long-duration capital.
The brokerage noted that 96% of Pershing Square’s fee-paying assets under management consisted of permanent capital, insulating the firm from redemption pressure and allowing founder Bill Ackman and his team to pursue longer-term investment opportunities.
RBC also pointed to the firm’s lean structure, with just 44 employees and nine investment professionals overseeing roughly $31 billion in AUM at the end of 2025, helping drive fee-related earnings margins of 85% to 90%.
The firm’s track record remained a major attraction for investors. Since inception in 2004, Pershing Square’s flagship strategies had generated annualized net returns of 16.2%, compared with 10.7% for the S&P 500. During the “permanent capital era” between 2018 and 2025, annualized returns climbed to 22.6%, significantly ahead of the index’s 14.3% return.
RBC said Pershing Square’s investment in Howard Hughes Holdings Inc. could become a longer-term growth driver as Ackman sought to reshape the company into a Berkshire Hathaway-style diversified holding company.
Meanwhile, Wells Fargo Securities initiated coverage with an “Equal Weight” rating and a $37 price target, calling Pershing Square “not a typical asset manager” but cautioning that the stock’s valuation already reflected high expectations.
Wells Fargo praised the firm’s differentiated hedge fund model, recurring revenue base, and operating leverage, but warned that uncertainty around future fundraising and the expiration of insider lock-ups in October 2026 could weigh on shares.
The bank also questioned whether investors might have been overestimating the pace of future fund launches after the newly launched closed-end fund, Pershing Square USA, began trading at a roughly 15% discount to net asset value.
Still, Wells Fargo said Pershing Square’s premium valuation was partly justified by its strong historical outperformance, lack of redemption risk, and unique status as the only publicly traded hedge fund with a permanent capital structure.