There is news out recently that Bill Ackman wants to launch a public fund. We’ve been writing about Ackman for years including a 2007 piece entitled “Will Someone Please List a Hedge Fund in the US?” when we used to talk about the foreign listed hedge funds.
It is too bad he is considering launching a closed-end fund however as it is a terrible structure for the shareholder (but great for the manager as it locks up $). All of the initial investors get hosed on the IPO fee (essentially a front end sales load – there is no reason to ever buy a CEF through an IPO), then the tax efficiency is much worse than an ETF. Not to mention the fund can swing wildly around the NAV (which of course can be a plus or minus).
