Bill Ackman's newly launched Pershing Square USA fund fell 16% in its initial trading session after completing a $5 billion initial public offering, according to market data.

The closed-end fund represents Ackman's latest investment vehicle, designed to mirror aspects of Warren Buffett's Berkshire Hathaway approach to long-term value investing. The fund went public as part of Ackman's strategy to expand his investment management business beyond his existing hedge fund operations.

The sharp decline in the fund's share price suggests investor skepticism about the new vehicle's prospects or concerns about market conditions for investment funds. Closed-end funds often trade at premiums or discounts to their underlying net asset values, depending on investor demand and market sentiment.

Ackman, who runs the activist hedge fund Pershing Square Capital Management, has built a reputation for taking large stakes in companies and pushing for operational changes. His investment approach typically involves concentrated positions in a small number of companies where he believes he can influence management decisions.

The $5 billion fundraising represents one of the larger closed-end fund launches in recent years, reflecting both Ackman's profile in the investment community and institutional appetite for alternative investment vehicles. The fund's performance in coming weeks will likely serve as a test case for similar structures from prominent hedge fund managers.