Pershing Square (PS) has a highly resilient and differentiated business model, but its valuation appears elevated at current levels, Oppenheimer said in a Tuesday note.

The analysts noted that around 97% of fee paying assets under management are in permanent capital vehicles, mainly closed-end funds that are not exposed to redemptions and typically maintain concentrated equity portfolios over long durations.

Oppenheimer said the structure blends elements of private equity, hedge funds, and business development companies, but stands out for its equity-focused approach and its ability to recycle realized gains into new investments over time.

The performance depends on assumed portfolio returns of about 15% annually, seen as a key but debatable driver of long-term compounding, while noting that fundraising may remain limited as funds trade below NAV, reducing near-term growth visibility and supporting a cautious outlook, the report added.

Oppenheimer initiated coverage with a perform rating.

Shares of Pershing Square were up more than 3% in Tuesday trading.

Price: 36.88, Change: +1.21, Percent Change: +3.39