NEW YORK, May 31 (Reuters) - Billionaire Bill Ackman's

investment firm is finalizing a roughly $1 billion funding round

with institutional investors and family offices, eyeing an

initial public offering, according to a source familiar with the

matter.

Investors are valuing the firm at $10.5 billion, the source

added.

Roughly $500 million of the funding round will be used to

anchor Pershing Square USA, a new investment portfolio in the

U.S. that will be listed on the New York Stock Exchange and

available to anyone who can invest in the U.S, including retail,

the source said.