Letter to Shareholders in the 2025 Annual Report

Ackman contended that stock market dynamics have become distorted by highly-leveraged, short-term investors whose forced selling during downturns creates irrational price dislocations in even the largest companies. He argued this mismatch between perpetual business interests and temporary "owners" creates opportunities for patient capital to acquire high-quality durable-growth companies at significant discounts. Ackman emphasized that the S&P 500's 13% annualized return from 2020–2025 was driven primarily by 10 percentage points of earnings-per-share growth rather than multiple expansion, and that the top ten companies—expected to grow earnings 20%+ annually—justify higher valuations through structural competitive advantages in scale, market position, and AI leadership. Ackman outlined a three-step plan to privatize Fannie Mae and Freddie Mac: repay Treasury's Senior Preferred Stock, exercise Treasury's 79.9% common stock warrants, and relist the companies on the NYSE. He projected this would drive share prices above $40, roughly five times current levels, implying a $300 billion valuation for the taxpayers' stake. He also announced Pershing Square Holdco's $900 million investment in Howard Hughes Holdings to transform it into a diversified holding company, with an initial $2.1 billion acquisition of specialty insurer Vantage Group Holdings planned for Q2 2026. Pershing Square Holdings generated 20.9% NAV performance and 33.9% total shareholder return in 2025, outperforming the S&P 500's 17.9% return. Day One Investors have achieved a 16.2% compounded annual NAV return over 22 years versus 10.7% for the S&P 500, translating to a 27.4x multiple versus 9.4x for the index.