Letter to Shareholders in the 2023 Semiannual Financial Statement

pershingsquareholdings.com · 2023-08-18 · tier T1

Source: Letter · pershingsquareholdings.com dated 2023-08-18. Auto-generated factual summary. Not investment advice. Verify before acting.

Pershing Square Holdings reported 10.0% NAV performance in the first half of 2023 and 13.1% year-to-date through August 15, 2023, trailing the S&P 500's 16.8% return over the same period. Since inception in 2004, Day One Investors achieved 16.1% compound annual NAV returns versus 9.4% for the S&P 500, translating to an 18.6x multiple versus 5.9x for an index fund. Since the March 2018 restructuring, PSH generated 28.1% compound annual returns compared to the S&P 500's 12.1%. According to Investec Research, PSH ranked #1 among 141 North American closed-end funds for the five-year period ended May 31, 2023, outperforming the next-best fund by 1,115 basis points annually. The portfolio's largest contributors year-to-date included Chipotle (4.5%), Alphabet (4.1%), and Hilton (2.5%), while interest rate hedges detracted 2.2%. Ackman initiated a new position in Alphabet at 16x forward earnings, citing AI concerns as misplaced given Google's distribution advantages and decade-long AI investments.

Citations · 6

“In the first half of 2023, Pershing Square Holdings generated NAV performance of 10.0%”
p#1 · confidence 95%
“Investors who invested in Pershing Square, L.P. at its inception on January 1, 2004...have grown their equity investment at a 16.1% compound annual rate over the last nearly 20 years, compared with a 9.4% return had they invested in the S&P 500”
p#1 · confidence 95%
“PSH's NAV return ranked #1 out of 141 funds in Investec's North American closed-end fund peer group...PSH's performance exceeded the next best performing fund by 1,115 basis points per annum”
p#1 · confidence 95%
“we had the opportunity to initiate our position in the company at a valuation of only 16 times forward earnings...we believe these concerns underestimate Google's structural leadership position in AI”
p#1 · confidence 92%
“During the second quarter, Chipotle grew same-store sales by 7.4%, or 40% from 2019 levels”
p#1 · confidence 95%
“Since the announcement of the Pershing Square restructuring in March of 2018, PSH has generated a compound annual rate of return of 28.1% and a cumulative return of 278% compared to the S&P 500 which has generated 12.1% and 84% returns respectively”
p#1 · confidence 95%

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Bill Ackman

Pershing Square · concentrated equity activism