Pershing Square Q2 Earnings Call Highlights
Key Points
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- Pershing Square plans to grow through portfolio compounding and selectively launch new permanent-capital vehicles. Its first planned launch, Pershing Square Ventures, is targeted for late 2026 and may invest across private companies from earlier-stage businesses to firms nearing an IPO.
- PSUS is approximately 95% invested after raising $5 billion, with holdings including Microsoft, Meta Platforms, Alcon, Netflix, Visa and Mastercard. Pershing Square also plans to pursue investment-grade leverage equal to roughly 15%–20% of total assets.
- Pershing Square intends to address PSUS’s discount to NAV through expanded marketing, with NAV near $50 per share versus trading in the high-$30s. The company expects to return substantially all quarterly free cash flow through dividends, while continuing to develop Howard Hughes’ insurance business and evaluate SPARC opportunities.
Pershing Square (NYSE:PS) held its first earnings call as a public company, with Chairman and CEO Bill Ackman emphasizing the firm’s strategy of generating growth through the compounding value of its existing investment portfolios while selectively launching new vehicles.
Ackman said the firm’s permanent-capital structure and portfolio of what he characterized as high-quality businesses could support growth even without additional fundraising. He said rising net asset values in the funds Pershing Square manages would increase management and performance fees over time, while cautioning that stock-price multiples can be volatile on a quarterly basis.
“If we never raise another investment vehicle,” Ackman said, Pershing Square expects the underlying companies in its portfolio to compound at a high rate over time. He added that the firm expects portfolio holdings to be volatile in the short term but believes they are attractively valued.
Venture Fund Targeted for Late 2026
Pershing Square’s first planned new fund launch will be Pershing Square Ventures, which Ackman said is targeted for the fall or end of 2026. The firm did not provide a targeted fundraising amount and said future launches would be episodic rather than tied to a set timetable.
Ackman said the venture vehicle would invest across a broad range of private companies, from businesses valued in the several-hundred-million-dollar range to companies valued in the tens of billions of dollars. The strategy is expected to include both earlier-stage companies and businesses nearing public offerings.
Unlike traditional venture funds, which often sell or distribute positions after portfolio companies go public, Ackman said Pershing Square Ventures would be structured as a permanent-capital vehicle that could remain invested through a company’s public-market life cycle.
He said the firm sees strategic value in venture investing beyond returns, including gaining insight into potential technological disruptions that could affect its core public-equity investments. Ackman also said Pershing Square plans to seed the vehicle with investments before raising capital from investors, though he said the firm was limited in what it could disclose until it files relevant documents with the Securities and Exchange Commission.
PSUS Portfolio Deployment and Planned Leverage
Ackman and Chief Investment Officer Ryan Israel said market volatility around Pershing Square’s U.S. vehicle, PSUS, created an attractive opportunity to deploy capital. Ackman said PSUS is approximately 95% invested after raising $5 billion in a volatile market environment.
The executives cited investments including Microsoft, Meta Platforms, Alcon, Netflix, Intercontinental Exchange, Visa and Mastercard as securities that became available at what they viewed as substantial discounts.
Israel said Pershing Square maintains a “library” of hundreds of companies that meet its investment standards and evaluates them based on price relative to long-term value. During periods of market volatility, he said, the firm can identify securities that have been sold off despite attractive longer-term prospects.
Pershing Square also intends to add investment-grade leverage to PSUS. Ackman said the target capital structure is debt equal to roughly 15% to 20% of total assets, describing the approach as conservative compared with leverage typically used by hedge funds. The firm expects to begin discussions with rating agencies in early September and would pursue a debt offering after obtaining a rating.
“If we had the incremental capital today, we have places to put it,” Ackman said.
Marketing Push Planned for PSUS Discount
Ackman said Pershing Square is dissatisfied with PSUS’s trading price relative to its net asset value and plans to take steps to improve investor awareness and demand. He said NAV was approximately $50 per share, while PSUS had traded in the high-$30 range, which he attributed in part to the way shares were allocated during the initial public offering and an insufficient base of buyers in the secondary market.
The firm plans a broader marketing effort aimed at financial advisors and other investors. Ackman said PSUS faces fewer restrictions on promotion than Pershing Square’s historical public vehicle and can be discussed more actively through media appearances, podcasts and other channels.
He said Pershing Square expects future vehicles, including venture, crossover and asymmetric strategies, to be differentiated from portfolios investors could readily replicate in public markets.
Hedging, Dividends and Howard Hughes Strategy
Israel said Pershing Square currently has no asymmetric hedge in place. The firm said it continuously evaluates potential “black swan” risks but only seeks hedges when they offer the potential for substantial returns, generally at least five to 10 times the amount invested. Ackman said the firm is not trying to hedge ordinary short-term market declines, but rather major developments such as a financial crisis, pandemic or sharp inflationary shock.
On capital returns, Ackman said Pershing Square’s policy is to return substantially all quarterly free cash flow to shareholders through dividends. Israel said dividends are the most likely capital-return mechanism in the foreseeable future, though the company could act opportunistically as market conditions change. Ackman said share repurchases are not currently practical given the company’s cash-flow profile and the need for greater share trading volume.
The executives also discussed Howard Hughes, where Pershing Square is pursuing a strategy to shift capital from real estate toward insurance through Vantage. Ackman said the company recruited Marc and David Gansberg to lead the insurance operation and is exploring ways to accelerate capital deployment into Vantage.
Pershing Square expects to provide more insurance-style disclosures to help investors evaluate Vantage as it becomes a larger component of Howard Hughes. Ackman said the objective is to transform Howard Hughes into what he described as a “modern-day Berkshire Hathaway,” combining its real estate assets with an expanding insurance operation.
Finally, Ackman said Pershing Square continues to evaluate opportunities for SPARC, its special purpose acquisition rights company. He said the structure is designed to provide private companies a route to public markets without founder shares, shareholder warrants or underwriting fees, while allowing Pershing Square funds to participate in transactions and associated warrant economics. No SPARC transaction has yet been completed.
About Pershing Square (NYSE:PS)
Pershing Square (NYSE: PS) is a publicly traded investment holding company managed by Pershing Square Capital Management, L.P., the investment firm founded and led by William "Bill" Ackman. The vehicle provides outside investors with exposure to the firm's concentrated, actively managed investment program and is designed to deliver long‑term Capital appreciation through a portfolio of equity and related positions.
The company's principal activities center on investing in publicly traded companies, typically through concentrated long equity positions and selectively using derivatives or other instruments for hedging or to implement investment views.
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