Contrarian Corpus
activist full deck
2022-02-11 · 68 pages

Pershing Square Holdings (fund-level annual update; covers portfolio including Lowe's, Universal Music Group, Hilton, Chipotle, Restaurant Brands, Howard Hughes, Domino's, Netflix, PSTH) PSH

N 2 Narrative
V 3 Visual
C 2 Craft
Original source ↗

The three reasons

  1. 1

    PSH delivered 26.9% NAV return in 2021 and 50.1% 3-yr CAGR, outperforming activist and equity hedge indices

  2. 2

    Asymmetric hedges (MBIA CDS 18x, COVID CDS 96x, rate swaptions 7.4x) funded new positions at dislocated prices

  3. 3

    PSH trades at a 28.3% discount to NAV despite transparent, liquid, high-quality portfolio

Primary demands

  • Address PSH's persistent discount to NAV via continued strong investment performance, marketing and corporate actions
  • Maintain conservative leverage with laddered investment-grade debt (no margin, no mark-to-market covenants)
  • Continue opportunistic asymmetric macro hedging (interest-rate swaptions, CDS) to fund reinvestment into high-quality businesses

KPIs cited

2021 NAV return
26.9% vs S&P 500 28.7%, HFRX Activist 19.8%
3-year compound annual return
50.1% vs S&P 500 26.0%
Cumulative PSLP/PSH return since 2004 inception
1,709% vs S&P 500 514%
Discount to NAV
Widened from 23.0% at start of 2021 to 28.3% at 12/31/2021
Total debt / total assets
22.3% as of 2/8/2022; debt covered ~4.5x by assets
Interest-rate swaption hedge return
$188m premium into $1.4bn market value, 7.4x multiple of capital
COVID CDS hedge return
$27m into $2.6bn, 96.3x multiple of capital
Subprime MBIA CDS hedge return
$64m into $1.2bn, 18.5x multiple of capital
Average monthly return in down months
PSLP/PSH -1.7% vs S&P 500 -3.7% since 2004
Netflix position average cost
$395 avg cost on 3.1mm shares acquired Jan 2022
Chipotle same-store sales growth 2021
19% (21% vs 2019)
US streaming revenue CAGR 2017-2021E
31%, reaching $28bn / 25% of total TV+video

Pattern membership

Where this document fits across the library's 12 rhetorical / structural patterns.

Notable slides (8)

Notes

This is a fund-level annual investor presentation for Pershing Square Holdings (the publicly listed closed-end vehicle), not a contrarian thesis deck targeting a single company. It reviews 2021 fund performance, debt strategy, discount-to-NAV efforts, the failed PSTH/UMG SPAC transaction, the macro interest-rate hedge program, and one-page thesis summaries on each portfolio holding (Lowe's, Hilton, Chipotle, QSR, Howard Hughes, Domino's, UMG, Netflix). Tone is institutional and educational rather than adversarial. No specific activist campaign is being launched. Visual style is standard PSH template (blue headers, colored banner sub-heads, mostly tables and share-price charts with annotated event callouts) — consistent across all their fund letters/decks but not editorial-grade. The Netflix section (pp. 37-42) and interest-rate hedge narrative (pp. 33-37) are the most thesis-like portions and contain the clearest SCQA-style framing.