Contrarian Corpus
activist full deck
2023-02-09 · 62 pages

Pershing Square Holdings (fund-level annual update) PSH

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

The three reasons

  1. 1

    PSH outperformed S&P 500 by 930bps in 2022 thanks to interest-rate hedge

  2. 2

    Interest rate swaptions returned $2.7bn on $384mm premium (7.1x gross)

  3. 3

    Concentrated portfolio of high-quality compounders trades at deep NAV discount

Primary demands

  • Address the persistent NAV discount via buybacks, dividends and global marketing
  • Maintain conservative leverage and investment-grade ratings at PSH
  • Continue concentrated long-only investments paired with opportunistic asymmetric hedges

KPIs cited

PSH 2022 net return
(8.8%) vs S&P 500 (18.1%) — 930bps outperformance
Compound annual net return since firm inception (2004)
15.9% vs 8.9% S&P 500
Interest rate hedge multiple of capital
$384mm premium produced $2.7bn proceeds (7.1x gross / 6.7x net)
PSH total debt to total capital
19.1% as of Dec 2022
Asset coverage of PSH debt
~5.2x by total assets
Share buybacks 2017-2022
59.1mm shares for $1.1bn at avg 28.1% NAV discount, reducing share count by 25%
Lowe's structural margin target
15% structural operating margin; ~$20 EPS line-of-sight, ~50% above current
Chipotle same-store sales
+8% in 2022, +31% vs 2019; restaurant margins +130bps to 23.9%
QSR valuation
<20x 2023 FCF/share, 24% discount to peers
UMG revenue growth
averaging 15%, ahead of Capital Markets Day targets

Pattern membership

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

Notable slides (7)

Notes

PSH annual investor presentation, not a contrarian campaign deck. Covers fund performance, hedging track record (subprime CDS, COVID CDS, rate swaptions), portfolio holdings (UMG, LOW, CMG, QSR, HLT, HHC, FNMA/FMCC), discount-management strategies and SPARC update. Primary material from Pershing Square but the 'thesis' is fund-level (NAV discount + outperformance via hedges) rather than a target-company campaign. Tone is investor-relations educational. Page 28 'Track Record of Defensive Hedging' table is the most distinctive single slide. target_company set to PSH itself since the deck is about the fund vehicle.