Contrarian Corpus
activist full deck follow up
2024-02-08 · 59 pages

Pershing Square Holdings (own closed-end fund review) PSH

N 2 Narrative
V 4 Visual
C 3 Craft
Original source ↗

The three reasons

  1. 1

    PSH trades at a 27% discount to NAV despite 31.2% 5-yr compound NAV return

  2. 2

    FOA amendment immediately reduces PSH performance fees starting 2024

  3. 3

    Concentrated portfolio of 8-12 high-quality compounders (UMG, GOOG, CMG, QSR, HLT, HHH, CPKC)

Primary demands

  • Narrow PSH share price discount to NAV via buybacks, dividend policy, and FOA amendments
  • Eliminate $36mm Fee Offset Arrangement balance to flow performance fee reductions to PSH immediately
  • Launch new Pershing Square funds (incl. U.S.-listed closed-end fund) to generate counter-cyclical fee offsets to PSH

KPIs cited

NAV return 2023
26.7% (vs 26.3% S&P 500)
Total shareholder return 2023
36.0%
5-year compound NAV return
31.2% (vs 15.7% S&P 500)
10-year compound NAV return
13.6% (vs 12.0% S&P 500)
Discount to NAV
Narrowed from 33.2% (start 2023) to 28.7% YE to 27.0% as of 2/6/2024
Total Debt to Total Capital
16.3% as of 12/31/2023; debt covered 6x by total assets
Weighted-average cost of debt
3.08%; weighted-avg maturity 8 years
Share buybacks since 2017
64M shares = 26% of initial outstanding at avg $20 / avg 29% discount
Total Firm AUM
$18.2B (Core Funds $16.6B + PS VII $1.6B); Insider capital 28%
FOA Offset Amount remaining
$36mm eliminated under Feb 2024 amendment
UMG share price since announcement
Total shareholder return of 58% (Net 40%) vs 18% S&P 500
GOOG entry valuation
15x earnings at March 2023 entry; +56% in 2023
CMG same-store sales 2023
+8% (42% above 2019); restaurant margin 26.2% (+230bps)

Pattern membership

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

Notable slides (8)

Notes

Not a contrarian campaign deck — this is the annual investor presentation for Pershing Square Holdings (the publicly-listed closed-end fund), reviewing 2023 performance, the FOA amendment, strategies to close the discount to NAV, and one-page summaries of each portfolio holding (UMG, GOOG, CMG, QSR, HLT, HHH, CPKC, exited LOW). Useful as a specimen of how an activist firm communicates with its own closed-end fund shareholders rather than as an example of a target-company thesis. Each portfolio holding page follows a clean 3-block colored-band template (thesis statement / blue band / green band / red band) — this template is worth studying for visual craft. Annotated share-price-history charts with event callouts (UMG p38, GOOG p40, CMG p42, HHH p48, LOW p55) are the strongest visual element. Tone is educational/analytical, no villain. Date: February 8, 2024.