Tracking Bill Ackman’s Pershing Square 13F Portfolio – Q2 2024 Update (OTCMKTS:PSHZF)

This text is a part of a sequence that gives an ongoing evaluation of the modifications made to Pershing Sq.’s 13F portfolio on a quarterly foundation. It’s primarily based on Ackman’s regulatory 13F Kind filed on 08/14/2024. Please go to our Monitoring Invoice Ackman’s Pershing Sq. Holdings article for an concept on how his holdings have progressed over time and our earlier replace for the fund’s strikes throughout Q1 2024.

Ackman’s 13F portfolio worth decreased from ~$10.76B to ~$10.41B this quarter. The variety of positions elevated from 6 to eight. The portfolio stays closely concentrated with just a few big bets. The highest three positions account for ~56% of the whole portfolio worth: Alphabet, Hilton Worldwide Holdings, and Chipotle Mexican Grill.

Along with companion stakes, the fund additionally invests the capital from Pershing Sq. Holdings (OTCPK:PSHZF), a public entity that debut in Euronext Amsterdam in October 2014. This was arrange primarily to extend the quantity of capital invested that’s everlasting. Pershing Sq. Holdings had underperformed the S&P 500 since its EOY 2012 inception. This modified in 2019 as they compounded at ~50% within the three years by means of 2021. Their unique flagship fund’s (2004 inception) observe document is superb with annualized returns of ~15.7% in comparison with ~10.1% for the S&P 500 index. YTD as of mid-August they have been down 2.3%.

Word 1: Pershing Sq. filed to supply a brand new US listed closed-end fund earlier this yr. The supply was withdrawn on the finish of July following lack of curiosity.

Word 2: Pershing Sq. Holdings has at all times traded at a reduction to NAV. It at the moment trades at $46.93 per share, in comparison with an NAV of ~$64.

Word 3: Pershing Sq. has a ~10% stake in Common Music Group (OTCPK:UMGNF) at a cost-basis of ~€18 per share. It at the moment trades at ~€23.60. That is by far their largest fairness stake, at the moment valued at ~$5.5B. The place is just not of their 13F report, as it’s not US listed.

Word 4: Pershing Sq. Tontine Holdings (PSTH), the liquidated SPAC, distributed SPARC shares (not tradeable at the moment) to earlier PSTH frequent and warrant holders following its profitable registration throughout Q3 2023.

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New Stakes:

Brookfield Corp. (BN): BN is a 2.73% of the portfolio place established this quarter at costs between ~$38 and ~$45 and the inventory at the moment trades above that vary at $49.37.

Nike, Inc. (NKE): The two.20% NKE stake was bought this quarter at costs between ~$75 and ~$97, and it’s now at ~$79.

Stake Decreases:

Alphabet Inc. (GOOG): GOOG is now the most important 13F stake at 20.27% of the portfolio. It was bought final March within the low-90s value vary. There was a ~13% stake improve throughout Q2 2023 at costs between ~$104 and ~$128. That was adopted by a ~20% improve within the subsequent quarter at costs between ~$117 and ~$139. This quarter noticed a ~16% trimming at costs between ~$152 and ~$187. The inventory at the moment trades at ~$158.

Hilton Worldwide Holdings (HLT): The ~19% portfolio stake was established in October 2018. It was bought at costs between $64 and $78. Q1 2020 noticed a ~30% stake improve at a cost-basis of ~$70. Q1 2022 noticed a ~20% promoting at costs between ~$129 and ~$158. There was a ~7% trimming throughout Q1 2023 whereas Q3 2023 noticed a ~10% improve. The subsequent quarter noticed a ~11% promoting at costs between ~$147 and ~$182. The inventory at the moment trades at ~$217. There was a minor ~3% trimming this quarter.

Word 1: Their general cost-basis is ~$72 per share.

Word 2: In This fall 2018, Hilton Worldwide Holdings got here again into the portfolio after a spot of eighteen months. The earlier place was bought in Q3 2016 and disposed a yr later. Pershing Sq. has stated that the brand new place was acquired at a greater valuation in comparison with their earlier buy. Additionally, the enterprise construction has remodeled right into a capital-light mannequin following the spinoff in early 2017 of Park Motels & Resorts (PK) and Hilton Grand Holidays (HGV).

Chipotle Mexican Grill (CMG): CMG is a prime three13F place at 17.34% of the portfolio. The stake was established in Q3 2016 at a cost-basis of ~$8.10 per share. The place was offered down by ~30% in Q3 2018 within the high-single-digit price-range and that was adopted with a ~17% trimming over the subsequent 4 quarters. Q1 2020 additionally noticed a one-third promoting at ~$17.20 per share. There was a ~7% trimming in Q1 2021 at ~$26.80 per share. Q3 2021 noticed a ~3% improve at ~$38.20 per share. There was a ~14% trimming over the 2 quarters by means of Q2 2023 at costs between ~$27.30 and ~$42.80. This fall 2023 noticed a ~14% trimming at costs between ~$35.60 and ~$46.80. The final quarter additionally noticed a ~10% trimming at costs between ~$44.30 and ~$59.10. This quarter noticed one other ~22% discount at costs between ~$57 and ~$69. The inventory at the moment trades at $56.12.

Word: The costs quoted above are adjusted for the 50-for-1 inventory cut up in June.

Restaurant Manufacturers Worldwide (QSR): The QSR stake is a big 15.64% of the portfolio stake. Pershing Sq.’s unique cost-basis was ~$16. Q3 2017 noticed a ~32% promoting at costs between $59 and $66. That was adopted with a ~22% discount in H1 2018 at costs between $53 and $64. The 4 quarters by means of Q3 2019 had additionally seen a ~28% promoting at costs between $52 and $79. In June 2020, they elevated the place by roughly two-thirds by means of ahead contracts at $44.20 cost-basis. The inventory at the moment trades at $69.18. There was a minor ~4% trimming throughout Q2 2023 and a marginal trimming this quarter.

Word: They personal ~7.4% of the enterprise.

Canadian Pacific Kansas Metropolis (CP): CP is 11.32% of the portfolio place. A small stake was bought in This fall 2021 at costs between ~$64.50 and ~$78. The present place was constructed throughout Q3 2022 at costs between ~$67 and ~$83. The inventory at the moment trades at $86.32. There was marginal trimming this quarter.

Saved Regular:

Howard Hughes (HHH): HHH is now 11.74% of the 13F portfolio place. The stake was first established in 2010 because of its spin-off from GGP Inc. The bulk of the present stake is from the addition of ~10M shares in Q1 2020 at ~$50 per share by means of a personal placement. Q1 2021 noticed a ~25% stake improve at costs between ~$78 and ~$102. This fall 2022 noticed one other ~17% stake improve at a median price of ~$72 per share. This fall 2023 noticed a ~12% stake improve at costs between ~$66 and ~$87. The inventory is at the moment at $75.69.

Word: They personal ~38% of the enterprise. Seaport Leisure (SEG) was spun-off from Howard Hughes in early August. Shareholders acquired one share for each 9 shares of HHH held. In consequence, Pershing Sq. owns 2.09M shares (37.9% of the enterprise) of Seaport Leisure.

Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) are different lengthy positions within the partnership – the holdings have been disclosed in 13D filings on November 15, 2013 – as they aren’t 13F securities, they aren’t listed within the 13F report. Ackman held slightly below 10% of the excellent shares of each these companies – 115.57M shares of FNMA at a cost-basis of $2.29 and 63.5M shares of FMCC at a cost-basis of $2.14. The mixed funding outlay was ~$400M. FNMA & FMCC at the moment commerce at ~$1.15 per share. In March 2018, Pershing Sq. stated their Fannie/Freddie pfds now quantities to 21% of the whole funding within the two GSEs. Their 2023 Interim Report had the next relating to Fannie/Freddie: “In our view, Fannie Mae and Freddie Mac stay invaluable perpetual choices on the businesses’ exit from conservatorship. … We imagine that it’s merely a matter of when, not if, Fannie and Freddie might be launched from conservatorship.”

The spreadsheet beneath highlights modifications to Pershing Sq.’s 13F inventory holdings in Q2 2024:

Supply: John Vincent. Information constructed from Pershing Sq.’s 13F filings for Q1 2024 and Q2 2024.

Editor’s Word: This text discusses a number of securities that don’t commerce on a significant U.S. change. Please pay attention to the dangers related to these shares.