| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1216.80 | -73 |
| Intrinsic value (DCF) | 1567.43 | -66 |
| Graham-Dodd Method | 71.40 | -98 |
| Graham Formula | n/a |
Pershing Square Holdings, Ltd. (PSH.L) is a Guernsey-domiciled, closed-ended hedge fund managed by Pershing Square Capital Management, L.P., a prominent US-based investment firm. The fund employs a long/short equity strategy, focusing on value stocks across diversified sectors globally, supplemented by investments in convertible and debt securities. With a benchmark against the S&P 500 and HFRX Global Hedge Fund Index, Pershing Square Holdings targets high-conviction, concentrated positions, often in undervalued or restructuring companies. The fund’s performance is closely tied to the activist investment approach of its manager, Bill Ackman, known for high-profile bets like Herbalife and pandemic-era trades. Operating in the competitive asset management sector, PSH.L appeals to investors seeking leveraged exposure to Ackman’s strategic vision. Its London Stock Exchange listing and $6.9B market cap underscore its prominence in alternative investments.
Pershing Square Holdings offers investors a unique vehicle to access Bill Ackman’s activist hedge fund strategy, with a strong track record of concentrated, high-conviction bets. The fund’s 2023 performance (net income of ~$1.17B) reflects successful positioning in sectors like consumer staples and financials. However, its high beta (1.05) indicates market sensitivity, and reliance on a single manager introduces key-person risk. The absence of debt and a substantial cash position (~$436M) provide flexibility, but the negative operating cash flow (-$1.27B) warrants scrutiny of liquidity management. A dividend yield of ~2.3% (based on 48.32p/share) adds income appeal. Investors must weigh Ackman’s historical volatility against the fund’s potential for asymmetric returns.
Pershing Square Holdings competes in the niche of concentrated, activist hedge funds, differentiating itself through Ackman’s high-profile approach and willingness to take substantial positions in controversial names (e.g., Chipotle, Universal Music). Its competitive edge lies in deep fundamental research and aggressive shareholder engagement, often pushing for operational or governance changes. However, the fund’s concentrated portfolio (~8–12 holdings) increases idiosyncratic risk compared to diversified peers. Unlike multi-strategy funds (e.g., Citadel), PSH.L lacks geographic or asset-class diversification, making it more susceptible to single-trade failures. Its closed-end structure provides capital stability but limits liquidity versus open-end alternatives. Performance fees (16% above hurdle) align with industry standards but may deter cost-sensitive investors. The fund’s transparency (detailed investor letters) is a strength relative to opaque competitors, though its activist focus can lead to public confrontations that amplify reputational risk.