Pershing Square Inc. 2026 Q2 Earnings Call

Thank you, Taryn. Good morning, everyone, and welcome to Pershing's second quarter 2026 earnings call. Joining me today are CEO and Chairman, Bill Ackman, and CIO, Ryan Israel. Yesterday evening, we issued our earnings presentation and letter to shareholders, which are available on our website at pershingsquareinc.com under the investor section. We expect to file our 10-Q after market close today. Before we begin, I would like to draw your attention to the legal disclaimers at the end of our earnings presentation. Today's call may include forward-looking statements, which involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors described under forward-looking statements in our earnings presentation and IPO prospectus filed on April 30th, as updated by our most recently filed Form 10-Q.

We do not undertake any obligation to update forward-looking statements. We may also reference non-GAAP financial measures in response to questions. Reconciliations are included in our earnings presentation available on our website. Finally, please note that nothing on this call constitutes a prospectus, an offer to sell, or a solicitation of an offer to purchase our common stock or any interest or security in any Pershing Square fund or securities of any other person. Furthermore, nothing on this call constitutes investment advice or an invitation or inducement to deal in securities. With that, I would like to turn the call over to Bill Ackman.

Thank you, Jill. Welcome to our first earnings call for Pershing Square Inc. We spent the last 22 years listening to other people's conference calls, and we learned from that, which is why we've taken the approach of the night before releasing earnings, releasing a detailed letter, kind of covering what we think are the key issues and considerations for the quarter, leaving the full hour for questions from analysts, shareholders, and other investors. We're going to follow this call with a space on X. If you go to X, you can find the link. We're also re-posting that, effectively replaying it. You'll be able to listen to it afterwards. Expect that discussion to be more focused on the underlying investments in the Pershing Square portfolio, though we're happy to take some of those questions now.

The emphasis on our underlying holdings, one of the points we tried to make in the letter, what is interesting about this company is that if we never raise another investment vehicle, we just sit with the three permanent capital vehicles we have today, this business will grow at a very high rate, is our expectation, because the underlying companies in which we have invested in, we expect will compound a very high rate over time. In fact, if we do nothing, we do not make another investment, we do not sell another security, we just sit back and allow the compounding of a dozen or more of some of the highest quality businesses we know to occur, those earnings will compound. We believe those stocks will rerate to a higher valuation. We think they are cheap as of this particular moment.

That will cause a rise in our NAV of the funds that we manage. That will increase the fees and the performance fees that we receive from those vehicles, and the earnings stream will flow into the company. We can just sort of sit back, and that is what makes this a really interesting business. Now, of course, we want to optimize those portfolios over time, so we will make some adjustments. We will sell something that has kind of reached our expectation of value. We will buy something that has become very attractively valued. We will actually use some financial leverage in the way we manage those vehicles by issuing investment-grade debt to give us long-term returns. But on a quarterly basis, what you will see is a lot of the inherent volatility in stock prices.

One of the things we talked about in the letter, that while the earnings trajectory of our companies is pretty continuous over long periods of time, the multiple that the market assigns to them, particularly in, I would say, an increasingly short-term market, is very volatile. So expect volatility in the underlying holdings. But if you look at this business on a multi-year basis, think of it as a royalty, a look-through basis into the underlying growth and profitability of a business like Amazon or Meta, Microsoft, or Alcon, Netflix, or some of the others. With that, it is just the high-level discussion, and why do not we open the call for questions?

Sure. We do not have any specific time frames in mind. In fact, we had not thought of the idea of Pershing Square Ventures until recently when it became an obvious thing for us to do. I would say future fund launches will be episodic. They will depend on what is going on at the time in the business, and when we think it is appropriate to do so. Our first fund launch will be Pershing Square Ventures. I would say we are targeting kind of fall, end of year timing for that entity. But again, interesting point, maybe I did not make it clear enough, we love launching new funds over time. But the big driver here is going to be the underlying performance of the existing entities. Let me just talk through a few thought experiments.

For example, we own something like 230 million shares of Fannie Mae and Freddie Mac. Stocks are trading at something like $5 a share. Our view, in the event the administration does what the president has suggested they will do, these are $40, $50 stocks. Overnight, our AUM goes up by potentially $8 billion, $9 billion on the day the administration decides to release Fannie and Freddie or relist them, uplist them, if you will, on the New York Stock Exchange and address the outstanding senior preferred stock. That is just one investment in the portfolio. With a base of AUM of about $23 billion of fee-paying assets, an overnight increase of a successful outcome on Fannie and Freddie could be a 30% increase in our permanent fee-paying assets. We finished the year strong. We are up 20%. Our fee-paying assets grow by $4.6 billion.

Our first priority is always going to be generating returns for our investors because one, that is the business that we are in. Two, that is how you make a lot of friends. Three, that is how we compound the value of our assets. And four, that is how it makes it more likely that we can launch new vehicles in the future. Yes, we love the kind of notion of launching new funds over time, but our first priority is going to be driving the performance of our underlying investments. What is interesting about Pershing Square Ventures, where it is not overnight going to be a material addition to our fee-paying assets, our plan is to start small. We do think it actually is strategically very valuable to us.