[10-Q] PERSHING SQUARE INC. Quarterly Earnings Report
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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Large accelerated filer |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No
As of May 31, 2026, there were
Table of Contents
PERSHING SQUARE INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2026
TABLE OF CONTENTS
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Page |
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Part I – FINANCIAL INFORMATION |
6 |
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Item 1. Financial Statements |
6 |
Consolidated Statements of Financial Condition (Unaudited) |
6 |
Consolidated Statements of Operations (Unaudited) |
7 |
Consolidated Statements of Changes in Partners’ Capital (Unaudited) |
8 |
Consolidated Statements of Cash Flows (Unaudited) |
9 |
Notes to the Consolidated Financial Statements (Unaudited) |
11 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
31 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
59 |
Item 4. Controls and Procedures |
60 |
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Part II – OTHER INFORMATION |
61 |
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Item 1. Legal Proceedings |
61 |
Item 1A. Risk Factors |
61 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
61 |
Item 3. Defaults Upon Senior Securities |
61 |
Item 4. Mine Safety Disclosures |
61 |
Item 5. Other Information |
61 |
Item 6. Exhibits |
62 |
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SIGNATURES |
63 |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding our strategies, including any plans to launch new funds or complete transactions that increase our permanent capital, future results of operations or financial condition, and our plans regarding dividend payments, made in this Quarterly Report are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Forward-looking statements reflect management's current expectations and are inherently uncertain. We caution investors that such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. Some of the factors that could cause actual results to differ include, but are not limited to, the following:
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These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results or outcomes to differ significantly from management's expectations, are described in greater detail in the section entitled “Risk Factors” of our prospectus (the “IPO Prospectus”) filed with the Securities and Exchange Commission (the “SEC”) on April 30, 2026 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”), relating to our Registration Statement on Form S-1 (File No. 333-294165) (the “Registration Statement”), as updated by Part II. Item 1A. Risk Factors of this Quarterly Report. The forward-looking statements included in this Quarterly Report speak only as of the date hereof or as of the date they are made, as applicable. We undertake no obligation to update any "forward-looking statement" made in this Quarterly Report, whether as a result of new information, changed assumptions, the occurrence of unanticipated events, changes to future operating results or otherwise, except as required by law.
WEBSITE AND SOCIAL MEDIA DISCLOSURE
We may use our website at www.pershingsquareinc.com and/or social media outlets, such as our X account (@PershingSquare) and our LinkedIn account (www.linkedin.com/company/pershingsquare) as distribution channels of important company information for purposes of Regulation FD. In addition, Mr. William Ackman, our Founder and Chief Executive Officer, may use his X account (@BillAckman) as a means of publicly disseminating current information about the Company and the core funds from time to time, including information about new and disposed of investments and hedges, as well as his views on macroeconomic, geopolitical and other developments. The information we or Mr. Ackman post through these channels may be deemed material company information, and we intend to use Mr. Ackman’s X account for purposes of Regulation FD. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting our website at www.pershingsquareinc.com. The contents of our website, any alerts and social media channels are not, however, a part of this Quarterly Report.
CERTAIN DEFINITIONS
As used in this Quarterly Report, “Pershing Square,” the “Partnership,” the “Company,” “our company,” “we,” “us” and “our” refer to Pershing Square Holdco, L.P. and its consolidated subsidiaries prior to the Corporate Conversion (as defined below) and following the Corporate Conversion, to Pershing Square Inc. (“PS Inc.”) and its consolidated subsidiaries, including Pershing Square Capital Management, L.P. (“PSCM”). In addition, unless otherwise noted or the context requires otherwise, the following terms have the following meanings:
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Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Pershing Square Holdco, L.P.
Consolidated Statements of Financial Condition (Unaudited)
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March 31, 2026 |
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December 31, 2025 |
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Assets |
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Cash and cash equivalents |
$ |
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$ |
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Restricted cash |
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Due from affiliates(1) |
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Prepaid expenses |
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Investment in Howard Hughes Holdings Inc. (“HHH”), at fair value |
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Deferred HHH Services Agreement premium |
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Investment in Pershing Square, L.P., at fair value(1) |
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Fixed assets and leasehold improvements (net of accumulated |
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Lease right-of-use assets |
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Other assets |
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Deferred sublease incentive |
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Performance fees receivable |
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Total assets |
$ |
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$ |
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Liabilities |
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Accounts payable |
$ |
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$ |
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Accrued compensation and benefits(1) |
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Performance fee distributions payable(1) |
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Deferred revenue |
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Deferred tax liability |
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Taxes payable |
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Loans payable |
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Operating lease liabilities |
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Affiliates fee rebate payable |
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Distributions payable to partners |
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Total liabilities |
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(see Note 7) |
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Partners’ capital |
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Partners’ capital controlling interests |
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Non-controlling interest in consolidated variable interest entities(1) |
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Total partners’ capital |
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Total liabilities and partners’ capital |
$ |
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$ |
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The accompanying notes form an integral part of these Consolidated Financial Statements.
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Pershing Square Holdco, L.P.
Consolidated Statements of Operations (Unaudited)
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Three months ended March 31, |
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2026 |
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2025 |
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Revenue |
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Management fees (net of contra-revenue of $ |
$ |
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$ |
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Performance fees(1) |
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Total revenue |
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Expenses |
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General and administrative expense |
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Affiliates fee rebate |
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Profit-sharing partner compensation(1) |
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Employee compensation and benefits |
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Depreciation and amortization expense |
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Total expenses |
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Operating income (loss) |
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Non-operating income (expenses) |
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Interest income |
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Unrealized gain (loss) on HHH shares held at fair value |
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( |
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— |
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Unrealized gain (loss) on investment in Pershing Square, L.P. held at fair value(1) |
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( |
) |
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Other income (expense) |
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( |
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Interest expense |
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( |
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( |
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Total non-operating income (expenses) |
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( |
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Net income (loss) before taxes |
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( |
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Income tax expense |
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Net income (loss) |
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( |
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Less: Net (income) loss attributable to non-controlling interest |
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( |
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Net income (loss) attributable to Pershing Square Holdco, L.P. |
$ |
( |
) |
$ |
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The accompanying notes form an integral part of these Consolidated Financial Statements.
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Pershing Square Holdco, L.P.
Consolidated Statements of Changes in Partners’ Capital (Unaudited)
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Limited Partner Interest - |
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Non-controlling |
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Total |
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As of December 31, 2025 |
$ |
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$ |
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$ |
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Capital contributions |
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— |
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Capital distributions |
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( |
) |
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( |
) |
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( |
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Net income (loss) |
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( |
) |
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( |
) |
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( |
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As of March 31, 2026 |
$ |
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$ |
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$ |
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Limited Partner Interest - |
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Non-controlling |
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Total |
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As of December 31, 2024 |
$ |
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$ |
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$ |
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Capital contributions |
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— |
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Capital distributions |
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( |
) |
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( |
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( |
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Net income (loss) |
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As of March 31, 2025 |
$ |
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$ |
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$ |
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The accompanying notes form an integral part of these Consolidated Financial Statements.
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Pershing Square Holdco, L.P.
Consolidated Statements of Cash Flows (Unaudited)
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Three months ended March 31, |
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2026 |
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2025 |
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Cash flows from operating activities |
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Net income (loss) |
$ |
( |
) |
$ |
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Adjustments to reconcile net income (loss) to net cash provided by (used in) |
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Unrealized (gain) loss on HHH shares held at fair value |
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— |
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Write-off of deferred sublease incentive |
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— |
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Amortization of deferred HHH Services Agreement premium |
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— |
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Depreciation and amortization expense |
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Non-cash lease expense |
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Amortization of LTIP grants in profit-sharing partner compensation |
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Changes in operating assets and liabilities: |
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Performance fees receivable |
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Due from affiliates |
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( |
) |
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Prepaid expenses |
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( |
) |
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Investment in Pershing Square, L.P. |
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Other assets |
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Accrued compensation and benefits |
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( |
) |
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( |
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Affiliates fee rebate payable |
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( |
) |
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( |
) |
Taxes payable |
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( |
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( |
) |
Accounts payable |
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Deferred tax liability |
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— |
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Operating lease liabilities |
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( |
) |
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( |
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Deferred sublease incentive |
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— |
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Net cash provided by (used in) operating activities |
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Cash flows from investing activities |
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Purchases of fixed assets and leasehold improvements |
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( |
) |
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( |
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Net cash provided by (used in) investing activities |
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( |
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( |
) |
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Cash flows from financing activities |
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Payments for capital distributions |
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( |
) |
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( |
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Offering costs for Pershing Square USA, Ltd. |
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( |
) |
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( |
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Net cash provided by (used in) financing activities |
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( |
) |
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( |
) |
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Net change in cash and cash equivalents and restricted cash |
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( |
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( |
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Cash and cash equivalents and restricted cash, beginning of period |
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Cash and cash equivalents and restricted cash, end of period |
$ |
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$ |
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Pershing Square Holdco, L.P.
Consolidated Statements of Cash Flows (Unaudited - continued)
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Three months ended March 31, |
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2026 |
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2025 |
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Supplemental disclosures: |
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Cash paid during the period for income tax |
$ |
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$ |
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Cash paid during the period for interest |
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Non-cash activities: |
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Capital contributions |
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Reconciliation of cash and cash equivalents and restricted cash |
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Cash and cash equivalents |
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Restricted cash |
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Total cash and cash equivalents and restricted cash, end of period |
$ |
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$ |
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The accompanying notes form an integral part of these Consolidated Financial Statements.
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PERSHING SQUARE HOLDCO, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2026
Pershing Square Holdco, L.P., a Delaware limited partnership (“PS Holdco”), along with its consolidated subsidiaries (collectively, the “Partnership”), is an alternative asset management company that manages pools of primarily permanent capital invested in long-term, high-return investment strategies. The Partnership includes the consolidated accounts of Pershing Square Capital Management, L.P., a Delaware limited partnership (“PSCM”), which operates as the investment manager of the funds described further below, and PSCM’s general partner, PS Management GP, LLC, a Delaware limited liability company (“PSCM GP”), both of which are held by PS Holdco through Pershing Square Intermediate Holdings, LLC, (“Intermediate Holdings”).
Pershing Square Holdco GP, LLC, a Delaware limited liability company (“Holdco GP”), serves as the general partner of PS Holdco. As of March 31, 2026, Pershing Square Partner Group, LLC, a Delaware limited liability company (“PSPG”), owned
Investment Manager and Managed Funds
PSCM is the investment manager of Pershing Square, L.P., a Delaware limited partnership (“PSLP”), Pershing Square International, Ltd., a Cayman Islands exempted company (“PSINTL” and together with PSLP, the “Private Funds”) and Pershing Square Holdings, Ltd., a publicly traded Guernsey limited liability company (“PSH”, and collectively with the Private Funds, the “Pershing Square Funds”). Further, PSCM provides investment advisory and other services to Howard Hughes Holdings Inc. (“HHH”) under a services agreement dated May 5, 2025 (the “HHH Services Agreement”). PSCM’s primary sources of revenue are management fees from the Pershing Square Funds and HHH, as well as performance fees from PSH and PSINTL.
PSCM is registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and with the Commodity Futures Trading Commission (“CFTC”) as the commodity pool operator of the Pershing Square Funds under the Commodity Exchange Act, as amended.
Basis of Presentation
These unaudited consolidated financial statements (the “Consolidated Financial Statements”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Consolidated Financial Statements. The Consolidated Financial Statements include the accounts of PS Holdco, its wholly owned subsidiaries, and entities in which PS Holdco or a consolidated subsidiary is deemed to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.
These Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and notes included in our IPO Prospectus filed with the SEC on April 30, 2026 pursuant to Rule 424(b)(4) under the Securities Act relating to our Registration Statement on Form S-1 (File No. 333-294165).
All amounts are stated in U.S. dollars. The following is a summary of the significant accounting and reporting policies used in preparing the Partnership’s Consolidated Financial Statements.
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(Unaudited)
Use of Estimates
The preparation of the Partnership’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the amounts of income and expenses during the reported period. While management believes that the estimates utilized in preparing the Consolidated Financial Statements are reasonable and prudent, actual results could differ from those estimates.
Consolidation
PS Holdco consolidates all subsidiaries in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). The assets, liabilities and results of operations of all subsidiaries are included in the Partnership’s Consolidated Financial Statements. The Partnership does not have any variable interests in variable interest entities (“VIEs”) that are not consolidated.
In accordance with ASC 810, PS Holdco consolidates all entities that it, or any of its subsidiaries, control either as the primary beneficiary of a VIE or through a majority voting interest. The Partnership identifies VIEs it must consolidate by evaluating (i) whether it holds a variable interest in an entity, (ii) whether the entity is a VIE, and (iii) whether the Partnership’s involvement would make it the primary beneficiary. Entities that do not qualify as VIEs are generally assessed for consolidation as voting interest entities (“VOEs”). Under the VOE model, the Partnership consolidates those entities for which it holds a majority voting interest.
In evaluating whether the Partnership holds a variable interest in an entity, fees received from the entity (including management fees and performance fees) that are customary and commensurate with the level of services provided are not considered variable interests where the Partnership does not also hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity.
If there are entities where the Partnership holds a variable interest, the Partnership must then determine whether each entity qualifies as a VIE and, if so, whether the Partnership is the primary beneficiary. A VIE is a corporation, partnership, limited liability company, trust or other legal structure used to conduct activities or hold assets that has: (i) insufficient equity to carry out its principal activities without additional subordinated financial support, (ii) a group of equity owners that lack the power to direct its activities that significantly impact economic performance, or (iii) a group of equity owners that do not have the obligation to proportionally absorb losses or the right to proportionally receive returns generated by its operations.
In evaluating whether the Partnership is the primary beneficiary of a VIE, the Partnership evaluates its economic interests in the entity held either directly or indirectly. VIEs are consolidated when an entity, as the primary beneficiary, holds a controlling financial interest in the VIE. An enterprise is deemed to have a controlling financial interest in a VIE if (i) the enterprise has the power to direct the activities of a VIE that impacts the economic performance and (ii) the enterprise has the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIE.
Consolidated Entities
As of March 31, 2026, the accounts of the Partnership includes PS Holdco and the following consolidated legal entities:
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(Unaudited)
PSGP
The Partnership concluded that PSGP should be consolidated because PSCM compensates its personnel using the performance allocations received by PSGP, and PSCM is exposed to variability in the expected losses or returns of PSGP and holds a variable interest in PSGP. PSCM, as investment manager of the Pershing Square Funds, has the power to direct the activities of PSGP that most significantly impact its economic performance (i.e., PSGP’s receipt of performance allocations from PSLP), and PSCM is the primary beneficiary of such economic performance as a result of using PSGP’s performance allocations to compensate PSCM’s personnel.
The following tables summarize the consolidated balances of PSGP:
Summarized Financial Information - Pershing Square GP, LLC |
March 31, 2026 |
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December 31, 2025 |
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Statements of Financial Condition |
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Assets |
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Investment in Pershing Square, L.P., at fair value |
$ |
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$ |
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Due from affiliates |
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Total assets |
$ |
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$ |
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Liabilities and Equity |
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Accrued compensation and benefits |
$ |
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$ |
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Performance fee distributions payable |
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Total liabilities |
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Non-controlling interest |
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Total liabilities and equity |
$ |
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$ |
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Three months ended March 31, |
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Statements of Operations |
2026 |
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2025 |
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Unrealized gain (loss) on investment in Pershing |
$ |
( |
) |
$ |
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Performance allocation from Pershing Square, L.P.(1) |
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Profit-sharing partner compensation |
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( |
) |
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Net income (loss) attributable to non-controlling interest |
$ |
( |
) |
$ |
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( |
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PSUS
PSUS is a Delaware statutory trust formed on November 28, 2023 that is registered with the SEC under the Investment Company Act of 1940, as amended, as a closed-end, non-diversified management investment company. PSCM has purchased PSUS Shares for the purpose of providing operating capital. As of March 31, 2026, PSCM was the sole equity holder of PSUS Shares, and PSUS is therefore consolidated by the Partnership. Refer to Note 4 for details on the share purchases, and Note 11 for details of the Combined IPO.
Pershing Square Funds
The Partnership has evaluated the Pershing Square Funds, their respective general partners and any affiliated entities, as applicable, for consolidation with the Partnership in accordance with ASC 810. As the Partnership does not hold economic interests in the Pershing Square Funds that would absorb more than an insignificant amount of their expected losses or returns, the Partnership does not hold a variable interest in any of the Pershing Square Funds. The Partnership also does not hold a majority of the voting interests in the Pershing Square Funds. As a result, the Pershing Square Funds are not required to be consolidated with the Partnership under ASC 810.
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(Unaudited)
SPARC Sponsor
PSCM is the non-member manager of Pershing Square SPARC Sponsor, LLC (“SPARC Sponsor”), a Delaware limited liability company. The Pershing Square Funds are the non-managing members of SPARC Sponsor. SPARC Sponsor is the sponsor entity of Pershing Square SPARC Holdings, Ltd. (“SPARC”), a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other business combination transaction with one or more businesses. SPARC is actively looking for target companies for its business combination. SPARC Sponsor is not required to be consolidated with the Partnership under ASC 810.
Non-controlling Interests
A portion of the equity and income or loss from entities that are consolidated but not wholly owned by the Partnership is allocated to other owners. The portion allocated to other owners is included within non-controlling interest in the Consolidated Financial Statements. The Partnership does not hold any direct equity interests in PSGP. As a result, all net income related to PSGP is allocated to non-controlling interest, and the capital balance of PSGP represents the direct equity interests of other owners in PSGP.
Non-controlling interest is presented as a separate component of partners’ capital in the Consolidated Statements of Financial Condition and Consolidated Statements of Changes in Partners’ Capital to clearly distinguish the controlling interests in the Partnership (general partner and limited partner interests) from the non-controlling interests in PSGP, as applicable. Net income in the Consolidated Statements of Operations includes the net income attributable to the holders of non-controlling interests in PSGP. Income and losses are allocated to the non-controlling interest in proportion to their relative ownership interests.
Revenue Recognition
PSCM receives management fees and performance fees from certain Pershing Square Funds in exchange for investment management services. These revenues are derived from PSCM’s IMA with each fund. PSCM also receives fees from HHH in exchange for investment, advisory and other services, pursuant to the HHH Services Agreement.
The Partnership recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when the Partnership transfers promised goods or services to customers in an amount that reflects the consideration to which the Partnership expects to be entitled in exchange for those goods or services. See Note 4 for further disclosure regarding revenue recognition.
Management Fees - Pershing Square Funds
PSCM acts as investment manager providing management and administrative services to the Pershing Square Funds in accordance with each of their IMAs. As compensation for such services, PSCM receives a quarterly management fee of
Management fees are generally calculated and paid to PSCM quarterly in advance, based on the amount of fee-paying assets under management at the beginning of the quarter. Management fees are prorated for capital contributions in the Private Funds received during the quarter. Accordingly, changes in PSCM’s management fee revenue from quarter to quarter are driven by changes in fee-paying assets under management and the relative magnitude and timing of contributions and withdrawals.
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(Unaudited)
Management Fees - HHH Fees
Pursuant to the HHH Services Agreement, PSCM receives from HHH: (i) a quarterly base fee of $
The Base Management Fee is paid to PSCM quarterly in advance while the Variable Management Fee is calculated at the end of each quarter. However, both the Base Management Fee and Variable Management Fee are recognized in the period during which the related services are performed.
Consistent with ASC 606, the Partnership considers the HHH Services Agreement and the Share Purchase Agreement, dated May 5, 2025, by and between HHH and PS Holdco (the “HHH Share Purchase Agreement”, and together, the “HHH Agreements”) to be
The HHH Premium is amortized on a straight-line basis as contra-revenue in management fees over a period of
Performance Fees / Allocation
PSCM earns performance fees from PSINTL and PSH as their investment manager, and PSGP receives a performance allocation from PSLP as its general partner. Performance fees and the performance allocation are based on the net income of each Pershing Square Fund above a prior high-water mark.
The performance fees/allocation, if earned, are payable upon the occurrence of crystallization events, which include, but are not limited to, December 31 of each year, withdrawals from the Private Funds and PSH’s payment of a dividend. Performance fees are recognized in the period in which the crystallization event occurs as the fees relate to services performed that period.
Any crystallized performance fees for PSINTL and PSH earned during the year and outstanding at year-end are reported within performance fees receivable.
Cash and Cash Equivalents
The Partnership considers all highly liquid financial instruments with a maturity of three months or less at the time of purchase to be cash equivalents. As of March 31, 2026, cash and cash equivalents was comprised of $
Restricted Cash
The Partnership has provided various security deposits held by service providers in the normal course of business. Such security deposits are generally restricted until the termination of each service provider’s contract period.
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(Unaudited)
Due from Affiliates
The Pershing Square Funds, partners, employees and other affiliates reimburse the Partnership from time to time for expenses the Partnership pays on their behalf. Reimbursements owed to the Partnership are reflected in due from affiliates. See Note 4 for further disclosure of transactions with related parties.
As of March 31, 2026, due from affiliates was primarily comprised of (i) PSGP’s capital withdrawal from PSLP of $
As of December 31, 2025, due from affiliates was primarily comprised of (i) PSGP’s capital withdrawal from PSLP of $
As of March 31, 2026 and December 31, 2025, no allowance related to due from affiliates was deemed necessary.
Fair Value of Financial Instruments
The Partnership’s assets and liabilities that qualify as financial instruments under GAAP are generally recorded at fair value or at an amount where the carrying value approximates fair value due to the instrument’s short-term nature.
Investment in HHH
The Partnership’s investment in HHH is classified as an equity method investment as the Partnership is deemed to exert significant influence over HHH, given (i) the Partnership’s ability to vote based on its direct ownership and the Pershing Square Funds’ ownership of HHH and (ii) PSCM’s right to designate directors on the Board of Directors of HHH. The Partnership has elected the fair value option for this investment with changes in fair value recognized through profit and loss. The Partnership’s investment in HHH is a Level I investment in the fair value hierarchy as its shares are publicly traded and quoted prices are readily available.
As of March 31, 2026, the Partnership’s investment in HHH was valued at $
The summarized financial information of the Partnership’s equity method investment in HHH is as follows:
Summarized Financial Information - HHH |
March 31, 2026 |
|
December 31, 2025 |
|
||
Statement of Financial Condition |
|
|
|
|
||
Assets |
|
|
|
|
||
Net investment in real estate |
$ |
|
$ |
|
||
All other assets |
|
|
|
|
||
Total assets |
$ |
|
$ |
|
||
Liabilities and Equity |
|
|
|
|
||
Mortgages, notes, and loans payable, net |
$ |
|
$ |
|
||
All other liabilities |
|
|
|
|
||
Total liabilities |
|
|
|
|
||
Total equity |
|
|
|
|
||
Total liabilities and equity |
$ |
|
$ |
|
||
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(Unaudited)
|
Three months ended March 31, |
|
|
|
2026 |
|
|
Statement of Operations |
|
|
|
Total revenues |
$ |
|
|
Total expenses |
|
( |
) |
Total other income (loss) |
|
|
|
Operating income (loss) |
|
|
|
Net income (loss) |
|
|
|
Net income (loss) attributable to common stockholders |
$ |
|
|
Investment in PSLP
PSGP’s investment in PSLP is considered an equity method investment as PSCM is deemed to exert significant influence over PSLP as the fund’s investment manager. The Partnership has elected the fair value option for this investment. Fair value for PSGP’s investment in PSLP is determined using the net asset value of PSLP in accordance with the “practical expedient” as defined by GAAP.
As of March 31, 2026, PSGP had an investment of $
Partners in PSGP can withdraw all of their partnership interest each calendar quarter upon 45 days prior written notice, but are subject to (i) PSCM’s contractual or regulatory restrictions on trading, or “trading windows” whereby PSCM may be in possession of any material nonpublic information regarding one or more of PSLP’s portfolio companies and (ii) any other limitations on withdrawals as set forth in the general partner agreement.
Fixed Assets and Leasehold Improvements, Net of Accumulated Depreciation and Amortization
Fixed assets and leasehold improvements consist of leasehold improvements principally for the build-out of the Partnership’s office space, furniture and fixtures, office computers and equipment along with computer software.
Fixed assets and leasehold improvements are recorded at cost less accumulated depreciation and amortization. Depreciation of fixed assets is calculated using the straight-line method over a period of three to seven years. Leasehold improvements are amortized over the shorter of the expected useful life or the remaining term of the related lease agreement. Total depreciation and amortization expense of the Partnership for the three months ended March 31, 2026 was $
The following table provides the gross balances for each class of fixed assets and total accumulated depreciation and amortization for all asset classes:
|
|
March 31, 2026 |
|
December 31, 2025 |
|
||
Asset Class |
Useful Life |
|
|
|
|
||
Leasehold Improvements |
$ |
|
$ |
|
|||
Furniture and Fixtures |
|
|
|
|
|||
Office Computers and Equipment |
|
|
|
|
|||
Computer Software |
|
|
|
|
|||
Total Fixed Assets and Leasehold Improvements (gross) |
|
|
|
|
|
||
Less: Accumulated Depreciation and Amortization |
|
|
( |
) |
|
( |
) |
Total Fixed Assets and Leasehold Improvements (net) |
|
$ |
|
$ |
|
||
17
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(Unaudited)
Accounts Payable
Accounts payable is comprised of primarily general and administrative expenses as well as interest expense that were accrued but not paid as of period end. For more details on general and administrative expenses, refer to Note 5.
Income Taxes
Prior to the Conversion date, the Partnership is a partnership for U.S. tax purposes and is not subject to U.S. federal income taxes. Accordingly, no provision has been made for federal income taxes, as the partners are individually liable for taxes on their respective share of the Partnership's taxable income or loss.
The Partnership is subject to certain state and local taxes. For the three months ended March 31, 2026, the Partnership recorded $
For the tax years ending December 31, 2026 and 2025, the Partnership and its parent entity PSPG both elected to be subject to the New York State Pass-Through Entity Tax (“NYS PTET”) and the New York City Pass-Through Entity Tax (“NYC PTET” and together with NYS PTET, “PTET”).
PTET grants eligible partners a tax credit on their individual New York State and New York City income tax returns. Any PTET owed is a joint liability of (i) the Partnership or PSPG and (ii) each partner. For the three months ended March 31, 2026, the Partnership and PSPG made PTET payments totaling $
As of March 31, 2026, there was
The Partnership is subject to the provisions of ASC 740, Income Taxes. This standard requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s tax returns to determine whether it is “more-likely-than-not” to be sustained by the applicable tax authority. Uncertain tax positions in which the benefit to be realized does not meet the “more-likely-than-not” threshold would be recorded as a tax expense in the current year. As of March 31, 2026, the Partnership did not accrue interest or penalties related to uncertain tax positions. The Partnership has evaluated its tax positions and does not believe there are any uncertain tax positions that would result in a material change to unrecognized tax benefits within twelve months of the reporting date. Generally, the Partnership’s tax returns for tax years 2022 and forward are open to examination by the respective taxing authorities.
Lessee arrangements
PSCM leases office space, other real estate and certain equipment under operating leases. In accordance with ASC 842, Leases (“ASC 842”), the Partnership determines if an arrangement is or contains a lease at inception date by evaluating whether the arrangement conveys the right to use an identified asset and whether the Partnership obtains substantially all of the economic benefits from and has the ability to direct the use of the asset.
Under ASC 842, the Partnership elected the practical expedient to not separate lease and non-lease components. The Partnership also elected to apply the short-term lease recognition exemption which eliminates the requirement to present in the Consolidated Statements of Financial Condition leases with a term of 12 months or less. These two practical expedients were elected for all classes of underlying assets.
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(Unaudited)
For short-term leases, instead of recognizing a lease liability and right-of-use asset (“ROU asset”), the Partnership recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-term lease, the Partnership evaluates the lease term and the purchase option in the same manner as all other leases.
At the commencement date of a lease which does not qualify as a short-term lease, the Partnership recognizes a lease liability and an ROU asset representing the Partnership’s right to use the underlying asset over the lease term. The initial measurement of the lease liability is calculated on the basis of the present value of the remaining lease payments, and the ROU asset is measured on the basis of this liability, adjusted by prepaid and accrued rent, lease incentives and initial direct costs. Operating lease cost is recognized on a straight-line basis over the lease term, with the cost presented as a component of general and administrative expense. The Partnership does not have finance leases.
PSCM’s leases require other payments such as costs related to service components, real estate taxes, common area maintenance and insurance. These costs are generally variable in nature and based on the actual costs incurred and required by the lease. As the Partnership has elected to not separate lease and non-lease components for all classes of underlying assets, all variable costs associated with the leases are expensed in the period incurred and are recorded in general and administrative expense. PSCM’s lease agreements do not contain any material residual value guarantees or material restrictive financial covenants. For details on PSCM’s leases with related parties, refer to Note 4. Neither the Partnership nor PSCM has any leases that have not yet commenced that create significant rights and obligations for the lessee.
When determining the lease term, the Partnership does not include renewal options unless the renewals are deemed to be reasonably certain of being exercised at the lease commencement date.
ASC 842 requires that a lessee use the rate implicit in the lease when measuring the lease liability and ROU asset, unless that rate is not readily determinable. Alternatively, the Partnership is permitted to use its incremental borrowing rate (“IBR”) which is defined as the rate of interest that the Partnership would have to pay to borrow an amount equal to the lease payments on a collateralized basis, over a similar term and in a similar economic environment. Since the rate implicit in the lease is not readily determinable, the Partnership uses its incremental borrowing rate when measuring its leases, both at lease commencement and when reassessment is required, such as upon modification. The IBR is calculated by considering the Partnership’s synthetic credit standing and existing line of credit, the impact of collateral and the term of the lease.
Offering Costs
Offering costs consist of fees related to underwriting, legal advice, regulatory filings, printing and other costs for services directly related to the PSUS IPO. PSUS offering costs have been deferred and are recorded in other assets. Refer to Note 5 for details on the treatment of PS Holdco’s offering costs in the current period.
Other Income (Expense)
Other income is primarily comprised of (i) a non-cash loss related to the derecognition of the deferred sublease incentive due to the termination of the related sublease and (ii) office space sublease income (earned prior to termination of the sublease) and the reimbursement of office services from NEOX Public Benefit LLC. Refer to Note 8 for further detail on each of these items.
Employee Benefit Plan
The Partnership has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. All employees and profit-sharing partners are eligible to participate in the savings plan (the “401(k) Plan”). The 401(k) Plan allows participants to invest in a variety of mutual funds across several fund families. The Partnership makes a safe harbor contribution in the amount of
19
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(Unaudited)
Employee Compensation and Benefits
Employee compensation and benefits reflects all compensation-related items not directly related to the profit-sharing arrangements and the long-term incentive plan discussed below, and includes salaries, benefits, payroll taxes and discretionary cash bonuses. Employee compensation and benefits also includes the cost of benefits paid to partners who participate in the profit-sharing arrangements and the long-term incentive plan. The Partnership generally recognizes employee compensation and benefit expenses over the related service period. On an annual basis, discretionary cash bonuses generally comprise a significant portion of total employee compensation and benefits for employees who do not hold profits interests. Discretionary cash bonuses are dependent upon a variety of factors, including the performance of the Pershing Square Funds for the year.
Profit-Sharing Arrangements
Certain awards (the “Profits Interest Awards”) entitle profit-sharing partners to a portion of the net profits earned by PSGP, PSPG and PS CompCo, LLC, a Delaware limited liability company (“CompCo”). Refer to Note 4 “Variable Compensation Agreement” for more details. Profits Interest Awards do not represent a substantive class of equity under ASC 718, Compensation (“ASC 718”) and are accounted for as cash-based profit-sharing arrangements. As such, amounts distributed or allocated to profit-sharing partners are included in profit-sharing partner compensation in the Consolidated Statements of Operations.
Long-Term Incentive Plan
Awards under the Long-Term Incentive Plan (“LTIP” and the “LTIP Awards”) entitle certain profit-sharing partners (the “LTIP Partners”) to cash distributions of management fee-based and performance-based net profits pursuant to the terms of their respective agreements and granted them a reduced percentage of their Profits Interest Awards upon retirement under certain circumstances as described in the LTIP. Certain LTIP Partners’ LTIP Awards vested after
The LTIP Awards are treated as a separate class of profits interests from the Profits Interest Awards. The LTIP Awards are accounted for based on their substance. Portions of the LTIP Awards where rights to distributions of profits are based fully on the discretion of Mr. Ackman, or any successor thereof, are in substance a profit-sharing arrangement and are therefore recorded within profit-sharing partner compensation. Other portions of the LTIP Awards, when fully vested, entitle LTIP Partners upon retirement to a distribution equal to the percentage outlined in each of their agreements in perpetuity (the “permanent profits-interests”) and represent a substantive class of equity. The fair value of such awards is recognized on a straight-line basis over a service period of up to
LTIP Partners are also entitled to a portion of the consideration related to a Terminal Value Event as defined in the LTIP, including, but not limited to, a sale or transfer of all or any portion of the Partnership’s equity interests, including through an initial public offering. The Partnership accounts for forfeitures of permanent profits-interests as they occur.
For the three months ended March 31, 2026 and 2025, the Partnership did
During the three months ended March 31, 2026, $
For the three months ended March 31, 2025, the Partnership recognized profit-sharing compensation expense in an amount equal to the value of an LTIP Partner’s termination benefit that was granted during the period. The LTIP Partner was granted continued payment of non-permanent LTIP Awards for a period of time following the LTIP Partner’s separation from the Partnership. The Partnership calculated the value of the termination benefit as the present value of the future payments that were reasonably estimable under the LTIP Partner’s separation agreement.
20
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(Unaudited)
The following table summarizes the components of profit-sharing partner compensation expense as well as the total distributions resulting from permanent profits-interests:
|
Three months ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Profit-sharing partner compensation |
$ |
|
$ |
|
||
Amortization of unvested grants of permanent profits-interests |
|
|
|
|
||
Total profit-sharing partner compensation |
$ |
|
$ |
|
||
|
|
|
|
|
||
LTIP permanent profits-interest distributions |
$ |
|
$ |
|
||
|
|
|
|
|
||
Recent Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires entities with a single reportable segment to provide all disclosures in accordance with Topic 280 and amends current guidance for reportable segment disclosure requirements. This guidance is effective for public entities for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024. The Partnership adopted this standard on December 31, 2024 on a retrospective basis, and, as a result, the Partnership included Note 9 to the Consolidated Financial Statements. Adoption of ASU 2023-07 did not have an impact in the Consolidated Statements of Financial Condition, Consolidated Statements of Operations, or Consolidated Statements of Cash Flows.
In December 2023, the FASB issued ASU 2023-09 amending ASC 740, Income Taxes, to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. The new guidance requires all entities to disclose, on an annual basis, income taxes paid (net of refunds received) disaggregated by federal (national), state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2025 for private companies and after December 15, 2024 for public companies, with early adoption permitted. ASU 2023-09 should be applied prospectively, but entities may apply it retrospectively. The Partnership is currently assessing its impact.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain expenses including employee compensation, depreciation and intangible asset amortization on an annual and interim basis. The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Partnership is currently assessing the impact of ASU 2024-03.
The Partnership makes quarterly distributions of excess cash in proportion to each partner’s ownership percentage. Cash distributions made at the start of the year include any performance fees earned in the prior year.
PS Holdco records all cash distributions resulting from PSPG’s Profits Interest Awards and the non-permanent portion of PSPG’s LTIP Awards in profit-sharing partner compensation. The portion of cash distributions resulting from the LTIP Awards that are permanent profits-interests are recorded as capital distributions. All cash distributions made to the Partnership’s strategic investors are recorded as capital distributions.
In the case of performance fees which are paid and/or distributed at the start of the year following when they were earned, the Partnership accrues the portion which is classified as capital distributions in performance fee distributions payable.
21
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(Unaudited)
Management Fees
The Partnership earns all of its management fees from the Pershing Square Funds and HHH. The Pershing Square Funds are considered related parties as PSCM manages their operations and makes investment decisions on their behalf as investment manager. HHH is considered a related party as an equity method investee.
For the three months ended March 31, 2026, PSCM earned management fees from the Pershing Square Funds of $
On May 5, 2025, PSCM began earning the Base Management Fee and the Variable Management Fee from HHH. For the three months ended March 31, 2026, PSCM earned a Base Management Fee of $
The following table presents a summary of all sources of management fees:
|
Three months ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Pershing Square Holdings, Ltd. |
$ |
|
$ |
|
||
Pershing Square, L.P. |
|
|
|
|
||
Pershing Square International, Ltd. |
|
|
|
|
||
HHH Base Management Fee |
|
|
|
— |
|
|
Total Management Fees - Gross |
$ |
|
$ |
|
||
|
|
|
|
|
||
Less: Amortization of HHH Premium |
|
( |
) |
|
— |
|
|
|
|
|
|
||
Total Management Fees - Net |
$ |
|
$ |
|
||
PSCM received in advance the $
Performance Fees / Allocations
The Partnership earns all of its performance fees/allocations from the Pershing Square Funds, each of which is a related party.
Pershing Square International, Ltd.
PSCM receives a performance fee in connection with its services as investment manager to PSINTL (such performance fee, the “PSINTL Performance Fee”). The PSINTL Performance Fee is an amount equal to
The board of directors of PSINTL may issue shares subject to a lower or no management fee and/or performance fee for members, partners, officers, managers, employees or affiliates of PSCM or other shareholders at the board of directors’ sole discretion. Class F shareholders are affiliates of PSCM or charitable entities directed, supported, or controlled by employees or affiliates of PSCM and are not charged a management fee or performance fee. Class G shares are subject to a PSINTL Performance Fee of
22
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(Unaudited)
For the three months ended March 31, 2026, there was
Pershing Square Holdings, Ltd.
PSCM receives a “Variable Performance Fee” from PSH in an amount equal to
The Variable Performance Fee, if earned, is payable upon the occurrence of crystallization events, which include, but are not limited to, December 31 of each year and PSH’s payment of a dividend. Variable Performance Fees resulting from dividends are pro-rated to reflect the ratio of the dividend to PSH’s net asset value at the time the dividend is paid. Payment of the Variable Performance Fee is subject to a hold-back where
For the three months ended March 31, 2026, there was
Pershing Square, L.P.
PSGP receives a performance allocation in connection with its services as the general partner to PSLP. At the end of each fiscal year or upon investor withdrawals, for each PSLP limited partner’s capital account that has been allocated net income, a performance allocation shall be made to the capital account of PSGP (the “PSLP Performance Allocation”). Tranche A limited partnership interests are subject to a PSLP Performance Allocation of
For the three months ended March 31, 2026,
Variable Compensation Agreement
Per the Variable Compensation Agreement between CompCo, PSCM, and PS Holdco (the “VCA”), PS Holdco is entitled to receive from PSCM the following performance fee amounts:
(i) with respect to PSH, an amount equal to the
(ii) with respect to other funds subject to the VCA (currently only PSINTL), an amount equal to the applicable performance fee (
Further, per the VCA, CompCo is entitled to receive from PSCM the following amounts, in each case solely to the extent such amount exceeds the Preferred Performance Fee PS Holdco receives from PSCM and net of any applicable taxes:
(i) with respect to PSH, all performance fees received from PSH, inclusive of the portion of management fees (for the three months ended March 31, 2026, none) and performance fees (currently only PSINTL) received from other funds that would offset performance fees payable by PSH, and
(ii) with respect to other funds subject to the VCA (currently only PSINTL), all performance fees received from such fund, exclusive of the portion of such performance fees that would offset performance fees payable by PSH ((i) and (ii) collectively the “Subordinated Performance Fee”).
23
Table of Contents
(Unaudited)
For the three months ended March 31, 2026, there was
The Preferred Performance Fee is retained by PS Holdco and then distributed to PSPG and the Strategic Investors based on their respective ownership percentages. The Preferred Performance Fee distributed from PS Holdco is recorded in both profit-sharing partner compensation and capital distributions in accordance with the methodology discussed in Note 3.
Further, as CompCo is a vehicle used to compensate employees, the Partnership considers its relationship with CompCo to be a service contract and therefore records the Subordinated Performance Fee in profit-sharing partner compensation.
Pershing Square USA, Ltd.
As of March 31, 2026, PSCM has purchased
Affiliates Fee Rebate
Management fees and performance fees paid through the PSH public shares held by PSCM’s partners, employees and certain of their affiliated entities are rebated (the “Affiliate Rebate”) to such shareholders on a quarterly basis for management fees and on an annual basis for crystallized performance fees through an allocation of part of PSPG’s distribution from PS Holdco to the affiliated PSH shareholders. The Affiliate Rebate is recognized by PSCM as an expense paid by PSPG on PSCM’s behalf. For the three months ended March 31, 2026, the Affiliate Rebate totaled $
Office Space License
Prior to January 1, 2026, PSCM licensed a portion of its office space to Mr. Ackman’s family office, TABLE, under a license agreement. For the three months ended March 31, 2025, TABLE paid $
The agreement also granted TABLE the use of a designated portion of PSCM’s office space and certain office-related services, including information technology and general administrative services. Following January 1, 2026, only certain office-related services were still used by TABLE. For the three months ended March 31, 2026, TABLE paid $
Ownership in Landlord Entity
Georgetown Eleventh Avenue Owners, LLC (the “Landlord”), owns the building in which PSCM rents office space. Mr. Ackman and certain of Mr. Ackman’s affiliates are indirectly invested in the Landlord.
PSH Share Agreement
On December 15, 2025, the Partnership entered into a PSH Share Agreement with Mr. Ackman and certain other affiliates (together with Mr. Ackman, the “Shareholders”) for no consideration, pursuant to which each Shareholder granted the Partnership the right, but not the obligation, to acquire from such Shareholder a certain percentage of the outstanding ordinary shares of PSH (the “Subject PSH Shares”) in exchange for shares in the Partnership’s publicly listed successor entity at an agreed upon ratio (the “PSH Share Acquisition”). As of March 31, 2026, the Subject PSH Shares represented approximately
24
Table of Contents
(Unaudited)
The following table presents the components of general and administrative expense:
|
Three months ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Professional fees |
$ |
|
$ |
|
||
Travel and entertainment |
|
|
|
|
||
Occupancy |
|
|
|
|
||
Information technology |
|
|
|
|
||
Office costs |
|
|
|
|
||
Other expenses |
|
|
|
|
||
Insurance |
|
|
|
|
||
Dues & memberships |
|
|
|
|
||
Total General and Administrative Expense |
$ |
|
$ |
|
||
For the three months ended March 31, 2026, professional fees includes $
Lines of Credit
PSCM obtained a line of credit from JPMorgan Chase Bank, N.A. (the “Lender”) in October 2014 (the “2014 Line of Credit”). The terms of the 2014 Line of Credit, including maturity date, maximum principal amount and interest rate, have been amended from time to time. As of March 31, 2026, the 2014 Line of Credit had a maturity date of
During the three months ended March 31, 2026 and 2025, PSCM did not borrow or repay any principal on the 2014 Line of Credit. As of March 31, 2026 and December 31, 2025, $
The 2014 Line of Credit includes provisions that limit the ability of PSCM to incur additional indebtedness or to create additional liens or other encumbrances on PSCM or the Guarantor’s assets, aside from additional financing from the Lender and certain other permitted indebtedness. The 2014 Line of Credit requires the Guarantor to maintain a net worth of at least $
PSCM obtained an additional line of credit from the Lender in December 2021 (the “2021 Line of Credit”). The terms of the 2021 Line of Credit, including maturity date, maximum principal amount and interest rate, have been amended from time to time. As of March 31, 2026, the 2021 Line of Credit had a maturity date of
The 2021 Line of Credit is secured by a pledge and security agreement whereby PSCM granted the Lender a security interest in PSCM’s management fees. The 2021 Line of Credit has the same Guarantor and covenants as the 2014 Line of Credit.
25
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(Unaudited)
During the three months ended March 31, 2026 and 2025, PSCM did not borrow or repay any principal on the 2021 Line of Credit. As of March 31, 2026 and December 31, 2025, there was
The following table summarizes the Partnership and its subsidiaries’ outstanding debt as of March 31, 2026:
Maturities of Debt |
2014 Line of Credit |
|
2021 Line of Credit |
|
Total |
|
|||
2026 (Remaining) |
$ |
— |
|
$ |
— |
|
$ |
— |
|
2027 |
|
|
|
— |
|
|
|
||
2028 |
|
— |
|
|
— |
|
|
— |
|
2029 |
|
— |
|
|
— |
|
|
— |
|
2030 |
|
— |
|
|
— |
|
|
— |
|
Total Debt Obligations |
$ |
|
$ |
— |
|
$ |
|
||
The following table summarizes the interest expense and average interest rate of the Partnership and its subsidiaries’ outstanding debt:
|
Three months ended March 31, |
|
||||||||||
|
2026 |
|
2025 |
|
||||||||
|
Interest Expense |
|
Average Rate |
|
Interest Expense |
|
Average Rate |
|
||||
2014 Line of Credit |
$ |
|
|
% |
$ |
|
|
% |
||||
2021 Line of Credit |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total Debt Interest |
$ |
|
|
|
$ |
|
|
|
||||
Litigation
From time to time, the Partnership may be involved in litigation and claims incidental to the conduct of the Partnership’s business, including without limitation, the investment activities of the Pershing Square Funds. PSCM is subject to regulation, oversight and examination by regulatory agencies in the U.S. and globally that have, or may in the future have, regulatory authority over the Partnership and its business activities. This regulatory environment may result in agency examinations, investigations, litigation and subpoenas, and material costs related to each. As of March 31, 2026 and December 31, 2025, other than the lawsuit detailed below, there were no known regulatory investigations, claims or litigation against the Partnership.
On February 9, 2026, certain alleged stockholders of HHH, Charter Township of Shelby Fire & Police Retirement System, MVS Marine LLC and Kurtis Solberg (the “Plaintiffs”), filed a lawsuit in the Delaware Court of Chancery against PSCM, PS Holdco and Mr. Ackman (the “Pershing defendants”) and Ben Hakim and certain other directors of HHH (the “HHH director defendants”) captioned Charter Township of Shelby Fire & Police Retirement System v. Pershing Square Capital Management, L.P., C.A. No. 2026-0184-BWD. The lawsuit alleges claims on behalf of a putative class of HHH stockholders and derivatively on behalf of HHH and contends that (i) the HHH Share Purchase Agreement and related transactions amounted to a transfer of control of HHH to the Pershing defendants, (ii) the HHH director defendants breached their fiduciary duties by approving the transaction at an unfair price and (iii) the Pershing defendants aided and abetted those alleged breaches of fiduciary duty. The Plaintiffs also seek a declaratory judgment that the HHH Services Agreement is invalid and unenforceable under the Delaware General Corporation Law. The complaint seeks, among other things, injunctive relief preventing enforcement of the HHH Services Agreement, certain other equitable relief, unspecified damages and an award of costs and disbursements, including attorneys’ fees. The Pershing defendants filed a motion to dismiss on May 1, 2026. The Partnership believes these claims have no merit and intends to contest these claims vigorously. The Partnership cannot reasonably estimate the amount or range of any potential loss, if any, related to these claims. Accordingly,
26
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(Unaudited)
Other Contingencies, Risks and Uncertainties
From time to time, in the normal course of business, the Partnership may enter into contracts that contain a variety of indemnification provisions. The Partnership’s maximum exposure under these arrangements is unknown, as any such exposure involves possible future claims that may be, but have not yet been made against the Partnership, based on events which have not yet occurred. However, the Partnership has not had prior material claims or losses pursuant to these contracts and believes the risk of material loss to be remote and therefore,
Partnership as a lessee
PSCM has several operating lease agreements for its office, other real estate and certain equipment. PSCM’s office lease represents a significant majority of the total lease commitment; it is noncancelable and expires on January 31, 2034.
Prior to January 30, 2026, PSCM subleased a portion of its office space to NEOX Public Benefit LLC (“Subtenant” or “NEOX”), an entity affiliated with Mr. Ackman. The sublease commenced on December 5, 2022 and would have expired on December 31, 2033.
On January 30, 2026, PSCM agreed to the terms of a modified office lease agreement with the Landlord to remove the office space that PSCM has historically subleased to NEOX. Concurrently, PSCM agreed to terminate its sublease with NEOX. The terms of the modified lease and sublease took effect on March 1, 2026.
In accordance with ASC 842, the Partnership accounted for the amendment to the office lease with the Landlord as a lease modification, requiring the Partnership to recalculate the ROU asset, lease liability and lease expense over the respective lease term. The lease classification and lease term did not change.
For the three months ended March 31, 2026, the Subtenant paid $
Between 2021 and 2022, PSCM provided various landlord incentives which were capitalized as a deferred asset and amortized over the life of the lease. As of December 31, 2025, the unamortized portion of the deferred sublease incentive was $
The following table presents the components of PSCM’s right-of-use assets and liabilities related to leases:
|
|
March 31, 2026 |
|
December 31, 2025 |
|
||
Component of Lease Balances |
Statements of Financial Condition Line Item |
|
|
|
|
||
Operating lease assets |
$ |
|
$ |
|
|||
Operating lease liabilities |
|
|
|
|
|||
27
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(Unaudited)
The following table presents the components of PSCM’s lease cost and the classification of such costs:
|
|
Three months ended March 31, |
|
||||
|
|
2026 |
|
2025 |
|
||
Component of Lease Cost |
Statements of Operations Line Item |
|
|
|
|
||
Operating lease cost |
General and administrative expense |
$ |
|
$ |
|
||
Variable lease cost |
General and administrative expense |
|
|
|
|
||
Sublease income |
Other income (expense) |
|
( |
) |
|
( |
) |
Total lease expense |
|
$ |
|
$ |
|
||
The following table includes the future maturities of operating lease payments for subsequent periods:
For the Years Ended December 31, |
Operating Lease |
|
|
2026 (Remaining) |
$ |
|
|
2027 |
|
|
|
2028 |
|
|
|
2029 |
|
|
|
2030 |
|
|
|
Thereafter |
|
|
|
Total future minimum lease payments |
$ |
|
|
Less: liability accretion |
|
( |
) |
Total lease liabilities |
$ |
|
|
The following table includes additional information related to PSCM’s operating leases:
|
Three months ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Cash paid for amounts included in the measurement of operating lease liabilities |
$ |
|
$ |
|
||
Right-of-use asset balance changes due to new / remeasured operating lease liabilities |
|
( |
) |
|
— |
|
Weighted-average remaining lease term – Operating leases |
|
|
||||
Weighted-average discount rate – Operating leases |
|
% |
|
% |
||
The Partnership, together with its subsidiaries, conducts its business and generates substantially all of its revenues in the United States through
The Partnership’s CODM is the operational leadership group, which includes the . The CODM reviews the Partnership’s assets using the same categorization as presented in the Consolidated Statements of Financial Condition.
The Partnership may invest its cash in U.S. Treasury money market funds. As of March 31, 2026 and December 31, 2025, the Partnership’s cash balances not invested in money market funds were held in Federal Deposit Insurance Corporation insured bank accounts, which at times, may be in excess of federally insured limits.
28
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(Unaudited)
The Partnership has evaluated the need for disclosures and/or adjustments resulting from subsequent events. This evaluation did not result in any additional subsequent events that necessitated disclosure and/or adjustment other than as disclosed below.
Initial Public Offering and Private Placement
On April 30, 2026, PS Inc., the successor reporting entity to PS Holdco, completed an IPO of shares of its common stock as part of a combined offering with the PSUS IPO. Additionally, in connection with the closing of the Combined IPO, PS Inc. and PSUS closed the Combined Private Placement of PSUS Shares and shares of PS Inc. common stock. Gross proceeds to PSUS from the Combined Transaction, before deducting sales loads, placement fees and other offering expenses, was $
As part of the Combined Transaction, PS Holdco and its owners completed a restructuring that included the following steps:
Concurrently with the Combined Transaction, the following stock-based awards were issued by PS Inc.:
29
Table of Contents
(Unaudited)
Loans Payable
In connection with the IPO, on April 29, 2026, PSCM fully repaid all outstanding loan balances and closed both the 2014 Line of Credit and 2021 Line of Credit. On April 30, 2026, PS Inc. entered into a credit agreement with a syndicate of banks, led by Bank of America, N.A., that included the following:
Both the term loan and the revolving credit facility are subject to an interest rate of
Vantage Group Holdings Ltd.
On June 4, 2026, HHH completed its acquisition of Vantage Group Holdings Ltd. In connection with this acquisition, Marc Grandisson, former CEO of Arch Capital Group Ltd., agreed to serve as a strategic adviser to PS Inc. and its affiliates, including PSCM, effective March 5, 2027. As compensation for these services, PS Inc. agreed to grant Mr. Grandisson
30
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Such factors are discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report and the section entitled “Risk Factors” in our IPO Prospectus, as updated by Part II. Item 1A. Risk Factors in this Quarterly Report.
Except as disclosed herein, the historical Consolidated Financial Statements and the discussion of our historical financial results of operations and condition discussed herein are those of Pershing Square Holdco, L.P. (“PS Holdco”), our predecessor prior to the Corporate Conversion, and do not give effect to the Corporate Conversion and the Combined Transaction described below. Certain amounts, percentages and other figures included in this Quarterly Report have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report have been calculated, in some cases, not on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report may vary from those obtained by performing the same calculations using the figures on the face of our Consolidated Financial Statements included elsewhere in this Quarterly Report. Certain other amounts that appear in this Quarterly Report may not sum due to rounding.
Business Overview
We are a leading alternative asset manager with approximately $26.6 billion in total AUM and $17.0 billion in Fee-Paying AUM, of which 96% is permanent capital, as of March 31, 2026. We believe our business model is simple and highly scalable. We employ a disciplined, research-intensive approach to fundamental value investing to preserve and grow our permanent capital at high rates of return using a set of core investment principles and opportunistic asymmetric hedges. We complement our organic growth from time to time with innovations like the Howard Hughes Transaction (described below) and by selectively launching other investment funds and completing other corporate transactions that create permanent capital, in each case, that leverage our core competencies to create large ‘overnight’ (after the completion of a new offering or corporate transaction) increases in our capital base without the requirement for significant new investment in personnel, infrastructure, and operating costs. We believe that we have a distinctive business approach as compared to other alternative asset managers and are well positioned to continue to compound our permanent capital at high rates of return, while continuing to explore opportunities that leverage our core competencies.
We conduct our business and generate substantially all of our revenues primarily in the United States through one operating and reportable segment. Our single reportable segment reflects the allocation of our resources, operational decision-making and assessment of our financial performance by our chief operating decision makers using a consolidated, “one-firm approach,” with a single expense pool.
Trends Affecting Our Business
We benefit from AUM that principally consists of “permanent capital” defined as capital that is not subject to withdrawal or redemption at the option of the fund investor or stockholder. Our organic AUM growth relies primarily on compounding our permanent capital at high rates of return. As a result, unlike alternative asset managers who rely in large part on frequent fundraising to replace capital from traditional fixed-term drawdown funds and/or open-ended funds, our results are less sensitive to the market for raising investment capital, and we do not require the headcount and other costs required of a large fundraising operation enabling us to achieve greater operating leverage. Our permanent capital also enables us to invest with a long-term ownership horizon because we are not beholden to short-term investor capital flows.
We generate substantially all of our revenue from management fees and performance fees. We retain all of the management fees earned from our funds. With respect to performance fees, we are entitled to “Preferred Performance Fees,” which are the performance fees earned on the first five percentage points of fund returns, net of management fees, above the applicable high-water mark from certain core funds and subject to certain other offsettable fees.
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Table of Contents
Any realized performance fees in excess of the Preferred Performance Fees, which we refer to as the “Subordinated Performance Fees,” are paid to CompCo and used to compensate our investment professionals and certain other employees. To the extent realized performance fees are insufficient to pay some or all of the Preferred Performance Fee, the unpaid portion accrues to subsequent crystallization periods until paid in full. We believe this arrangement results in recurring revenue that is less volatile and more predictable than conventional performance fee arrangements, with the result that effectively all of our earnings are stable, recurring fee-related earnings. See “—Key Components of Our Results of Operations—Income—Performance Fees—Allocation of Performance Fee Revenue” for an illustration of our Preferred Performance Fee arrangement for the allocation of performance fee revenue, as well as the relevant high-water marks, over the six-year period ending December 31, 2025 and the three months ended March 31, 2026.
Because the management fees we earn are a function of the Fee-Paying AUM of our funds and the market capitalization of HHH, and the Preferred Performance Fees we receive depend on appreciation in Net Asset Value above a fund’s high-water mark, our results are correlated with the performance of our funds and HHH. Our results and the performance of our funds and HHH, in turn, may be influenced by the following factors:
32
Table of Contents
Howard Hughes Transaction
On May 5, 2025, we completed the Howard Hughes Transaction. Upon completion of the transaction, we along with our core funds owned 46.9% of outstanding shares of HHH common stock, although we have agreed generally to limit our voting power to 40.0% and our beneficial ownership to 47.0% of which currently 15.1% is owned by the Company and 31.0% is owned by the core funds. The compensation earned under the terms of the HHH Services Agreement is described below under “Management Fees – HHH Fees.” We intend to transform HHH, a long-term holding of our core funds, into a diversified holding company. On December 17, 2025, HHH entered into an agreement to acquire Vantage Group Holdings, Ltd. (“Vantage” and such acquisition, the “Vantage Acquisition”), a privately held specialty insurance and reinsurance holding company, for approximately $2.1 billion in cash. The Vantage Acquisition closed on June 4, 2026, and in connection with the closing, PSCM became the investment manager for Vantage and its insurance company subsidiaries for no incremental fee pursuant to investment management agreements.
Combined Transaction
On April 30, 2026, we and PSUS closed the Combined IPO of our common stock and PSUS Shares. In connection with the closing of the Combined IPO, we and PSUS also closed the Combined Private Placement of shares of our common stock and PSUS Shares. Gross proceeds to PSUS from the Combined Transaction, before deducting sales loads, placement fees and other offering expenses, were $5.0 billion, comprised of $2.026 billion raised in the PSUS IPO and $2.974 billion raised in the PSUS Private Placement (which includes our $200 million common shares investment in the PSUS Private Placement as part of the Anchor Investment (described below)). We delivered to each initial investor in the PSUS IPO, for no additional consideration, 1 share of our common stock for every 5 PSUS Shares purchased in the PSUS IPO. Similarly, we delivered to each private placement investor (but not to us in connection with our $200 million private placement investment) in the PSUS Private Placement, for no additional consideration, 1.5 shares of our common stock for every 5 PSUS Shares purchased in the PSUS Private Placement. Shares of our common stock and PSUS Shares began trading on the New York Stock Exchange under the trading symbols "PS" and "PSUS", respectively, on April 29, 2026.
In connection with the PSUS IPO and PSUS Private Placement, we (i) invested $250 million comprising (a) $200 million of common shares in the PSUS Private Placement and (b) $50 million of preferred shares in another private placement completed in connection with and upon completion of the PSUS IPO and (ii) agreed to maintain $100 million of our investment in PSUS common shares (or substantially equivalent economic position) for at least 25 years following the consummation of the Combined Transaction, subject to certain exceptions and unless prohibited by applicable law (the “Anchor Investment”). We financed this additional investment using borrowings under the Senior Credit Facilities described under " — Liquidity and Capital Resources."
For periods following the completion of the PSUS IPO, as investment manager, PSCM provides management services to PSUS and earns a quarterly management fee equal to 0.5% (2.0% on an annual basis) of the NAV of PSUS, payable in advance at the beginning of each quarter. A portion of these management fees from PSUS, or the “offsettable management fees,” will reduce the performance fees we receive from PSH. We are not entitled to any type of performance fee or incentive allocation from PSUS. We have not and do not expect to incur material incremental recurring general and administrative expense as a result of the PSUS IPO, although we incurred one-time transaction costs.
As a result of the Combined Transaction, we will recognize a deferred asset for the fair value (the “Share Value”) of the shares of our common stock delivered, for no additional consideration, to each initial investor in the PSUS IPO and each investor in the PSUS Private Placement (each, a “private placement investor”). The Share Value will be amortized as contra-revenue in management fees on a straight-line basis over a period of 10 years beginning on April 30, 2026, the closing date of the Combined Transaction.
33
Table of Contents
Corporate Conversion
We have historically been treated as a partnership for U.S. tax purposes and have not been subject to U.S. federal income taxes, although we are subject to certain state and local taxes as discussed in Note 2, “Significant Accounting Policies—Income Taxes” of the Consolidated Financial Statements included elsewhere in this Quarterly Report. In connection with the Combined Transaction, PS Holdco converted into Pershing Square Inc., a Nevada corporation by means of a statutory conversion, effective April 28, 2026. We refer to this conversion throughout this Quarterly Report as the “Corporate Conversion.” See “Summary—Reorganization Transactions—Corporate Conversion” in the IPO Prospectus for more information on the Corporate Conversion. Accordingly, we will be taxed as a corporation for U.S. federal and state income tax purposes and, as a result, we will be subject to U.S. federal income taxes, in addition to state and local taxes, with respect to our allocable share of any taxable income generated by us.
Key Components of Our Results of Operations
Income
We generate substantially all of our revenue from management fees and performance fees under the terms of the investment management agreements with the funds we manage. We also earn revenue from management fees under the terms of the HHH Services Agreement.
The simplified diagram below depicts the management fees and performance fees we earn from HHH and our core funds as of March 31, 2026. The diagram below is presented for illustrative purposes only to facilitate an understanding of our revenue streams prior to the completion of the Corporate Conversion and Combined Transaction.
* Management fee presented on an annual basis.
34
Table of Contents
Management Fees
Management fees consist of fees earned by PSCM for providing management and administrative services to our funds and other investment vehicles. PSCM acts as an investment manager providing management and administrative services to PSH, our private funds and other investment vehicles and, for periods following the completion of the Combined Transaction, PSUS, in accordance with each of their investment management agreements. As compensation for services to PSH and our private funds, PSCM receives a quarterly management fee equal to 0.375% (1.5% on an annual basis) of the Net Asset Value, before any accrued performance fees or allocation, (i) with respect to PSH, of its fee-paying shares, (ii) with respect to PSLP, of the capital accounts relating to each of its fee-paying limited partners, and (iii) with respect to PSINTL, of each series of its fee-paying shares of PSINTL. For periods following the completion of the Combined Transaction, PSCM also receives a quarterly management fee equal to 0.5% (2.0% on an annual basis) of the NAV of PSUS.
In connection with the Howard Hughes Transaction, we reduced the management fees paid to PSCM by each of the core funds by an amount, which was calculated as the HHH Fees multiplied by the percentage of HHH’s shares outstanding held by each such fund attributable to its fee-paying capital. Management fees from our funds are recognized over the period during which the related services are performed. See “Business—Advisory Fees and Compensation” in the IPO Prospectus for more information.
Management fees earned from our funds are generally calculated and paid to us quarterly in advance, based on the amount of fee-paying assets under management at the beginning of the quarter. Management fees are prorated for capital contributions in our private funds received during the quarter. Accordingly, changes in our management fee revenue from quarter to quarter are driven by changes in the quarterly balances of fee-paying assets under management and the relative magnitude and timing of contributions and withdrawals in our Private Funds in a given quarter.
Management Fees – HHH Fees
Management fees also consist of the quarterly HHH Fees earned by PSCM for providing investment advisory and other services to HHH pursuant to the terms of the HHH Services Agreement. Pursuant to the HHH Services Agreement, we support HHH’s new diversified holding company strategy by providing services to HHH, such as (i) investment advisory services, (ii) making recommendations with respect to hedging, balance sheet optimization and capital allocation, (iii) executing transactions, (iv) assisting HHH with business and corporate development functions, (v) making voting recommendations for HHH’s investments, (vi) assisting with and advising on fundraising, (vii) monitoring operations of HHH and its investments, subject to the day-to-day authority and responsibility of HHH’s management, (viii) providing recommendations for persons to serve as designees or deputies of HHH’s Chief Investment Officer, (ix) engaging and supervising HHH’s third-party service providers, (x) making dividend payment recommendations, and (xi) providing other services as may be agreed upon.
As compensation for providing services to HHH, we earn (i) a quarterly base fee (the “HHH Base Management Fee”) of $3,750,000 ($15,000,000 on an annual basis) and (ii) a quarterly variable fee (the “HHH Variable Management Fee” and together with the HHH Base Management Fee, the “HHH Fees”) equal to 0.375% of the excess value of the quarter-end stock price of shares of HHH common stock over an initial reference share price of $66.1453, multiplied by a reference share count of 59,393,938 shares. The HHH Base Management Fee and reference share price are subject to annual adjustment for inflation, based on the Core PCE Price Index, and the reference share price and reference share count are subject to adjustment for stock splits, reclassifications or similar capital changes.
The HHH Base Management Fee is calculated and paid to us quarterly in advance at the beginning of each quarter. The HHH Variable Management Fee is calculated and paid to us quarterly no later than fifteen days following the end of each quarter, based on the volume-weighted average trading price of shares of HHH common stock for the fifteen trading days ending on the last trading day of such quarter. Accordingly, changes in our revenue from the HHH Variable Management Fee will be driven by changes in the stock price of shares of HHH common stock from quarter to quarter. As of March 31, 2026, the reference share price was $67.6695 and the volume-weighted average trading price of shares of HHH common stock for the fifteen trading days ending on March 31, 2026 was $63.0229.
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Table of Contents
Management Fees – Contra-Revenue
We recognized a $292.8 million deferred asset for the premium paid above HHH’s publicly traded share price (the “HHH Premium”), which is deemed for accounting purposes to represent the amount paid to obtain the HHH Services Agreement, when we completed the Howard Hughes Transaction. The HHH Premium is amortized as contra-revenue in management fees on a straight-line basis over a period of 20 years beginning May 5, 2025.
In addition, in periods following the completion of the Combined Transaction, we will recognize a deferred asset for the relative fair value (the “Share Value”) of the shares of our common stock delivered, for no additional consideration, to each initial investor in the PSUS IPO and each private placement investor. The Share Value will be amortized as contra-revenue in management fees on a straight-line basis over a period of 10 years beginning on April 30, 2026, the closing date of the Combined Transaction.
The following table presents a summary of all sources of management fees:
|
Three months ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
Pershing Square Holdings, Ltd. |
$ |
54,233,716 |
|
$ |
48,449,424 |
|
Pershing Square, L.P. |
|
2,349,969 |
|
|
2,516,123 |
|
Pershing Square International, Ltd. |
|
796,443 |
|
|
1,236,822 |
|
HHH Base Management Fee |
|
3,786,000 |
|
|
— |
|
Total Management Fees - Gross |
$ |
61,166,128 |
|
$ |
52,202,369 |
|
|
|
|
|
|
||
Less: Amortization of HHH Premium |
|
(3,659,625 |
) |
|
— |
|
|
|
|
|
|
||
Total Management Fees - Net |
$ |
57,506,503 |
|
$ |
52,202,369 |
|
Performance Fees
Performance fees consist of fees and allocations earned by PSCM, as investment manager, from certain of our funds and other investment vehicles generally based on the NAV appreciation of such funds above a high-water mark. We recognize performance fees from PSH on a “net” basis giving effect to the “fee offset arrangement” as described below.
Performance fees or allocation, if earned, are payable upon the occurrence of crystallization events, which include, but are not limited to, December 31 of each year, withdrawals from our private funds and PSH’s payment of a dividend. Any crystallized or accrued performance fees for PSINTL and PSH earned during the year and outstanding at year-end are reported within performance fees receivable.
PSCM receives a “Variable Performance Fee” from PSH in an amount equal to 16% of the NAV appreciation (before giving effect to accrued performance fees) attributable to the fee-paying shares of PSH above a high-water mark minus a fee reduction of (i) 20% of the performance fees earned by PSCM from non-PSH funds (currently including PSLP and PSINTL) and (ii) 20% of management fees earned from any non-PSH funds that invest in public securities and do not charge performance fees (none as of March 31, 2026 but following the PSUS IPO, PSUS). We refer to this arrangement as the “fee offset arrangement.” In the event the offsettable fees in respect of a previous calculation period were not fully utilized in reducing the PSH performance fee for that period, the amount not utilized is carried forward. See Note 4, “Performance Fees / Allocations” to our Consolidated Financial Statements included in this Quarterly Report for more information.
We consolidate the results of PSGP, which earns a performance allocation from PSLP. However, because we did not have any direct equity interests in PSGP, 100% of these performance allocations are reflected in non-controlling interest on our Consolidated Statements of Operations included in this Quarterly Report. See “—Net (Income) Loss Attributable to Non-Controlling Interest” for more information.
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Table of Contents
Allocation of Performance Fee Revenue
For the periods presented in this Quarterly Report, our Consolidated Statements of Operations reflect an arrangement for the allocation of performance fee revenue from our funds and other investment vehicles pursuant to the Variable Compensation Agreement, dated as of May 31, 2024, by and among PS Holdco, PSCM, and CompCo (as amended and restated on March 3, 2026, the “VCA”) that was entered into in connection with the Strategic Investment.
The VCA had two primary purposes: (1) to provide PS Holdco with a preferred return-like entitlement of performance fees, which we refer to as the ‘‘Preferred Performance Fees,’’ received by our principal operating subsidiary, PSCM, and (2) to provide an important source of compensation for certain of our personnel, including our investment professionals, consistent with our historical practice of tying a significant portion of the compensation earned by such personnel, including our named executive officers, directly to the performance of the funds we manage. For additional information about the terms of the VCA, see “Executive Compensation—Narrative Disclosure to Summary Compensation Table—Variable Compensation Agreement” in the IPO Prospectus.
The table below presents the allocation of realized performance fees, as adjusted for offsettable fees pursuant to the fee offset arrangement and VCA, as between PS Holdco, PSCM and CompCo that would have been required by the VCA and the arrangement terminating and replacing the VCA implemented in connection with the Combined Transaction using our actual results for the periods presented. As illustrated below, the Preferred Performance Fee that PS Holdco is entitled to receive for a given period is a function of the applicable high-water mark of the fee-paying investors in the fund, as calculated as of January 1 for such period, as adjusted for capital activity and share buybacks. Preferred Performance Fees are earned from the first five percentage points of fund returns, net of management fees, above the applicable high-water mark from certain core funds and subject to certain other offsettable fees. The amount of the Preferred Performance Fees that is paid in any period depends on our realized performance fees. As a result, variability in our fund performance, which impacts both the high-water mark for a period (and accordingly the corresponding Preferred Performance Fee) and our realized performance fees, can result in variability in the amounts paid to us in any period in respect of the accrued Preferred Performance Fees. Any portion of the Preferred Performance Fee that we are entitled to receive from a fund that is not paid in a given period will accrue to the next period’s Preferred Performance Fee for such fund until paid by such fund.
While our Preferred Performance Fee arrangement for the allocation of performance fee revenue may result in variability in the amounts paid to us and CompCo from year to year, particularly if realized performance fees are not sufficient to satisfy the accrued Preferred Performance Fees, we believe it creates a more stable stream of recurring fee-related earnings over the long-term because of the consistency in the calculation of the Preferred Performance Fee that we are entitled to receive.
The table below has not been prepared in accordance with Article 11 of Regulation S-X and is presented for illustrative purposes only to facilitate an understanding of how the VCA and the successor arrangement operate.
|
|
Pershing Square Holdings, Ltd. |
||||||||||||||||||||||||||||
|
|
As of December 31, |
|
|
As of |
|
|
|
||||||||||||||||||||||
(in millions) |
|
2020 |
|
|
2021 |
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
|
2026 |
|
|
|
|||||||
High water mark of performance fee-paying investors(1) |
|
$ |
5,198.3 |
|
|
$ |
9,052.5 |
|
|
$ |
10,935.8 |
|
|
$ |
10,524.0 |
|
|
$ |
11,899.7 |
|
|
$ |
12,543.8 |
|
|
$ |
14,934.1 |
|
|
[A] |
Current year’s Preferred Performance Fee(2) |
|
|
41.6 |
|
|
|
72.4 |
|
|
|
87.5 |
|
|
|
84.2 |
|
|
|
95.2 |
|
|
|
100.4 |
|
|
|
119.5 |
|
|
[B] = [A] * 16% * 5% |
Less: Offsettable Management Fees(3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
[C] |
Current year’s Preferred Performance Fee owed to the Company(4) |
|
|
41.6 |
|
|
|
72.4 |
|
|
|
87.5 |
|
|
|
84.2 |
|
|
|
95.2 |
|
|
|
100.4 |
|
|
|
119.5 |
|
|
[D] = [B] + [C] |
Realized PSH Performance Fees(5) |
|
|
665.6 |
|
|
|
453.2 |
|
|
|
— |
|
|
|
306.2 |
|
|
|
226.6 |
|
|
|
489.2 |
|
|
|
— |
|
|
[E] |
Plus: Offsettable Performance Fees(6) |
|
|
16.0 |
|
|
|
3.6 |
|
|
|
— |
|
|
|
2.1 |
|
|
|
1.7 |
|
|
|
2.6 |
|
|
|
— |
|
|
[F] |
PSH Performance Fees available for allocation(7) |
|
|
681.6 |
|
|
|
456.9 |
|
|
|
— |
|
|
|
308.2 |
|
|
|
228.2 |
|
|
|
491.8 |
|
|
|
— |
|
|
[G] = [E] + [F] |
Current year’s Preferred Performance Fee paid to the Company(8) |
|
|
41.6 |
|
|
|
72.4 |
|
|
|
— |
|
|
|
84.2 |
|
|
|
95.2 |
|
|
|
100.4 |
|
|
|
— |
|
|
[H] = MIN ([D], [G]) |
Preferred Performance Fee Carryforward(9) from prior year(s) paid to the Company(10) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
87.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
[I] = MIN (([G] - [H]),Prior Year [K]) |
Total Preferred Performance Fees paid to the Company(11) |
|
|
41.6 |
|
|
|
72.4 |
|
|
|
— |
|
|
|
171.7 |
|
|
|
95.2 |
|
|
|
100.4 |
|
|
|
— |
|
|
[J] = [H] + [I] |
Preferred Performance Fee Carryforward(9) |
|
|
— |
|
|
|
— |
|
|
|
87.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
119.5 |
|
|
[K] = MAX (([D] +Prior Year [K] - [J]), 0) |
Subordinated Performance Fees paid to CompCo(12) |
|
$ |
640.0 |
|
|
$ |
384.5 |
|
|
$ |
— |
|
|
$ |
136.5 |
|
|
$ |
133.1 |
|
|
$ |
391.5 |
|
|
$ |
— |
|
|
[L] = [G] - [J] |
37
Table of Contents
|
|
Pershing Square International, Ltd. |
||||||||||||||||||||||||||||
|
|
As of December 31, |
|
|
As of |
|
|
|
||||||||||||||||||||||
(in millions) |
|
2020 |
|
|
2021 |
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
|
2026 |
|
|
|
|||||||
High water mark of performance fee paying investors(1) |
|
$ |
593.2 |
|
|
$ |
391.8 |
|
|
$ |
389.9 |
|
|
$ |
361.9 |
|
|
$ |
384.0 |
|
|
$ |
281.8 |
|
|
$ |
224.7 |
|
|
[A] |
Current year’s Preferred Performance Fee owed to the Company(2) |
|
|
4.7 |
|
|
|
3.1 |
|
|
|
3.1 |
|
|
|
2.9 |
|
|
|
3.1 |
|
|
|
2.3 |
|
|
|
1.8 |
|
|
[B] = [A] * 20% * 80% * 5% |
Realized PSINTL Performance Fees(5) |
|
|
79.9 |
|
|
|
18.2 |
|
|
|
— |
|
|
|
10.3 |
|
|
|
8.3 |
|
|
|
13.1 |
|
|
|
— |
|
|
[C] |
Less: Offsettable Performance Fees(6) |
|
|
(16.0 |
) |
|
|
(3.6 |
) |
|
|
— |
|
|
|
(2.1 |
) |
|
|
(1.7 |
) |
|
|
(2.6 |
) |
|
|
— |
|
|
[D] |
PSINTL Performance Fees available for allocation(7) |
|
|
63.9 |
|
|
|
14.5 |
|
|
|
— |
|
|
|
8.3 |
|
|
|
6.6 |
|
|
|
10.5 |
|
|
|
— |
|
|
[E] = [C] + [D] |
Current year’s Preferred Performance Fee paid to the Company(8) |
|
|
4.7 |
|
|
|
3.1 |
|
|
|
— |
|
|
|
2.9 |
|
|
|
3.1 |
|
|
|
2.3 |
|
|
|
— |
|
|
[F] = MIN ([B], [E]) |
Preferred Performance Fee Carryforward(9) from prior year paid to the Company(10) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
[G] = MIN (([E] - [F]), Prior Year [I]) |
Total Preferred Performance Fees paid to the Company(11) |
|
|
4.7 |
|
|
|
3.1 |
|
|
|
— |
|
|
|
6.0 |
|
|
|
3.1 |
|
|
|
2.3 |
|
|
|
— |
|
|
[H] = [F] + [G] |
Preferred Performance Fee Carryforward(9) |
|
|
— |
|
|
|
— |
|
|
|
3.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.8 |
|
|
[I] = MAX (([B] +Prior Year [I] - [H]), 0) |
Subordinated Performance Fees paid to CompCo(12) |
|
$ |
59.2 |
|
|
$ |
11.4 |
|
|
$ |
— |
|
|
$ |
2.3 |
|
|
$ |
3.6 |
|
|
$ |
8.3 |
|
|
$ |
— |
|
|
[J] = [E] - [H] |
38
Table of Contents
Expenses
General and Administrative Expense
General and administrative expense includes occupancy expenses, professional fees, IT related expenses, café expenses, travel and entertainment expenses, insurance expenses, office expenses and other expenses. We expect to incur additional general and administrative expense as a result of operating as a public company, including expenses to comply with the rules and regulations of the SEC and NYSE, as well as higher expenses for directors and officers insurance, investor relations and professional services.
While we have historically incurred expenses related to charitable donations, we do not intend to incur any future expenses related to charitable donations as a public company.
Affiliates Fee Rebate
Affiliates fee rebate consists of expenses related to the fee rebates provided to employees and their affiliates who own PSH shares. We historically rebated management and performance fees attributable to shares of PSH held by our employees and their affiliates. Following the Holdco Reorganization, we ceased to provide these rebates, which were instead paid by PSPG and CompCo. The affiliates fee rebate paid by PSPG following the Holdco Reorganization was recognized as an expense. Following the Combined Transaction, PSPG and CompCo no longer rebate the fees of employees and affiliates invested in PSH.
Profit-Sharing Partner Compensation
For the periods discussed herein, profit-sharing partner compensation consists of expenses related to our cash-based profits interests awards as well as a portion of our Long-Term Incentive Plan.
Prior to the internal reorganization of our ownership structure (the "Holdco Reorganization"), effective as of May 31, 2024, we had profit-sharing arrangements whereby certain personnel and former members of our advisory board, which was dissolved on April 1, 2023, were granted profits participation interests (“Profits Interest Awards”) in PSCM, PSGP and PSVII GP, LLC, (“PSVII GP”, the general partner of certain funds that ceased operations as of December 31, 2024). Profits Interest Awards entitled the profit-sharing partners to a portion of the net profits earned by PSCM, PSGP, PSVII GP and any future Pershing Square entity from performance fees or allocations and management fees, as applicable. Profits Interest Awards do not represent a substantive class of equity under ASC 718, Compensation and are accounted for as cash-based profit-sharing arrangements. As such, amounts distributed or allocated to profit-sharing partners are included in profit-sharing partner compensation in the unaudited Consolidated Statements of Operations.
The Company also established a Long-Term Incentive Plan (“LTIP”) in January 2017 for the benefit of certain profit-sharing partners (the “LTIP Partners”). Similar to the Profits Interest Awards, awards under the LTIP (the “LTIP Awards”) entitled the LTIP Partners to cash distributions pursuant to the terms of their respective agreements and granted them a reduced percentage of their Profits Interest Awards upon retirement under certain circumstances as described in the LTIP. Certain LTIP Partners’ LTIP Awards vested after 10 years of tenure as a profit-sharing partner. The LTIP Awards were treated as a separate class of profits interests from the Profits Interest Awards. The LTIP Awards have been accounted for based on their substance. Portions of the LTIP Awards in which rights to distributions of profits were based fully on the discretion of the managing member of PSCM were in substance a profit-sharing arrangement and were therefore recorded within profit-sharing partner compensation. Other portions of the LTIP Awards, when fully vested, entitled LTIP Partners upon retirement to a distribution equal to the percentage outlined in each of their agreements in perpetuity and represented a substantive class of equity. In connection with the Combined Transaction, the LTIP was replaced in part by certain interests of PSPG, referred to as M Units, that are redeemable, subject to vesting and certain other conditions, for shares of our common stock held by PSPG, in order to continue to align certain of our senior professionals with our long-term investment horizon. See “Executive Compensation—Compensation Arrangements To Be Adopted in Connection with the Combined Offering—Redeemable Interests in PS Partner Group” in the IPO Prospectus.
In conjunction with the Holdco Reorganization and as discussed above, we implemented an arrangement for the allocation of performance fee revenue between us and our senior professionals. In addition, in connection with the Holdco Reorganization, former holders of LTIP Awards in PSCM received interests in PSPG which were treated to the same extent as LTIP Awards. The unvested portion of interests in PSPG, issued upon the Combined Transaction as M Units, are to be amortized on a straight-line basis over the respective service periods.
39
Table of Contents
Following the Combined Transaction, the profit-sharing arrangement and LTIP related to interests in PSPG and PS Inc. and its consolidated subsidiaries (including PSCM) ceased. Amounts historically allocated to profit-sharing partners and LTIP participants will instead be distributed in the form of dividends to all holders of our common stock, including former profit-sharing partners and LTIP participants, in their capacity as equity holders and therefore, amounts distributed to former profit-sharing partners and LTIP participants will no longer be accounted for as compensation expense in accordance with ASC 710, Compensation–General. The LTIP will otherwise remain in full force and effect with respect to the existing interests held by LTIP participants in all other applicable Pershing Square entities, including CompCo and PSGP.
Employee Compensation and Benefits
Employee compensation and benefits reflects all compensation-related items not directly related to partners who participate in the profit-sharing arrangements and the LTIP, and includes salaries, benefits, payroll taxes and discretionary cash bonuses. Employee compensation and benefits also includes the cost of benefits paid to partners who participate in the profit-sharing arrangements and the LTIP. We generally recognize employee compensation and benefit expenses over the related service period. On an annual basis, discretionary cash bonuses generally comprise a significant portion of total employee compensation and benefits for employees who do not hold profits interests. Discretionary cash bonuses are dependent upon a variety of factors, including the performance of PSH, PSUS (following the completion of the Combined Transaction), our private funds and other investment vehicles for the year.
We granted 2,817,000 restricted stock units to certain employees and other service providers under our equity incentive plan (the “Plan”) in connection with the Combined Transaction and may in the future also grant awards to employees, directors, consultants and advisors under the Plan. These equity awards will be recorded as an expense in our consolidated statements of operations. We do not currently plan to grant awards under the Plan to our executive officers. For further discussion of the impact on employee compensation and benefits from subsequent changes to compensation arrangements, see “Unaudited Pro Forma Consolidated Financial Information” in the IPO Prospectus.
Depreciation and Amortization
Depreciation and amortization expense primarily consists of depreciation and amortization expenses associated with our fixed assets. Depreciation includes expenses associated with office furniture and fixtures, office computers, equipment and software. Amortization includes expenses associated with our leasehold improvements. Depreciation of fixed assets is calculated using the straight-line method over a period of three to seven years. Leasehold improvements are amortized over the shorter of the expected useful life or the remaining term of the related lease agreement. Fixed assets and leasehold improvements are recorded at cost less accumulated depreciation and amortization.
Non-Operating Income (Expenses)
Interest Income
Interest income consists of interest earned from our cash on hand.
Unrealized Gain (Loss) on HHH Shares Held at Fair Value
We account for our investment in HHH using the fair value option, in accordance with ASC 825-10, Financial Instruments. As a part of the election, we recognize any changes in the fair value of the investment in HHH as non-operating income or loss, commensurate with changes in the value of HHH’s publicly traded share price as of the end of the reporting period.
40
Table of Contents
Unrealized Gain (Loss) on Investment in Pershing Square, L.P. Held at Fair Value
Unrealized gain (loss) on investment in Pershing Square, L.P. held at fair value consists of the gain or loss related to PSGP’s investment in PSLP. PSGP’s investment in PSLP is held at fair value, which is determined using the Net Asset Value of PSLP in accordance with the ASC 820, Fair Value Measurement, “practical expedient,” as defined by GAAP. We do not hold any direct equity interests in PSGP, the general partner of PSLP. As a result, all income or loss related to PSGP is allocated to non-controlling interest.
Other Income (Expense)
Other income (expense) primarily consists of our office space sublease and license and reimbursement of office services.
Prior to December 31, 2025, Mr. Ackman’s family office, TABLE Management, L.P. (“TABLE”), licensed a portion of our office space under a license agreement which also granted TABLE the use of certain office-related services. As of December 31, 2025, TABLE no longer licenses office space from us, and, as a result, following such date, we no longer receive the related income.
In addition, we had subleased a portion of Pershing Square’s office space to NEOX Public Benefit LLC (“Subtenant”), an entity partially owned by Mr. Ackman. The sublease commenced on December 5, 2022, with rent payments commencing on May 1, 2023 following five months of rent abatement, and was originally set to expire on December 31, 2033. On January 30, 2026, we agreed to terminate our sublease arrangement with Subtenant, effective as of March 1, 2026, who then entered into a direct relationship with the landlord. Starting March 1, 2026, we no longer receive the related income or bear the associated lease expense, although Subtenant may continue the use of certain office-related services for which we will continue to receive certain related income.
Interest Expense
Interest expense primarily consists of interest incurred on borrowings and debt issuance costs that are amortized using the effective interest method over the term of the debt.
Income Tax
Income tax expense consists of taxes paid or payable by our operating subsidiaries. We are subject to the provisions of ASC 740, Income Taxes. This standard requires the evaluation of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether it is “more-likely-than-not” to be sustained by the applicable tax authority. Uncertain tax positions in which the benefit to be realized does not meet the “more-likely-than-not” threshold would be recorded as a tax expense in the current year.
Prior to the Corporate Conversion, we were a partnership for U.S. tax purposes and not subject to U.S. federal income taxes. Accordingly, no provision has been made for federal income taxes, as the respective partners were individually liable for the taxes on their allocable share of taxable income or loss prior to this date.
We are subject to certain state and local taxes. UBT is recorded on a quarterly basis at the rate of 4% based on the net taxable income apportioned to New York City. We record interest and penalties related to income taxes, if any, within income tax expense.
For the tax years ending December 31, 2026 and 2025, the Partnership and its parent entity PSPG both elected to be subject to the New York State Pass-Through Entity Tax (“NYS PTET”) and the New York City Pass-Through Entity Tax (“NYC PTET” and together with NYS PTET, “PTET”). PTET grants eligible partners a tax credit on their individual New York State and New York City income tax returns, and any PTET owed is a joint liability of (i) PS Holdco or PSPG and (ii) each partner.
41
Table of Contents
In connection with the Corporate Conversion, we became a corporation for U.S. federal and state income tax purposes. As a result, subsequent to the Corporate Conversion, we are subject to U.S. federal income taxes, in addition to state and local taxes.
Net (Income) Loss Attributable to Non-Controlling Interest
A portion of the equity and income or loss from entities that are consolidated but not wholly owned by us is allocated to other owners. The aggregate of the income or loss and corresponding equity that is not owned by us is included within non-controlling interest in the Consolidated Financial Statements. We do not hold any direct equity interests in PSGP, the general partner for PSLP. As a result, all income or loss related to PSGP is allocated to non-controlling interest, and the capital balance represents the economic interests of other owners in PSGP.
Key Operating Metrics
We have developed and use various key operating metrics to assess and monitor the operating performance of our business. We believe that these metrics provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team.
Our calculations of total assets under management, fee-paying assets under management and permanent capital AUM may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers. In addition, our calculation of total assets under management includes the fair value of invested capital in our funds from our personnel regardless of whether such invested capital is subject to fees. Our definitions of total assets under management and fee-paying assets under management are not based on any definition of total assets under management and fee-paying assets under management that is set forth in the agreements governing the investment funds we manage.
Total Assets Under Management
Total assets under management reflects (i) with respect to our core funds and PSVII, the net assets of our core funds and PSVII as calculated in accordance with GAAP or IFRS, as applicable, while adding back accrued performance fees and the principal value of PSH’s outstanding bonds (approximately $3.7 billion and $3.6 billion as of December 31, 2025 and March 31, 2026, respectively) without double counting the investment made by any of our funds in PSVII and (ii) with respect to HHH, the market capitalization of HHH plus its net mortgages, notes, and loans payable as disclosed in its most recent periodic report filed with the SEC.
|
|
Assets Under Management |
|
||||||||||||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
PSVII(2) |
|
|
Total |
|
||||||||||
Balance at December 31, 2023 |
|
|
$ |
14,414.6 |
|
|
|
$ |
1,384.3 |
|
|
|
$ |
591.7 |
|
|
|
$ |
1,519.5 |
|
|
|
$ |
17,910.1 |
|
Private Funds Subscriptions |
|
|
— |
|
|
|
|
40.8 |
|
|
|
— |
|
|
|
— |
|
|
|
|
40.8 |
|
|||
Private Funds Redemptions |
|
|
— |
|
|
|
|
(246.0 |
) |
|
|
|
(209.2 |
) |
|
|
|
(1,422.4 |
) |
|
|
|
(1,877.6 |
) |
|
PSH Dividends |
|
|
|
(107.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(107.2 |
) |
|||
PSH Buybacks |
|
|
|
(117.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(117.9 |
) |
|||
Management Fees |
|
|
|
(188.8 |
) |
|
|
|
(11.1 |
) |
|
|
|
(6.0 |
) |
|
|
|
(0.2 |
) |
|
|
|
(206.1 |
) |
Performance Fees |
|
|
|
(226.6 |
) |
|
|
— |
|
|
|
|
(8.3 |
) |
|
|
— |
|
|
|
|
(234.9 |
) |
||
Change in Market Value / Market Capitalization |
|
|
|
1,589.1 |
|
|
|
|
159.9 |
|
|
|
|
65.4 |
|
|
|
|
(96.9 |
) |
|
|
|
1,717.5 |
|
Increase (Decrease) in EUR FX Translation of PSH Bond Proceeds |
|
|
|
(34.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(34.1 |
) |
|||
Balance at December 31, 2024 |
|
|
$ |
15,329.2 |
|
|
|
$ |
1,328.0 |
|
|
|
$ |
433.6 |
|
|
|
$ |
— |
|
|
|
$ |
17,090.7 |
|
42
Table of Contents
|
|
Assets Under Management |
|
|||||||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
HHH |
|
|
Total Core |
|
|||||
Balance at December 31, 2024 |
|
$ |
15,329.2 |
|
|
$ |
1,328.0 |
|
|
$ |
433.6 |
|
|
$ |
— |
|
|
$ |
17,090.7 |
|
Private Funds Subscriptions |
|
|
— |
|
|
|
104.3 |
|
|
|
80.0 |
|
|
|
— |
|
|
|
184.3 |
|
Private Funds Redemptions |
|
|
— |
|
|
|
(232.2 |
) |
|
|
(199.6 |
) |
|
|
— |
|
|
|
(431.8 |
) |
Initiation of HHH Services Agreement(2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,256.4 |
|
|
|
9,256.4 |
|
PSH Dividends |
|
|
(118.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(118.1 |
) |
PSH Buybacks |
|
|
(369.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(369.1 |
) |
Management Fees |
|
|
(208.0 |
) |
|
|
(10.4 |
) |
|
|
(4.5 |
) |
|
|
— |
|
|
|
(222.9 |
) |
Performance Fees |
|
|
(489.2 |
) |
|
|
— |
|
|
|
(13.1 |
) |
|
|
— |
|
|
|
(502.3 |
) |
Change in Market Value / Market Capitalization(3) |
|
|
3,222.6 |
|
|
|
340.9 |
|
|
|
112.7 |
|
|
|
768.6 |
|
|
|
4,444.8 |
|
PSH Bond Issuance |
|
|
1,235.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,235.5 |
|
Increase (Decrease) in EUR FX Translation of PSH Bond Proceeds |
|
|
98.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
98.0 |
|
Balance at December 31, 2025 |
|
$ |
18,700.9 |
|
|
$ |
1,530.6 |
|
|
$ |
409.0 |
|
|
$ |
10,025.0 |
|
|
$ |
30,665.6 |
|
|
|
Assets Under Management |
|
|||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
Total Core |
|
||||
Balance at December 31, 2024 |
|
$ |
15,329.2 |
|
|
$ |
1,328.0 |
|
|
$ |
433.6 |
|
|
$ |
17,090.7 |
|
Private Funds Subscriptions |
|
|
— |
|
|
|
11.6 |
|
|
|
— |
|
|
|
11.6 |
|
Private Funds Redemptions |
|
|
— |
|
|
|
(31.3 |
) |
|
|
(34.9 |
) |
|
|
(66.2 |
) |
PSH Dividends |
|
|
(29.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
(29.9 |
) |
PSH Buybacks |
|
|
(137.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(137.2 |
) |
Management Fees |
|
|
(48.4 |
) |
|
|
(2.5 |
) |
|
|
(1.2 |
) |
|
|
(52.2 |
) |
Performance Fees |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Change in Market Value |
|
|
(162.9 |
) |
|
|
2.0 |
|
|
|
4.9 |
|
|
|
(156.0 |
) |
Change in EUR FX Translation of PSH Bond |
|
|
22.7 |
|
|
|
— |
|
|
|
— |
|
|
|
22.7 |
|
Balance at March 31, 2025 |
|
$ |
14,973.4 |
|
|
$ |
1,307.7 |
|
|
$ |
402.3 |
|
|
$ |
16,683.5 |
|
|
|
Assets Under Management |
|
|||||||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
HHH |
|
|
Total Core |
|
|||||
Balance at December 31, 2025 |
|
$ |
18,700.9 |
|
|
$ |
1,530.6 |
|
|
$ |
409.0 |
|
|
$ |
10,025.0 |
|
|
$ |
30,665.6 |
|
Private Funds Subscriptions |
|
|
— |
|
|
|
30.0 |
|
|
|
— |
|
|
|
— |
|
|
|
30.0 |
|
Private Funds Redemptions |
|
|
— |
|
|
|
(73.8 |
) |
|
|
(4.4 |
) |
|
|
— |
|
|
|
(78.2 |
) |
PSH Dividends |
|
|
(32.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(32.3 |
) |
PSH Buybacks |
|
|
(80.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(80.0 |
) |
Management Fees |
|
|
(54.2 |
) |
|
|
(2.3 |
) |
|
|
(0.8 |
) |
|
|
— |
|
|
|
(57.4 |
) |
Change in Market Value / Market Capitalization(2) |
|
|
(2,403.6 |
) |
|
|
(214.4 |
) |
|
|
(62.5 |
) |
|
|
(1,142.6 |
) |
|
|
(3,823.1 |
) |
Change in EUR FX Translation of PSH Bond |
|
|
(22.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22.3 |
) |
Balance at March 31, 2026 |
|
$ |
16,108.4 |
|
|
$ |
1,270.1 |
|
|
$ |
341.3 |
|
|
$ |
8,882.4 |
|
|
$ |
26,602.3 |
|
43
Table of Contents
The table below presents the AUM of our core funds and HHH as of December 31 for each of the last seven years, and as of March 31, 2026.
|
|
Assets Under Management ($ in millions) |
|
|
CAGR |
|
||||||||||||||||||||||||||||||
Fund |
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
March 31, |
|
|
2020- Q1'26(4) |
|
|||||||||
PSH(1) |
|
$ |
7,121 |
|
|
$ |
11,153 |
|
|
$ |
14,409 |
|
|
$ |
12,215 |
|
|
$ |
14,415 |
|
|
$ |
15,329 |
|
|
$ |
18,701 |
|
|
$ |
16,108 |
|
|
|
14 |
% |
% Growth |
|
|
|
|
|
57 |
% |
|
|
29 |
% |
|
|
(15 |
%) |
|
|
18 |
% |
|
|
6 |
% |
|
|
22 |
% |
|
|
(14 |
)% |
|
|
|
||
PSLP |
|
|
727 |
|
|
|
903 |
|
|
|
1,472 |
|
|
|
1,217 |
|
|
|
1,384 |
|
|
|
1,328 |
|
|
|
1,531 |
|
|
|
1,270 |
|
|
|
9 |
% |
% Growth |
|
|
|
|
|
24 |
% |
|
|
63 |
% |
|
|
(17 |
%) |
|
|
14 |
% |
|
|
(4 |
%) |
|
|
15 |
% |
|
|
(17 |
)% |
|
|
|
||
PSINTL |
|
|
726 |
|
|
|
510 |
|
|
|
629 |
|
|
|
520 |
|
|
|
592 |
|
|
|
434 |
|
|
|
409 |
|
|
|
341 |
|
|
|
(11 |
%) |
% Growth |
|
|
|
|
|
(30 |
%) |
|
|
23 |
% |
|
|
(17 |
%) |
|
|
14 |
% |
|
|
(27 |
%) |
|
|
(6 |
%) |
|
|
(17 |
%) |
|
|
|
||
Total Core Funds |
|
$ |
8,573 |
|
|
$ |
12,566 |
|
|
$ |
16,510 |
|
|
$ |
13,951 |
|
|
$ |
16,391 |
|
|
$ |
17,091 |
|
|
$ |
20,641 |
|
|
$ |
17,720 |
|
|
|
12 |
% |
% Growth |
|
|
|
|
|
47 |
% |
|
|
31 |
% |
|
|
(15 |
%) |
|
|
17 |
% |
|
|
4 |
% |
|
|
21 |
% |
|
|
(14 |
)% |
|
|
|
||
HHH(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,025 |
|
|
|
8,882 |
|
|
|
|
|
Total Core Funds & HHH |
|
$ |
8,573 |
|
|
$ |
12,566 |
|
|
$ |
16,510 |
|
|
$ |
13,951 |
|
|
$ |
16,391 |
|
|
$ |
17,091 |
|
|
$ |
30,666 |
|
|
$ |
26,602 |
|
|
|
20 |
% |
% Growth |
|
|
|
|
|
47 |
% |
|
|
31 |
% |
|
|
(15 |
%) |
|
|
17 |
% |
|
|
4 |
% |
|
|
79 |
% |
|
|
(13 |
)% |
|
|
|
||
Fee-Paying Assets Under Management
Fee-Paying AUM refers to (i) with respect to our core funds and PSVII, the AUM we manage and earn a performance fee and/or management fee from for our core funds and PSVII and (ii) with respect to HHH, the market capitalization of HHH. We believe this measure is useful to stockholders as it provides insight into the capital base upon which we earn our fees.
|
|
Fee-Paying Assets Under Management |
|
|||||||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
PSVII(2) |
|
|
Total |
|
|||||
Balance at December 31, 2023 |
|
$ |
12,062.6 |
|
|
$ |
742.6 |
|
|
$ |
426.0 |
|
|
$ |
67.3 |
|
|
$ |
13,298.5 |
|
Private Funds Subscriptions |
|
— |
|
|
|
11.6 |
|
|
— |
|
|
|
— |
|
|
|
11.6 |
|
||
Private Funds Redemptions |
|
— |
|
|
|
(143.0 |
) |
|
|
(129.5 |
) |
|
|
(62.8 |
) |
|
|
(335.3 |
) |
|
PSH Dividends |
|
|
(107.2 |
) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
(107.2 |
) |
||
PSH Buybacks |
|
|
(117.9 |
) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
(117.9 |
) |
||
Management Fees |
|
|
(188.8 |
) |
|
|
(11.1 |
) |
|
|
(6.0 |
) |
|
|
(0.2 |
) |
|
|
(206.1 |
) |
Performance Fees / Allocations |
|
|
(226.6 |
) |
|
|
(14.5 |
) |
|
|
(8.3 |
) |
|
|
— |
|
|
|
(249.4 |
) |
Change in Market Value / Market Capitalization |
|
|
1,589.1 |
|
|
|
84.3 |
|
|
|
47.6 |
|
|
|
(4.3 |
) |
|
|
1,716.7 |
|
Balance at December 31, 2024 |
|
$ |
13,011.2 |
|
|
$ |
669.8 |
|
|
$ |
329.8 |
|
|
$ |
— |
|
|
$ |
14,010.9 |
|
Less: Non-Permanent Fee-Paying AUM(3) |
|
— |
|
|
|
(669.8 |
) |
|
|
(329.8 |
) |
|
|
— |
|
|
|
(999.6 |
) |
|
Permanent Capital AUM |
|
$ |
13,011.2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
13,011.2 |
|
44
Table of Contents
|
|
Fee-Paying Assets Under Management |
|
|||||||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
HHH |
|
|
Total Core |
|
|||||
Balance at December 31, 2024 |
|
$ |
13,011.2 |
|
|
$ |
669.8 |
|
|
$ |
329.8 |
|
|
$ |
— |
|
|
$ |
14,010.9 |
|
Private Funds Subscriptions |
|
— |
|
|
|
7.9 |
|
|
— |
|
|
|
— |
|
|
7.9 |
|
|||
Private Funds Redemptions |
|
— |
|
|
|
(149.0 |
) |
|
|
(157.6 |
) |
|
|
— |
|
|
|
(306.6 |
) |
|
Private Funds Transfer |
|
— |
|
|
|
0.9 |
|
|
— |
|
|
|
— |
|
|
|
0.9 |
|
||
Initiation of HHH Services Agreement(2) |
|
— |
|
|
— |
|
|
— |
|
|
|
4,007.3 |
|
|
|
4,007.3 |
|
|||
PSH Dividends |
|
|
(118.1 |
) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
(118.1 |
) |
||
PSH Buybacks |
|
|
(369.1 |
) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
(369.1 |
) |
||
Management Fees |
|
|
(208.0 |
) |
|
|
(10.4 |
) |
|
|
(4.5 |
) |
|
|
— |
|
|
|
(222.9 |
) |
Performance Fees / Allocations |
|
|
(489.2 |
) |
|
|
(29.7 |
) |
|
|
(13.1 |
) |
|
|
— |
|
|
|
(532.1 |
) |
Change in Market Value / Market Capitalization(3) |
|
|
3,222.6 |
|
|
|
158.5 |
|
|
|
70.1 |
|
|
|
730.3 |
|
|
|
4,181.5 |
|
Balance at December 31, 2025 |
|
$ |
15,049.4 |
|
|
$ |
648.0 |
|
|
$ |
224.7 |
|
|
$ |
4,737.6 |
|
|
$ |
20,659.7 |
|
Less: Non-Permanent Fee-Paying AUM(4) |
|
— |
|
|
|
(648.0 |
) |
|
|
(224.7 |
) |
|
|
— |
|
|
|
(872.7 |
) |
|
Permanent Capital AUM |
|
$ |
15,049.4 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,737.6 |
|
|
$ |
19,787.0 |
|
|
|
Fee-Paying Assets Under Management |
|
|||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
Total Core |
|
||||
Balance at December 31, 2024 |
|
$ |
13,011.2 |
|
|
$ |
669.8 |
|
|
$ |
329.8 |
|
|
$ |
14,010.9 |
|
Private Funds Subscriptions |
|
|
— |
|
|
|
2.9 |
|
|
|
— |
|
|
|
2.9 |
|
Private Funds Redemptions |
|
|
— |
|
|
|
(20.7 |
) |
|
|
(34.9 |
) |
|
|
(55.6 |
) |
PSH Dividends |
|
|
(29.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
(29.9 |
) |
PSH Buybacks |
|
|
(137.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(137.2 |
) |
Management Fees |
|
|
(48.4 |
) |
|
|
(2.5 |
) |
|
|
(1.2 |
) |
|
|
(52.2 |
) |
Performance Fees / Allocations |
|
|
(0.1 |
) |
|
|
(0.0 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Change in Market Value |
|
|
(162.9 |
) |
|
|
1.0 |
|
|
|
3.7 |
|
|
|
(158.2 |
) |
Private Funds Transfer |
|
|
— |
|
|
|
2.7 |
|
|
|
— |
|
|
|
2.7 |
|
Balance at March 31, 2025 |
|
$ |
12,632.8 |
|
|
$ |
653.3 |
|
|
$ |
297.4 |
|
|
$ |
13,583.4 |
|
Less: Non-Permanent Fee-Paying AUM(2) |
|
|
— |
|
|
|
(653.3 |
) |
|
|
(297.4 |
) |
|
|
(950.6 |
) |
Permanent Capital AUM |
|
$ |
12,632.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
12,632.8 |
|
45
Table of Contents
|
|
Fee-Paying Assets Under Management |
|
|||||||||||||||||
(in millions) |
|
PSH(1) |
|
|
PSLP |
|
|
PSINTL |
|
|
HHH |
|
|
Total Core |
|
|||||
Balance at December 31, 2025 |
|
$ |
15,049.4 |
|
|
$ |
648.0 |
|
|
$ |
224.7 |
|
|
$ |
4,737.6 |
|
|
$ |
20,659.7 |
|
Private Funds Subscriptions |
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
|
|
— |
|
|
|
0.6 |
|
Private Funds Redemptions |
|
|
— |
|
|
|
(23.9 |
) |
|
|
(4.4 |
) |
|
|
— |
|
|
|
(28.3 |
) |
PSH Dividends |
|
|
(32.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(32.3 |
) |
PSH Buybacks |
|
|
(80.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(80.0 |
) |
Management Fees |
|
|
(54.2 |
) |
|
|
(2.3 |
) |
|
|
(0.8 |
) |
|
|
— |
|
|
|
(57.4 |
) |
Performance Fees / Allocations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Change in Market Value / Market Capitalization(2) |
|
|
(2,403.6 |
) |
|
|
(89.4 |
) |
|
|
(34.3 |
) |
|
|
(965.0 |
) |
|
|
(3,492.4 |
) |
Private Funds Transfer |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Balance at March 31, 2026 |
|
$ |
12,479.2 |
|
|
$ |
533.0 |
|
|
$ |
185.1 |
|
|
$ |
3,772.6 |
|
|
$ |
16,970.0 |
|
Less: Non-Permanent Fee-Paying AUM(3) |
|
|
— |
|
|
|
(533.0 |
) |
|
|
(185.1 |
) |
|
|
— |
|
|
|
(718.2 |
) |
Permanent Capital AUM |
|
$ |
12,479.2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,772.6 |
|
|
$ |
16,251.8 |
|
The table below presents the Fee-Paying AUM of our core funds and HHH as of December 31 for each of the last seven years, and as of March 31, 2026.
|
|
Fee-Paying Assets Under Management ($ in millions) |
|
|
CAGR |
|
||||||||||||||||||||||||||||||
Fund |
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
March 31, |
|
|
2020 - Q1'26(3) |
|
|||||||||
PSH(1) |
|
$ |
5,721 |
|
|
$ |
9,053 |
|
|
$ |
11,409 |
|
|
$ |
9,880 |
|
|
$ |
12,063 |
|
|
$ |
13,011 |
|
|
$ |
15,049 |
|
|
$ |
12,479 |
|
|
|
13 |
% |
% Growth |
|
|
|
|
|
58 |
% |
|
|
26 |
% |
|
|
(13 |
%) |
|
|
22 |
% |
|
|
8 |
% |
|
|
16 |
% |
|
|
(17 |
)% |
|
|
|
||
PSLP |
|
|
610 |
|
|
|
667 |
|
|
|
735 |
|
|
|
634 |
|
|
|
743 |
|
|
|
670 |
|
|
|
648 |
|
|
|
533 |
|
|
|
(2 |
)% |
% Growth |
|
|
|
|
|
9 |
% |
|
|
10 |
% |
|
|
(14 |
%) |
|
|
17 |
% |
|
|
(10 |
%) |
|
|
(3 |
%) |
|
|
(18 |
%) |
|
|
|
||
PSINTL |
|
|
717 |
|
|
|
495 |
|
|
|
397 |
|
|
|
333 |
|
|
|
426 |
|
|
|
330 |
|
|
|
225 |
|
|
|
185 |
|
|
|
(19 |
)% |
% Growth |
|
|
|
|
|
(31 |
%) |
|
|
(20 |
%) |
|
|
(16 |
%) |
|
|
28 |
% |
|
|
(23 |
%) |
|
|
(32 |
%) |
|
|
(18 |
%) |
|
|
|
||
Total Core Funds |
|
$ |
7,047 |
|
|
$ |
10,215 |
|
|
$ |
12,541 |
|
|
$ |
10,847 |
|
|
$ |
13,231 |
|
|
$ |
14,011 |
|
|
$ |
15,922 |
|
|
$ |
13,197 |
|
|
|
11 |
% |
% Growth |
|
|
|
|
|
45 |
% |
|
|
23 |
% |
|
|
(14 |
%) |
|
|
22 |
% |
|
|
6 |
% |
|
|
14 |
% |
|
|
(17 |
)% |
|
|
|
||
HHH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,738 |
|
|
|
3,773 |
|
|
|
|
|||||||
Total Core Funds & HHH |
|
$ |
7,047 |
|
|
$ |
10,215 |
|
|
$ |
12,541 |
|
|
$ |
10,847 |
|
|
$ |
13,231 |
|
|
$ |
14,011 |
|
|
$ |
20,660 |
|
|
$ |
16,970 |
|
|
|
15 |
% |
% Growth |
|
|
|
|
|
45 |
% |
|
|
23 |
% |
|
|
(14 |
%) |
|
|
22 |
% |
|
|
6 |
% |
|
|
47 |
% |
|
|
(18 |
)% |
|
|
|
||
46
Table of Contents
Permanent Capital AUM
Permanent capital AUM refers to the portion of Fee-Paying AUM that is not subject to withdrawal or redemption at the option of the fund investor or stockholder. We believe this measure is useful to stockholders as our permanent capital base allows us to take a long-term view and be opportunistic during periods of market volatility, enables superior, long-term investment and produces a financial profile characterized by steady, predictable and recurring management fees. Permanent capital is also a differentiating talent attraction and retention tool, allowing us to hire and retain the top analysts for our own investment team, high-quality employees throughout our company, and experienced senior executives for certain of our portfolio companies.
The following table compares permanent capital AUM for our core funds and HHH as of December 31, 2024 and 2025 and as of March 31, 2026. Following the Combined Transaction, our permanent capital AUM materially increased as PSUS became our flagship NYSE-listed permanent capital vehicle.
Permanent Capital AUM (in millions) |
|
As of |
|
||||||||||
|
|
December 31, 2024 |
|
|
December 31, 2025 |
|
|
March 31, 2026 |
|
||||
Core Funds and HHH(1) |
|
$ |
13,011.2 |
|
|
$ |
19,787.0 |
|
|
$ |
|
16,251.8 |
|
Fund Performance
The tables below provide performance information for our core funds to facilitate an understanding of our results of operations for the periods presented. The tables below provide the contributors and detractors to gross performance of the funds’ portfolios for the twelve-month periods ended December 31, 2024 and December 31, 2025, and the three-month periods ended March 31, 2025 and March 31, 2026. The fund return information for individual funds reflected in the tables below are not necessarily indicative of the future performance of any particular fund. An investment in us is not an investment in any of our funds. This track record presentation is unaudited and does not purport to represent the respective fund’s financial results in accordance with GAAP or IFRS, as applicable. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. See “Risk Factors—Risks Related to Our Business and Industry—The historical returns attributable to our funds and HHH, including those presented in this prospectus, should not be considered as indicative of the future results of our funds or HHH or of our future results or of any returns expected on an investment in our common stock” in the IPO Prospectus.
Pershing Square Holdings, Ltd. |
|
|
Pershing Square, L.P. |
|
|
Pershing Square International, Ltd. |
|
|||||||||
January 1, 2024 – December 31, 2024 |
|
|
January 1, 2024 – December 31, 2024 |
|
|
January 1, 2024 – December 31, 2024 |
|
|||||||||
Alphabet Inc. |
|
|
4.9 |
% |
|
Alphabet Inc. |
|
|
4.2 |
% |
|
Alphabet Inc. |
|
|
4.4 |
% |
Chipotle Mexican Grill, Inc. |
|
|
4.4 |
% |
|
Chipotle Mexican Grill, Inc. |
|
|
3.9 |
% |
|
Chipotle Mexican Grill, Inc. |
|
|
4.1 |
% |
Hilton Worldwide Holdings Inc. |
|
|
4.0 |
% |
|
Brookfield Corporation |
|
|
3.3 |
% |
|
Brookfield Corporation |
|
|
3.4 |
% |
Brookfield Corporation |
|
|
3.8 |
% |
|
Hilton Worldwide Holdings Inc. |
|
|
3.3 |
% |
|
Hilton Worldwide Holdings Inc. |
|
|
3.2 |
% |
Federal Home Loan Mortgage Corporation |
|
|
2.3 |
% |
|
Federal Home Loan Mortgage Corporation |
|
|
2.3 |
% |
|
Federal Home Loan Mortgage Corporation |
|
|
2.5 |
% |
Federal National Mortgage Association |
|
|
2.2 |
% |
|
Federal National Mortgage Association |
|
|
1.8 |
% |
|
Federal National Mortgage Association |
|
|
2.3 |
% |
Share Buyback Accretion |
|
|
0.4 |
% |
|
Howard Hughes Holdings Inc. |
|
|
(0.7 |
)% |
|
Howard Hughes Holdings Inc. |
|
|
(0.5 |
)% |
Howard Hughes Holdings Inc. |
|
|
(0.6 |
)% |
|
Restaurant Brands International Inc. |
|
|
(1.3 |
)% |
|
Restaurant Brands International Inc. |
|
|
(1.4 |
)% |
Bond Interest Expense |
|
|
(0.6 |
)% |
|
Nike, Inc. |
|
|
(1.5 |
)% |
|
Nike, Inc. |
|
|
(1.6 |
)% |
Restaurant Brands International Inc. |
|
|
(1.6 |
)% |
|
Interest Rate Swaptions |
|
|
(1.6 |
)% |
|
Interest Rate Swaptions |
|
|
(1.6 |
)% |
Universal Music Group N.V. |
|
|
(1.7 |
)% |
|
Universal Music Group N.V. |
|
|
(1.6 |
)% |
|
Universal Music Group N.V. |
|
|
(2.2 |
)% |
Interest Rate Swaptions |
|
|
(1.9 |
)% |
|
All Other Positions and Other Income/Expense |
|
|
(0.1 |
)% |
|
All Other Positions and Other Income/Expense |
|
|
(0.2 |
)% |
Nike, Inc. |
|
|
(2.2 |
)% |
|
|
|
|
|
|
|
|
|
|
||
All Other Positions and Other Income/Expense |
|
|
0.4 |
% |
|
|
|
|
|
|
|
|
|
|
||
Contributors Less Detractors (Gross Return)(1) |
|
|
13.8 |
% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
12.0 |
% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
12.4 |
% |
47
Table of Contents
Pershing Square Holdings, Ltd. |
|
|
Pershing Square, L.P. |
|
|
Pershing Square International, Ltd. |
|
|||||||||
January 1, 2025 - December 31, 2025 |
|
|
January 1, 2025 - December 31, 2025 |
|
|
January 1, 2025 - December 31, 2025 |
|
|||||||||
Alphabet Inc. |
|
|
10.3 |
% |
|
Alphabet Inc. |
|
|
9.0 |
% |
|
Alphabet Inc. |
|
|
8.4 |
% |
Federal National Mortgage Association |
|
|
5.8 |
% |
|
Federal Home Loan Mortgage Corporation |
|
|
5.2 |
% |
|
Federal Home Loan Mortgage Corporation |
|
|
5.9 |
% |
Federal Home Loan Mortgage Corporation |
|
|
5.0 |
% |
|
Federal National Mortgage Association |
|
|
4.7 |
% |
|
Federal National Mortgage Association |
|
|
5.1 |
% |
Brookfield Corporation |
|
|
3.5 |
% |
|
Brookfield Corporation |
|
|
3.0 |
% |
|
Brookfield Corporation |
|
|
3.0 |
% |
Uber Technologies, Inc. |
|
|
2.7 |
% |
|
Amazon.com, Inc. |
|
|
2.2 |
% |
|
Amazon.com, Inc. |
|
|
2.1 |
% |
Amazon.com, Inc. |
|
|
2.4 |
% |
|
Uber Technologies, Inc. |
|
|
2.2 |
% |
|
Uber Technologies, Inc. |
|
|
2.1 |
% |
Share Buyback Accretion |
|
|
1.2 |
% |
|
Universal Music Group N.V. |
|
|
1.1 |
% |
|
Hilton Worldwide Holdings Inc. |
|
|
0.9 |
% |
Hilton Worldwide Holdings Inc. |
|
|
1.0 |
% |
|
Hilton Worldwide Holdings Inc. |
|
|
0.8 |
% |
|
Restaurant Brands International Inc. |
|
|
0.6 |
% |
Universal Music Group N.V. |
|
|
0.7 |
% |
|
Meta Platforms, Inc. |
|
|
0.6 |
% |
|
Meta Platforms, Inc. |
|
|
0.6 |
% |
Meta Platforms, Inc. |
|
|
0.7 |
% |
|
Restaurant Brands International Inc. |
|
|
0.5 |
% |
|
Universal Music Group N.V. |
|
|
0.6 |
% |
Restaurant Brands International Inc. |
|
|
0.5 |
% |
|
Nike, Inc. |
|
|
(1.8 |
%) |
|
Howard Hughes Holdings Inc. |
|
|
0.5 |
% |
Bond Interest Expense |
|
|
(0.8 |
%) |
|
Chipotle Mexican Grill, Inc. |
|
|
(3.3 |
%) |
|
Nike, Inc. |
|
|
(1.9 |
%) |
Nike, Inc. |
|
|
(2.5 |
%) |
|
All Other Positions and Other Income/Expense |
|
|
0.4 |
% |
|
Chipotle Mexican Grill, Inc. |
|
|
(3.6 |
%) |
Chipotle Mexican Grill, Inc. |
|
|
(4.6 |
%) |
|
|
|
|
|
|
All Other Positions and Other Income/Expense |
|
|
(0.2 |
%) |
|
All Other Positions and Other Income/Expense |
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
||
Contributors Less Detractors (Gross Return)(1) |
|
|
26.5 |
% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
24.6 |
% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
24.1 |
% |
Pershing Square Holdings, Ltd. |
|
|
Pershing Square, L.P. |
|
|
Pershing Square International, Ltd. |
|
|||||||||
January 1, 2025 – March 31, 2025 |
|
|
January 1, 2025 – March 31, 2025 |
|
|
January 1, 2025 – March 31, 2025 |
|
|||||||||
Federal National Mortgage Association |
|
|
2.3 |
% |
|
Federal National Mortgage Association |
|
|
1.9 |
% |
|
Federal National Mortgage Association |
|
|
3.1 |
% |
Universal Music Group N.V. |
|
|
1.7 |
% |
|
Universal Music Group N.V. |
|
|
1.8 |
% |
|
Federal Home Loan Mortgage Corporation |
|
|
1.8 |
% |
Federal Home Loan Mortgage Corporation |
|
|
1.4 |
% |
|
Federal Home Loan Mortgage Corporation |
|
|
1.6 |
% |
|
Universal Music Group N.V. |
|
|
1.7 |
% |
Uber Technologies, Inc. |
|
|
1.1 |
% |
|
Uber Technologies, Inc. |
|
|
0.9 |
% |
|
Uber Technologies, Inc. |
|
|
0.9 |
% |
Share Buyback Accretion |
|
|
0.5 |
% |
|
Brookfield Corporation |
|
|
(1.0 |
)% |
|
Brookfield Corporation |
|
|
(1.0 |
)% |
Bond Interest Expense |
|
|
(0.1 |
)% |
|
Chipotle Mexican Grill, Inc. |
|
|
(1.2 |
)% |
|
Chipotle Mexican Grill, Inc. |
|
|
(1.2 |
)% |
Brookfield Corporation |
|
|
(1.2 |
)% |
|
Nike, Inc. |
|
|
(1.4 |
)% |
|
Nike, Inc. |
|
|
(1.5 |
)% |
Chipotle Mexican Grill, Inc. |
|
|
(1.6 |
)% |
|
Alphabet Inc. |
|
|
(1.8 |
)% |
|
Alphabet Inc. |
|
|
(1.8 |
)% |
Nike, Inc. |
|
|
(1.9 |
)% |
|
All Other Positions and Other Income/Expense |
|
|
(0.6 |
)% |
|
All Other Positions and Other Income/Expense |
|
|
(0.9 |
)% |
Alphabet Inc. |
|
|
(2.3 |
)% |
|
|
|
|
|
|
|
|
|
|
||
All Other Positions and Other Income/Expense |
|
|
(0.8 |
)% |
|
|
|
|
|
|
|
|
|
|
||
Contributors Less Detractors (Gross Return)(1) |
|
|
(0.9 |
)% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
0.2 |
% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
1.1 |
% |
48
Table of Contents
Pershing Square Holdings, Ltd. |
|
|
Pershing Square, L.P. |
|
|
Pershing Square International, Ltd. |
|
|||||||||
January 1, 2026 – March 31, 2026 |
|
|
January 1, 2026 – March 31, 2026 |
|
|
January 1, 2026 – March 31, 2026 |
|
|||||||||
Restaurant Brands International Inc. |
|
|
0.9 |
% |
|
Restaurant Brands International Inc. |
|
|
0.7 |
% |
|
Restaurant Brands International Inc. |
|
|
0.6 |
% |
Share Buyback Accretion |
|
|
0.2 |
% |
|
Microsoft Corporation |
|
|
(1.0 |
)% |
|
Microsoft Corporation |
|
|
(1.0 |
)% |
Bond Interest Expense |
|
|
(0.2 |
)% |
|
Amazon.com, Inc. |
|
|
(1.0 |
)% |
|
Amazon.com, Inc. |
|
|
(1.0 |
)% |
Microsoft Corporation |
|
|
(1.2 |
)% |
|
Meta Platforms Inc |
|
|
(1.1 |
)% |
|
Federal National Mortgage Association |
|
|
(1.0 |
)% |
Amazon.com, Inc. |
|
|
(1.3 |
)% |
|
Uber Technologies, Inc. |
|
|
(1.4 |
)% |
|
Meta Platforms Inc |
|
|
(1.1 |
)% |
Meta Platforms Inc |
|
|
(1.4 |
)% |
|
Brookfield Corporation |
|
|
(1.5 |
)% |
|
Uber Technologies, Inc. |
|
|
(1.4 |
)% |
Howard Hughes Holdings Inc. |
|
|
(1.5 |
)% |
|
Howard Hughes Holdings Inc. |
|
|
(1.7 |
)% |
|
Brookfield Corporation |
|
|
(1.5 |
)% |
Uber Technologies, Inc. |
|
|
(1.7 |
)% |
|
Federal National Mortgage Association |
|
|
(1.9 |
)% |
|
Universal Music Group N.V. |
|
|
(2.7 |
)% |
Brookfield Corporation |
|
|
(1.9 |
)% |
|
Federal Home Loan Mortgage Corporation |
|
|
(2.5 |
)% |
|
Howard Hughes Holdings Inc. |
|
|
(2.8 |
)% |
Federal National Mortgage Association |
|
|
(2.3 |
)% |
|
Universal Music Group N.V. |
|
|
(2.7 |
)% |
|
Federal Home Loan Mortgage Corporation |
|
|
(3.6 |
)% |
Federal Home Loan Mortgage Corporation |
|
|
(2.4 |
)% |
|
All Other Positions and Other Income/Expense |
|
|
0.3 |
% |
|
All Other Positions and Other Income/Expense |
|
|
0.2 |
% |
Universal Music Group N.V. |
|
|
(3.4 |
)% |
|
|
|
|
|
|
|
|
|
|
||
All Other Positions and Other Income/Expense |
|
|
0.3 |
% |
|
|
|
|
|
|
|
|
|
|
||
Contributors Less Detractors (Gross Return)(1) |
|
|
(15.9 |
)% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
(13.8 |
)% |
|
Contributors Less Detractors (Gross Return)(1) |
|
|
(15.3 |
)% |
49
Table of Contents
Consolidated Results of Operations
The following tables set forth information regarding our consolidated results of operations for the three months ended March 31, 2026 and 2025:
|
|
For the Three Months Ended March 31, |
|
|
Change |
|
|||||||||||||
($ in thousands) |
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
|||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Management fees, net(1) |
|
$ |
|
57,507 |
|
|
$ |
|
52,202 |
|
|
$ |
|
5,305 |
|
|
|
10 |
% |
Performance fees(2) |
|
|
|
— |
|
|
|
|
102 |
|
|
|
|
(102 |
) |
|
NM |
|
|
Total revenue |
|
|
|
57,507 |
|
|
|
|
52,305 |
|
|
|
|
5,202 |
|
|
|
10 |
% |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expense |
|
|
|
15,987 |
|
|
|
|
10,135 |
|
|
|
|
5,852 |
|
|
|
58 |
% |
Affiliates fee rebate |
|
|
|
14,475 |
|
|
|
|
11,612 |
|
|
|
|
2,863 |
|
|
|
25 |
% |
Profit-sharing partner compensation(2) |
|
|
|
11,767 |
|
|
|
|
15,448 |
|
|
|
|
(3,681 |
) |
|
|
(24 |
%) |
Employee compensation and benefits |
|
|
|
9,627 |
|
|
|
|
4,141 |
|
|
|
|
5,486 |
|
|
|
132 |
% |
Depreciation and amortization expense |
|
|
|
579 |
|
|
|
|
578 |
|
|
|
|
1 |
|
|
|
0 |
% |
Total expenses |
|
|
|
52,435 |
|
|
|
|
41,913 |
|
|
|
|
10,522 |
|
|
|
25 |
% |
Operating income (loss) |
|
|
|
5,072 |
|
|
|
|
10,391 |
|
|
|
|
(5,319 |
) |
|
|
(51 |
%) |
Non-operating income (expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
|
628 |
|
|
|
|
10,461 |
|
|
|
|
(9,833 |
) |
|
|
(94 |
%) |
Unrealized gain (loss) on HHH shares held at fair value |
|
|
|
(148,590 |
) |
|
|
|
— |
|
|
|
|
(148,590 |
) |
|
NM |
|
|
Unrealized gain (loss) on investment in Pershing Square, L.P. held at fair value(2) |
|
|
|
(10,944 |
) |
|
|
|
93 |
|
|
|
|
(11,037 |
) |
|
|
(11,868 |
%) |
Other income (expense) |
|
|
|
(3,328 |
) |
|
|
|
1,261 |
|
|
|
|
(4,589 |
) |
|
|
(364 |
%) |
Interest expense |
|
|
|
(514 |
) |
|
|
|
(588 |
) |
|
|
|
74 |
|
|
|
(13 |
%) |
Total non-operating income (loss) |
|
|
|
(162,748 |
) |
|
|
|
11,227 |
|
|
|
|
(173,975 |
) |
|
|
(1,550 |
%) |
Net income (loss) before taxes |
|
|
|
(157,676 |
) |
|
|
|
21,618 |
|
|
|
|
(179,294 |
) |
|
|
(829 |
%) |
Income tax expense |
|
|
|
857 |
|
|
|
|
1,794 |
|
|
|
|
(937 |
) |
|
|
(52 |
%) |
Net income (loss) |
|
|
|
(158,534 |
) |
|
|
|
19,824 |
|
|
|
|
(178,358 |
) |
|
|
(900 |
%) |
Less: Net (income) loss attributable to non-controlling interest |
|
|
|
10,944 |
|
|
|
|
(93 |
) |
|
|
|
11,037 |
|
|
|
(11,868 |
%) |
Net income (loss) attributable to Pershing Square Holdco, L.P. |
|
$ |
|
(147,590 |
) |
|
$ |
|
19,731 |
|
|
$ |
|
(167,321 |
) |
|
|
(848 |
%) |
Comparison of the Three Months Ended March 31, 2026 and 2025
Revenue
Management Fees
Total management fees increased $9.0 million, or 17%, on a gross basis, and $5.3 million, or 10%, net of the HHH contra-revenue, from the three months ended March 31, 2025 to the three months ended March 31, 2026, primarily driven by an increase of $5.8 million in management fees earned from PSH and an increase of $3.8 million in fees earned pursuant to the HHH Services Agreement, partially offset by contra-revenue of $3.7 million in relation to the amortization of the HHH Premium.
50
Table of Contents
Performance Fees
Total performance fees decreased $0.1 million from the three months ended March 31, 2025 to the three months ended March 31, 2026, as there were no performance fees earned for the three months ended March 31, 2026.
Expenses
General and Administrative Expense
General and administrative expense increased $5.9 million, or 58%, from the three months ended March 31, 2025 to the three months ended March 31, 2026, primarily driven by an increase of $4.1 million in deal expenses related to the Combined Transaction and an increase of $0.6 million in legal fees, partially offset by a decrease of $1.3 million in professional fees related to the HHH Transaction.
Affiliates Fee Rebate
The affiliates fee rebate increased $2.9 million, or 25%, from the three months ended March 31, 2025 to the three months ended March 31, 2026, primarily driven by an increase in fee rebates to partners as a result of an increase in earned management fees.
Profit-Sharing Partner Compensation
Profit-sharing partner compensation decreased $3.7 million, or 24%, from the three months ended March 31, 2025 to the three months ended March 31, 2026. The decrease was primarily driven by the retirement of an LTIP partner in 2025, which resulted in the recognition of a $2.2 million termination benefit for the three months ended March 31, 2025.
Employee Compensation and Benefits
Employee compensation and benefits increased $5.5 million, or 132%, from the three months ended March 31, 2025 to the three months ended March 31, 2026, primarily driven by an increase of $3.9 million in severance expense and an increase in headcount.
Depreciation and Amortization Expense
Depreciation and amortization expense was effectively flat from the three months ended March 31, 2025 to the three months ended March 31, 2026.
Non-operating Income (Expenses)
Interest Income
Interest income decreased $9.8 million, or 94%, from the three months ended March 31, 2025 to the three months ended March 31, 2026. Interest income for the three months ended March 31, 2025 was primarily related to interest earned on cash held following the Strategic Investment. The cash raised from the Strategic Investment was invested, in part, in the HHH Transaction, which led to a decrease in our cash balance and a resulting decrease in interest income earned in subsequent periods including the three months ended March 31, 2026.
Unrealized Gain (Loss) on HHH Shares Held at Fair Value
The unrealized loss on HHH shares held at fair value increased $148.6 million from the three months ended March 31, 2025 to the three months ended March 31, 2026, as a result of the decrease in the share price of HHH’s publicly traded common stock during the three months ended March 31, 2026.
51
Table of Contents
Unrealized Gain (Loss) on Investment in Pershing Square, L.P. Held at Fair Value
Unrealized gain (loss) on investment in PSLP held at fair value decreased $11.0 million, or 11,868%, from the three months ended March 31, 2025 to the three months ended March 31, 2026. For the three months ended March 31, 2025 and 2026, PSGP recorded a gain of $0.1 million and a loss of $10.9 million, respectively, from its investment in PSLP based on PSLP’s fund performance. As of March 31, 2026 and December 31, 2025, PSGP had an ownership interest of approximately 4.3% and 5.2%, respectively, in PSLP.
Other Income (Expense)
Other income (expense) decreased $4.6 million, or 364%, from the three months ended March 31, 2025 to the three months ended March 31, 2026, primarily driven by the termination of the sublease with NEOX resulting in the derecognition of the deferred sublease incentive in an amount of $4.1 million.
Interest Expense
Interest expense decreased $0.1 million, or 13%, from the three months ended March 31, 2025 to the three months ended March 31, 2026 due to decreasing interest rates.
Income Tax Expense
Income tax expense decreased $0.9 million, or 52% from the three months ended March 31, 2025 to the three months ended March 31, 2026, primarily due to a lower apportionment of the Company’s business activity to New York City subject to UBT.
Net (Income) Loss Attributable to Non-Controlling Interest
Net (income) loss attributable to non-controlling interest increased by $11.0 million, or 11,868%, from the three months ended March 31, 2025 to the three months ended March 31, 2026, as a result of the increased loss allocated from PSLP. For the three months ended March 31, 2025, the net (income) allocated from PSLP was $0.1 million. For the three months ended March 31, 2026, the net loss allocated from PSLP was $10.9 million.
52
Table of Contents
Consolidated Changes in Financial Condition
The following table sets forth information regarding our consolidated changes in financial condition as of March 31, 2026 and December 31, 2025:
|
|
As of |
|
|
Change |
|
||||||||||||
($ in thousands) |
|
March 31, 2026 |
December 31, 2025 |
|
|
$ |
|
|
% |
|
||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
46,845 |
|
|
$ |
|
55,398 |
|
|
$ |
|
(8,553 |
) |
|
|
(15 |
%) |
Restricted cash |
|
|
119 |
|
|
|
|
119 |
|
|
|
|
— |
|
|
|
0 |
% |
Due from affiliates(1) |
|
|
7,628 |
|
|
|
|
15,614 |
|
|
|
|
(7,985 |
) |
|
|
(51 |
%) |
Prepaid expenses |
|
|
3,753 |
|
|
|
|
1,345 |
|
|
|
|
2,408 |
|
|
|
179 |
% |
Investment in Howard Hughes Holdings Inc. (“HHH”), at fair value |
|
|
569,340 |
|
|
|
|
717,930 |
|
|
|
|
(148,590 |
) |
|
|
(21 |
%) |
Deferred HHH Services Agreement premium |
|
|
279,499 |
|
|
|
|
283,158 |
|
|
|
|
(3,660 |
) |
|
|
(1 |
%) |
Investment in Pershing Square, L.P., at fair value(1) |
|
|
54,670 |
|
|
|
|
79,288 |
|
|
|
|
(24,618 |
) |
|
|
(31 |
%) |
Fixed assets and leasehold improvements (net of accumulated depreciation of $18,172 and $17,593) |
|
|
14,418 |
|
|
|
|
14,984 |
|
|
|
|
(566 |
) |
|
|
(4 |
%) |
Lease right-of-use assets |
|
|
8,031 |
|
|
|
|
28,441 |
|
|
|
|
(20,410 |
) |
|
|
(72 |
%) |
Other assets |
|
|
6,173 |
|
|
|
|
3,466 |
|
|
|
|
2,708 |
|
|
|
78 |
% |
Deferred sublease incentive |
|
|
— |
|
|
|
|
4,129 |
|
|
|
|
(4,129 |
) |
|
|
(100 |
%) |
Performance fees receivable |
|
|
— |
|
|
|
|
497,330 |
|
|
|
|
(497,330 |
) |
|
|
(100 |
%) |
Total assets |
|
$ |
990,476 |
|
|
|
$ |
1,701,202 |
|
|
|
$ |
(710,725 |
) |
|
|
(42 |
%) |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable |
|
$ |
18,789 |
|
|
|
|
8,620 |
|
|
|
|
10,169 |
|
|
|
118 |
% |
Accrued compensation and benefits(1) |
|
|
15,398 |
|
|
|
|
426,094 |
|
|
|
|
(410,695 |
) |
|
|
(96 |
%) |
Performance fee distributions payable(1) |
|
|
10,655 |
|
|
|
|
54,839 |
|
|
|
|
(44,184 |
) |
|
|
(81 |
%) |
Deferred revenue |
|
|
3,786 |
|
|
|
|
3,786 |
|
|
|
|
— |
|
|
|
0 |
% |
Deferred tax liability |
|
|
699 |
|
|
|
|
— |
|
|
|
|
699 |
|
|
NM |
|
|
Taxes payable |
|
|
263 |
|
|
|
|
17,029 |
|
|
|
|
(16,767 |
) |
|
|
(98 |
%) |
Loans payable |
|
|
34,800 |
|
|
|
|
34,800 |
|
|
|
|
— |
|
|
|
0 |
% |
Operating lease liabilities |
|
|
21,608 |
|
|
|
|
42,673 |
|
|
|
|
(21,065 |
) |
|
|
(49 |
%) |
Affiliates fee rebate payable |
|
|
— |
|
|
|
|
24,144 |
|
|
|
|
(24,144 |
) |
|
NM |
|
|
Distributions payable to partners |
|
|
— |
|
|
|
|
10,105 |
|
|
|
|
(10,105 |
) |
|
NM |
|
|
Total liabilities |
|
|
105,998 |
|
|
|
|
622,089 |
|
|
|
|
(516,090 |
) |
|
|
(83 |
%) |
Partners’ capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Partners’ capital controlling interests |
|
|
838,387 |
|
|
|
|
1,016,418 |
|
|
|
|
(178,031 |
) |
|
|
(18 |
%) |
Non-controlling interest in consolidated variable interest entities(1) |
|
|
46,091 |
|
|
|
|
62,695 |
|
|
|
|
(16,604 |
) |
|
|
(26 |
%) |
Total partners’ capital |
|
|
884,478 |
|
|
|
|
1,079,113 |
|
|
|
|
(194,635 |
) |
|
|
(18 |
%) |
Total liabilities and partners’ capital |
|
$ |
990,476 |
|
|
|
$ |
1,701,202 |
|
|
$ |
|
(710,725 |
) |
|
|
(42 |
%) |
Comparison of Balances as of March 31, 2026 and December 31, 2025
Cash and Cash Equivalents
Cash and cash equivalents decreased $8.6 million, or 15%, from December 31, 2025 to March 31, 2026, primarily driven by the use of cash for deal expenses related to the Combined Transaction.
53
Table of Contents
Investment in Howard Hughes Holdings Inc. (“HHH”), at fair value
Investment in HHH shares, at fair value decreased by $148.6 million, or 21%, from December 31, 2025 to March 31, 2026, due to a reduction in the share price of HHH’s publicly traded common stock which is used to value the investment.
Performance Fees Receivable
Performance fees receivable decreased $497.3 million, or 100%, from December 31, 2025 to March 31, 2026, because a majority of performance fees crystallize at the end of the year and are collected shortly thereafter.
Accrued Compensation and Benefits
Accrued compensation and benefits decreased $410.7 million, or 96%, from December 31, 2025 to March 31, 2026. Distributions of profit-sharing partner compensation are accrued in the year in which performance fees crystallize, but are not paid out until after year end.
Non-GAAP Financial Measures
We report certain financial measures that are not required by, or presented in accordance with, GAAP. Management uses these non-GAAP financial measures to assess the performance of our business across reporting periods and believes this information is useful to investors for the same reasons. See below for our definitions of Fee-Related Earnings (“FRE”) and Distributable Earnings (“DE”).
Fee-Related Earnings
FRE is a non-GAAP financial measure used by us to evaluate our business by highlighting earnings from recurring management fees and Preferred Performance Fees. We believe FRE is useful to investors because it provides additional insights into the fee-driven operating profitability of our business that is not directly based on the net income of the funds we manage. FRE represents management fees and Preferred Performance Fees less the compensation directly related to the management fees and performance fees, which includes salaries, benefits, payroll taxes and discretionary cash bonuses and other operating expenses, and after deducting “Subordinated Performance Fees,” which consist of amounts in excess of Preferred Performance Fees which are payable to CompCo pursuant to the arrangements described below.
As described above under “— Key Components of Our Results of Operations—Income—Allocation of Performance Fee Revenue,” we implemented the VCA in connection with the Strategic Investment. However, in order to facilitate comparisons with our results following the Combined Transaction, we have presented FRE for the periods presented on a basis that reflects the allocation of our historical performance fees as between the Preferred Performance Fees and Subordinated Performance Fees that the VCA would have required. Although the VCA was terminated in connection with the Combined Transaction and PSCM issued the Preferred Profits Interest (as defined below) to us and the Subordinated Profits Interest (as defined below) to CompCo, the terms of the Preferred Profits Interest and the Subordinated Profits Interest generally provide for the same calculation of Preferred Performance Fees and Subordinated Performance Fees, and the same allocation of such fees between us and CompCo, as historically provided by the VCA.
Distributable Earnings
DE is a non-GAAP financial measure used to assess performance and amounts available for distribution or dividends, including to our personnel and owners of PSPG and holders of our common stock. DE represents FRE plus interest income or less interest expense, as applicable.
These non-GAAP financial measures should not be considered a substitute for, superior to or an alternative to net income attributable to Pershing Square Holdco, L.P., which is the most directly comparable GAAP measure. Further, these non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider non-GAAP financial measures in isolation or as a substitute for GAAP measures including revenues, net income (loss) and net income attributable to Pershing Square Holdco, L.P. We may calculate or present these non-GAAP financial measures differently
54
Table of Contents
than other companies who report measures with the same or similar names, and as a result, the non-GAAP financial measures we report may not be comparable.
The following tables set forth our FRE and DE calculations and a reconciliation of DE and FRE to the most directly comparable financial measure calculated in accordance with GAAP for the years ended December 31, 2020, 2021, 2022, 2023, 2024 and 2025 and the three months ended March 31, 2025 and March 31, 2026:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
For the Year Ended December 31, |
|
|
|
For the Three Months Ended March 31, |
|
|
CAGR(6) |
|
|||||||||||||||||||||||||||||||
($ in thousands) |
|
2020 |
|
|
|
2021 |
|
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
|
|
2025 |
|
|
2026 |
|
|
2020-2025 |
|
|||||||||||
Management fees |
|
$ |
117,286 |
|
|
|
$ |
162,443 |
|
|
|
$ |
163,515 |
|
|
$ |
170,801 |
|
|
$ |
206,067 |
|
|
$ |
230,420 |
|
|
|
$ |
52,202 |
|
|
$ |
57,507 |
|
|
|
14 |
% |
||
Management fees – contra-revenue(1) |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,612 |
|
|
|
|
— |
|
|
|
3,660 |
|
|
|
|
|||
Preferred Performance Fees – current year(2) |
|
|
46,332 |
|
|
|
|
75,555 |
|
|
|
|
33 |
|
|
|
87,087 |
|
|
|
98,269 |
|
|
|
102,604 |
|
|
|
|
102 |
|
|
|
— |
|
|
|
|
|||
Preferred Performance Fees – carryforwards |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
90,573 |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
FRE revenue |
|
$ |
163,618 |
|
|
|
$ |
237,998 |
|
|
|
$ |
163,548 |
|
|
$ |
348,461 |
|
|
$ |
304,336 |
|
|
$ |
342,636 |
|
|
|
$ |
52,304 |
|
|
$ |
61,167 |
|
|
|
16 |
% |
||
% Growth |
|
|
|
|
|
|
45 |
% |
|
|
|
(31 |
%) |
|
|
113 |
% |
|
|
(13 |
%) |
|
|
13 |
% |
|
|
|
|
|
|
17 |
% |
|
|
|
|||||
Less: Employee compensation and benefits |
|
$ |
(19,170 |
) |
|
|
$ |
(12,699 |
) |
|
|
$ |
(10,859 |
) |
|
$ |
(13,124 |
) |
|
$ |
(13,164 |
) |
|
$ |
(20,228 |
) |
|
|
$ |
(4,141 |
) |
|
$ |
(9,627 |
) |
|
|
|
|||
Less: General and administrative expense, net(3) |
|
|
(11,029 |
) |
|
|
|
(13,428 |
) |
|
|
|
(21,801 |
) |
|
|
(18,380 |
) |
|
|
(45,145 |
) |
|
|
(36,834 |
) |
|
|
|
(8,874 |
) |
|
|
(15,263 |
) |
|
|
|
|||
Less: Depreciation and amortization expense |
|
|
(2,762 |
) |
|
|
|
(2,985 |
) |
|
|
|
(5,035 |
) |
|
|
(2,758 |
) |
|
|
(2,778 |
) |
|
|
(2,301 |
) |
|
|
|
(577 |
) |
|
|
(579 |
) |
|
|
|
|||
Plus: Non-recurring expenses - G&A(4) |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
25,890 |
|
|
|
14,652 |
|
|
|
|
3,715 |
|
|
|
7,860 |
|
|
|
|
|||
Plus: Non-recurring expenses - compensation(5) |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
4,114 |
|
|
|
|
|||
Less: FRE expenses |
|
$ |
(32,961 |
) |
|
|
$ |
(29,112 |
) |
|
|
$ |
(37,695 |
) |
|
$ |
(34,262 |
) |
|
$ |
(35,197 |
) |
|
$ |
(44,711 |
) |
|
|
$ |
(9,877 |
) |
|
$ |
(13,495 |
) |
|
|
6 |
% |
||
% Growth |
|
|
|
|
|
|
(12 |
%) |
|
|
|
29 |
% |
|
|
(9 |
%) |
|
|
3 |
% |
|
|
27 |
% |
|
|
|
|
|
|
37 |
% |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fee-related earnings |
|
$ |
130,657 |
|
|
|
$ |
208,886 |
|
|
|
$ |
125,853 |
|
|
$ |
314,199 |
|
|
$ |
269,139 |
|
|
$ |
297,925 |
|
|
|
$ |
42,427 |
|
|
$ |
47,672 |
|
|
|
18 |
% |
||
% Margin |
|
|
79.9 |
% |
|
|
|
87.8 |
% |
|
|
|
77.0 |
% |
|
|
90.2 |
% |
|
|
88.4 |
% |
|
|
87.0 |
% |
|
|
|
81.1 |
% |
|
|
77.9 |
% |
|
|
|
|||
% Growth |
|
|
|
|
|
|
60 |
% |
|
|
|
(40 |
%) |
|
|
150 |
% |
|
|
(14 |
%) |
|
|
11 |
% |
|
|
|
|
|
|
12 |
% |
|
|
14 |
% |
||||
Interest income (expense), net |
|
$ |
(1,139 |
) |
|
|
$ |
(932 |
) |
|
|
$ |
(2,529 |
) |
|
$ |
(6,330 |
) |
|
$ |
25,413 |
|
|
$ |
14,608 |
|
|
|
$ |
9,873 |
|
|
$ |
114 |
|
|
|
|
|||
Distributable earnings |
|
$ |
129,518 |
|
|
|
$ |
207,954 |
|
|
|
$ |
123,324 |
|
|
$ |
307,869 |
|
|
$ |
294,552 |
|
|
$ |
312,533 |
|
|
|
$ |
52,300 |
|
|
$ |
47,786 |
|
|
|
19 |
% |
||
% Growth |
|
|
|
|
|
|
61 |
% |
|
|
|
(41 |
%) |
|
|
150 |
% |
|
|
(4 |
%) |
|
|
6 |
% |
|
|
|
|
|
|
(9 |
)% |
|
|
|
|||||
55
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the Year Ended December 31, |
|
|
|
For the Three Months Ended March 31, |
|
||||||||||||||||||||||||||
($ in thousands) |
|
2020 |
|
|
2021 |
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
|
|
2025 |
|
|
2026 |
|
||||||||
Net income (loss) attributable to Pershing Square Holdco, L.P. |
|
$ |
481,852 |
|
|
$ |
300,064 |
|
|
$ |
51,839 |
|
|
$ |
209,460 |
|
|
$ |
(14,151 |
) |
|
$ |
249,777 |
|
|
|
$ |
19,731 |
|
|
$ |
(147,590 |
) |
Net (income) loss attributable to non-controlling interest |
|
|
(60,000 |
) |
|
|
(31,678 |
) |
|
|
4,729 |
|
|
|
(24,261 |
) |
|
|
(16,541 |
) |
|
|
(31,933 |
) |
|
|
|
(93 |
) |
|
|
10,944 |
|
Net income |
|
$ |
541,852 |
|
|
$ |
331,742 |
|
|
$ |
47,110 |
|
|
$ |
233,721 |
|
|
$ |
2,390 |
|
|
$ |
281,710 |
|
|
|
$ |
19,824 |
|
|
$ |
(158,534 |
) |
% Margin |
|
|
56.2 |
% |
|
|
48.7 |
% |
|
|
28.8 |
% |
|
|
45.6 |
% |
|
|
0.5 |
% |
|
|
36.9 |
% |
|
|
|
|
|
|
|
||
Income tax expense |
|
|
17,400 |
|
|
|
10,516 |
|
|
|
4,793 |
|
|
|
18,170 |
|
|
|
15,985 |
|
|
|
22,309 |
|
|
|
|
1,794 |
|
|
|
857 |
|
Net income before taxes |
|
$ |
559,252 |
|
|
$ |
342,258 |
|
|
$ |
51,903 |
|
|
$ |
251,891 |
|
|
$ |
18,375 |
|
|
$ |
304,019 |
|
|
|
$ |
21,618 |
|
|
$ |
(157,677 |
) |
Subordinated Performance Fees(1) |
|
|
(699,174 |
) |
|
|
(395,863 |
) |
|
|
— |
|
|
|
(138,829 |
) |
|
|
(136,618 |
) |
|
|
(399,741 |
) |
|
|
|
— |
|
|
|
— |
|
Management fees – contra-revenue(2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,612 |
|
|
|
|
— |
|
|
|
3,660 |
|
Gain on lease modification |
|
|
— |
|
|
|
— |
|
|
|
(3,570 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Gain on unvested compensation |
|
|
— |
|
|
|
(897 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Unrealized (gain) loss allocated from Pershing Square, L.P.(3) |
|
|
(4,496 |
) |
|
|
(15,763 |
) |
|
|
4,737 |
|
|
|
(11,362 |
) |
|
|
(6,986 |
) |
|
|
(12,224 |
) |
|
|
|
(93 |
) |
|
|
10,944 |
|
Unrealized (gain) loss on HHH shares held at fair value |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(110,700 |
) |
|
|
|
— |
|
|
|
148,590 |
|
Performance fees from Pershing Square, L.P.(3) |
|
|
(70,585 |
) |
|
|
(35,935 |
) |
|
|
(13 |
) |
|
|
(19,408 |
) |
|
|
(14,543 |
) |
|
|
(29,742 |
) |
|
|
|
— |
|
|
|
— |
|
Non-recurring expenses - G&A(4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,890 |
|
|
|
14,652 |
|
|
|
|
3,715 |
|
|
|
7,860 |
|
Non-recurring expenses - compensation(5) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
4,114 |
|
Affiliates fee rebate(6) |
|
|
164,037 |
|
|
|
141,041 |
|
|
|
34,849 |
|
|
|
115,706 |
|
|
|
69,301 |
|
|
|
77,580 |
|
|
|
|
11,612 |
|
|
|
14,475 |
|
Profit-sharing partner compensation(7) |
|
|
210,584 |
|
|
|
183,936 |
|
|
|
35,418 |
|
|
|
115,830 |
|
|
|
339,133 |
|
|
|
459,077 |
|
|
|
|
15,448 |
|
|
|
11,768 |
|
Other (income) loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
4,052 |
|
Performance fee offset(8) |
|
|
(30,100 |
) |
|
|
(10,823 |
) |
|
|
— |
|
|
|
(5,959 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Distributable earnings |
|
$ |
129,518 |
|
|
$ |
207,954 |
|
|
$ |
123,324 |
|
|
$ |
307,869 |
|
|
$ |
294,552 |
|
|
$ |
312,533 |
|
|
|
$ |
52,300 |
|
|
$ |
47,786 |
|
% Growth |
|
|
|
|
|
61 |
% |
|
|
(41 |
%) |
|
|
150 |
% |
|
|
(4 |
%) |
|
|
6 |
% |
|
|
|
|
|
|
(9 |
)% |
||
Interest income (expense), net |
|
$ |
1,139 |
|
|
$ |
932 |
|
|
$ |
2,529 |
|
|
$ |
6,330 |
|
|
$ |
(25,413 |
) |
|
$ |
(14,608 |
) |
|
|
$ |
(9,873 |
) |
|
$ |
(114 |
) |
Fee-related earnings |
|
$ |
130,657 |
|
|
$ |
208,886 |
|
|
$ |
125,853 |
|
|
$ |
314,199 |
|
|
$ |
269,139 |
|
|
$ |
297,925 |
|
|
|
$ |
42,427 |
|
|
$ |
47,672 |
|
% Growth |
|
|
|
|
|
60 |
% |
|
|
(40 |
%) |
|
|
150 |
% |
|
|
(14 |
%) |
|
|
11 |
% |
|
|
|
|
|
|
12 |
% |
||
56
Table of Contents
Liquidity and Capital Resources
Overview
We have historically financed our operations and working capital through net cash provided by operating activities, primarily from management fees and performance fees, and borrowings under our 2014 line of credit (the “2014 Line of Credit”) and the 2021 Line of Credit. Going forward, we intend to finance our operations and working capital through net cash provided by operating activities and borrowings under our Revolving Facility (as defined below).
We expect that our cash flow from operations, current cash and cash equivalents, and the availability of borrowings under our Revolving Facility will be sufficient to fund our operations and planned capital expenditures and to service our debt obligations for the next twelve months and the foreseeable future.
2014 Line of Credit and 2021 Line of Credit
We entered into the 2014 Line of Credit and 2021 Line of Credit on October 3, 2014, and December 15, 2021, respectively. See Note 6, “Debt Obligations” to our Consolidated Financial Statements included in this Quarterly Report.
Each of the 2014 Line of Credit and the 2021 Line of Credit included provisions that restricted or limited, among other things, the ability of PSCM to incur additional indebtedness or to create additional liens or other encumbrances on PSCM or the guarantor, Mr. Ackman’s, assets, aside from additional financing from PSCM as defined in the agreement and certain other permitted indebtedness. Each of the 2014 Line of Credit and the 2021 Line of Credit required the guarantor to maintain a net worth of at least $1.0 billion, exclusive of any interest in Pershing Square. The guarantor was also required to maintain at least $250.0 million of aggregate liquidity that is free and clear of any and all encumbrances, consisting of liquid assets at the bank, and/or beneficial ownership in Pershing Square or equity in third-party hedge funds with quarterly liquidity or better.
In addition, the 2021 Line of Credit was secured by a pledge and security agreement whereby PSCM granted the lender a security interest in PSCM’s management fees.
PSCM and the guarantor have complied with the financial covenants imposed by the 2014 Line of Credit and the 2021 Line of Credit throughout the borrowing period. As of March 31, 2026, $34.8 million was outstanding under the 2014 Line of Credit, and we had no borrowings under the 2021 Line of Credit. We repaid all amounts outstanding under, and closed, the 2014 Line of Credit and 2021 Line of Credit upon the completion of the Combined Transaction.
Senior Secured Credit Facilities
On April 30, 2026, we and a syndicate of banks, led by Bank of America, N.A., as administrative agent, entered into a credit agreement (the “Credit Agreement”) in connection with our Combined Transaction. The Credit Agreement consists of (i) a senior secured revolving credit facility (the “Revolving Facility”) in an aggregate principal amount of $250 million, and (ii) a senior secured term loan facility in an aggregate principal amount of $100 million (the “Term Loan Facility,” and together with the Revolving Facility, the “Senior Credit Facilities”).
Borrowings under the Senior Credit Facilities bear interest at a rate equal to, at our option, either (i) Term SOFR, plus an applicable margin or (ii) a base rate equal to the highest of (a) the federal funds effective rate plus 0.50%, (b) the rate of interest in effect as publicly announced by Bank of America from time to time as its “prime rate,” (c) Term SOFR plus 1.00% and (d) 1.00%. The applicable margins will vary based on our consolidated leverage ratio.
57
Table of Contents
Loans under the Term Loan Facility are not subject to amortization prior to maturity, other than with respect to certain customary mandatory prepayment events. The Senior Credit Facilities will mature on April 30, 2029, at which time all outstanding loans and other obligations will be due and payable.
The obligations under the Credit Agreement are guaranteed by certain of our subsidiaries and secured by first-priority liens on substantially all of the assets of the loan parties, subject to customary exceptions and exclusions. The Credit Agreement includes certain financial covenants, which require the Company to (i) maintain a consolidated leverage ratio of no greater than 2.50 to 1.00, (ii) maintain minimum assets under management and (iii) limit declines in the net asset value of specified funds as set forth in the Credit Agreement. In addition, the Credit Agreement includes customary representations and warranties, affirmative and negative covenants and events of default for a credit facility of this type.
Cash Flows
The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:
|
|
|
|
|
|
|
|
|
||
(in thousands) |
|
For the Three Months Ended March 31, |
|
|||||||
|
|
2026 |
|
|
2025 |
|
||||
Net cash provided by (used in) operating activities |
|
$ |
|
87,896 |
|
|
$ |
|
65,070 |
|
Net cash provided by (used in) investing activities |
|
|
|
(14 |
) |
|
|
|
(46 |
) |
Net cash provided by (used in) financing activities |
|
|
|
(96,435 |
) |
|
|
|
(89,149 |
) |
Cash Flows from Operating Activities
For the three months ended March 31, 2026, net cash provided by operating activities was $87.9 million, resulting from a net loss of $158.5 million, adjusted for the unrealized loss on HHH shares held at fair value, the write-off of the deferred sublease incentive with NEOX, the amortization of deferred HHH services agreement premium, depreciation and amortization expense, non-cash lease expense and the amortization of LTIP grants in profit-sharing partner compensation. Cash flows used in operating activities were also impacted by changes in operating assets and liabilities of $89.0 million, primarily due to a $497.3 million decrease in performance fee receivables and a $24.6 million decrease in the investment in Pershing Square, L.P., partially offset by a $410.7 million decrease in accrued compensation and benefits and a $24.1 million decrease in the affiliates fee rebate payable.
For the three months ended March 31, 2025, net cash provided by operating activities was $65.1 million resulting from net income of $19.8 million adjusted for non-cash depreciation and amortization expense, non-cash lease expense and amortization of LTIP grants in profit-sharing partner compensation. Cash flows provided by operating activities were also impacted by changes in operating assets and liabilities of $43.8 million, primarily due to a $232.6 million decrease in performance fees receivable and a $10.0 million decrease in the investment in Pershing Square, L.P., partially offset by a $159.6 million decrease in accrued compensation and benefits and a $21.7 million decrease in the affiliates fee rebate payable.
Cash Flows from Investing Activities
For each of the three months ended March 31, 2026 and 2025, net cash used in investing activities was insignificant.
Cash Flows from Financing Activities
For the three months ended March 31, 2026, net cash used in financing activities of $96.4 million was related to $90.6 million of payments made for capital distributions and $5.9 million of offering costs for the PSUS IPO.
For the three months ended March 31, 2025, net cash used in financing activities of $89.1 million was primarily related to payments for capital distributions.
58
Table of Contents
Contractual Obligations and Commercial Commitments
As of March 31, 2026, there have been no significant changes to our contractual obligations and other commitments as disclosed in the IPO Prospectus, other than as described elsewhere in this Quarterly Report and other payments made in the ordinary course of business.
Dividend Policy
We intend to pay to holders of our common stock a quarterly cash dividend representing nearly all of our post-tax Distributable Earnings, subject to adjustment by amounts determined by our board of directors to be necessary or appropriate to provide for the conduct of our business, to make appropriate investments in our business and funds, to comply with applicable law and any contractual restrictions, or to provide for future dividends to stockholders for any ensuing quarter. For our definition of Distributable Earnings, see “—Non-GAAP Financial Measures - Distributable Earnings.” We expect to declare and pay dividends in the first month of the quarter in which they are earned for that quarter, beginning in the third quarter of 2026.
All of the foregoing is subject to the qualification that the declaration and payment of any dividends are at the sole discretion of our board of directors, and our board of directors may change our dividend policy at any time, including, without limitation, to reduce such quarterly dividends or even to eliminate such dividends entirely.
Dividends will be treated as qualified dividends to the extent the stockholder holds the shares of our common stock for the requisite holding period.
Because we are a holding company and have no direct operations, we will only be able to pay dividends or other distributions from funds we receive from our subsidiaries. In addition, our ability to pay dividends or other distributions may be limited by the agreements governing any indebtedness we or our subsidiaries may incur in the future.
Critical Accounting Policies and Estimates
The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the amounts of income and expenses during the reported period. While management believes that the estimates utilized in preparing the Consolidated Financial Statements are reasonable and prudent, actual results could differ from those estimates.
An accounting policy is considered to be critical if the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the effect of the estimates and assumptions on financial condition or operating performance.
For a description of our accounting policies, see Note 2, "Significant Accounting Policies," to the Consolidated Financial Statements included elsewhere in this Quarterly Report and for a discussion of our policies and estimates, see the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our IPO Prospectus. There have been no material changes to our critical accounting policies and estimates since December 31, 2025.
Recent Accounting Developments
Information regarding recent accounting developments and their impact on Pershing Square, if any, can be found in Note 2, “Significant Accounting Policies” of the Consolidated Financial Statements included elsewhere in this Quarterly Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our exposure to market risks primarily relates to PSCM’s role as investment advisor to our funds and the impact of movements in the underlying value of their investments. Our management fees and performance fees are the primary sources of revenue that could be impacted. The underlying value of our funds’ investments may fluctuate in response to general equity and other market conditions.
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We also have exposure to market risks from PSCM’s provision of investment advisory and other services to HHH pursuant to the HHH Services Agreement and the impact of changes in the market capitalization of HHH. The HHH Variable Management Fee is the source of revenue that could be impacted. The market capitalization of HHH may fluctuate in response to general equity and other market conditions.
Additionally, interest rate movements can adversely impact the amount of interest that we pay on debt obligations bearing variable rates.
There have been no material changes to the quantitative and qualitative disclosures about market risk disclosed in our IPO Prospectus.
Item 4. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
Management has not identified any changes in the Company’s internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Part II - OTHER INFORMATION
Item 1. Legal Proceedings
The information required with respect to this Part II, Item 1 can be found under Note 7, “Commitments and Contingencies” to the Consolidated Financial Statements included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed in the IPO Prospectus.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Initial Public Offering
On April 30, 2026, we and PSUS completed our Combined IPO, in which we issued 8,103,392 shares of our common stock. The PSUS Shares were offered at a public offering price of $50.00 per share, and we delivered to each initial investor in the PSUS IPO, for no additional consideration, 1 share of our common stock for every 5 PSUS Shares purchased in the PSUS IPO. The Combined IPO did not result in any proceeds to us. Citigroup Global Markets Inc., UBS Securities LLC, BofA Securities, Inc., Jefferies LLC, and Wells Fargo Securities, LLC acted as representatives of the underwriters for the Combined IPO.
All shares of our common stock issued in our Combined IPO were registered pursuant to the Registration Statement on Form S-1, which was declared effective by the SEC on April 28, 2026 (File No. 333-294165). The offering commenced on April 28, 2026 and was terminated after the sale of all securities registered pursuant to the Registration Statement. Because the shares of our common stock were offered for no consideration as a component part of a single offering, there is no aggregate price of the offering amount registered by us. We bore all costs associated with the offering of shares of our common stock, except that any underwriting fees in connection with the Combined IPO were paid by PSUS. The total expenses of the offering of our common stock, including registration, filing and listing fees, printing and legal and accounting expenses, but excluding the underwriting discounts and commissions to the underwriters of the PSUS IPO, was $32,000,000. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities, or (iii) any of our affiliates. PSUS intends to invest the net proceeds of the PSUS IPO in accordance with its investment objective and policies.
As previously disclosed in our Current Report on Form 8-K, filed with the SEC on May 1, 2026, we also issued 16,643,862 shares of our common stock in the Combined Private Placement exempt from registration under the Securities Act of 1933, as amended, concurrently with the closing of the Combined IPO. Because the shares of our common stock were delivered for no consideration as a component of the Combined Private Placement, there is no aggregate offering price for the shares of our common stock delivered in the Combined Private Placement.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Trading Plans
During the quarter ended March 31, 2026, no directors or officers, as defined in Rule 16a-1(f),
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Item 6. Exhibits
Exhibit No. |
Description of Exhibits |
3.1* |
Articles of Incorporation of the Registrant |
3.2* |
Bylaws of the Registrant |
10.1†
|
Amended and Restated Variable Compensation Agreement, dated as of March 3, 2026, by and among Pershing Square Holdco, L.P., Pershing Square Capital Management, L.P. and PS CompCo, LLC (incorporated by reference to Exhibit 10.15 to the Registrant’s Registration Statement on Form S-1 filed on March 10, 2026) |
31.1* |
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1** |
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2** |
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS* |
XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104* |
Cover page formatted as Inline XBRL and contained in Exhibit 101 |
* Filed herewith.
** Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 to this Quarterly Report are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Registrant under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.
† Management contract or compensatory plan or arrangement.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by the Company in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
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SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: June 4, |
Pershing Square Inc. |
|
2026 |
|
|
|
/s/ William A. Ackman |
|
|
Name: |
William A. Ackman |
|
Title: |
Chief Executive Officer and Chairman (Authorized Officer) |
|
|
|
Date: June 4, |
/s/ Michael Gonnella |
|
2026 |
Name: |
Michael Gonnella |
|
Title: |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
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