Pershing Square (PS) Status update summary

Fannie Mae and Freddie Mac outlook

• Remain highly optimistic about Fannie and Freddie leaving conservatorship, viewing them as perpetual options on a likely outcome with significant value to be unlocked for shareholders and the American public.

• Multiple meetings with the administration reinforce confidence that resolution is a high priority, with the president publicly supporting taking the companies public again.

• Resolution can be executed by the president without congressional approval, and is seen as a strategic move regardless of midterm outcomes.

• The process should be gradual to minimize risk to mortgage markets, starting with accounting for payments, exercising warrants, and listing on the exchange, followed by ensuring adequate capitalization.

• Assigns a very low probability to no action being taken by the end of the Trump administration, emphasizing the importance of resolving before potential political shifts.

Investment strategy and portfolio updates

• Exited Hertz position after a surprising and poorly executed equity offering, citing loss of confidence in management and appropriate risk sizing.

• Howard Hughes capital allocation focuses on acquiring full ownership of Vantage and deploying capital to insurance operations for higher ROE, with future flexibility for other investments.

• PS Ventures will focus on private, high-growth, tech-forward companies, with a long-term ownership approach even after IPOs.

• Long-term orientation is maintained in Howard Hughes and related funds, leveraging significant ownership and a strong management team to withstand short-term market distractions.

Key holdings and sector perspectives

• Amazon, Microsoft, and Meta are viewed as high-growth, well-managed businesses with strong future earnings potential, benefiting from discounted valuations due to market concerns over capital spending.

• Meta is highlighted for its rapid growth and undervalued core business, with additional upside from investments in compute capacity.

• Uber is expected to benefit from the rise of autonomous vehicles, with its platform model and global reach providing resilience and growth opportunities in both rideshare and delivery.

• Netflix is considered a passive investment behind a strong management team, with its scale and IP advantages reinforcing its leadership in streaming.

• S&P Global's franchise benchmarks and network effects are seen as highly defensible against AI disruption, with only a small portion of the business exposed to potential risk.

• Intercontinental Exchange is praised for its durable business model, consistent earnings growth, and strong management, particularly in energy and exchange operations.