Bill Ackman’s H1 letter is out – see excerpts below and stay tuned for analysis.

Also see his recent call with investors

Investment Manager’s Report Dear Pershing Square Holdings, Ltd. Shareholder: Pershing Square Holdings, Ltd. (“PSH”) outperformed the S&P 500 for the first half of 2015, and continues to outperform the market year-to-date and since inception as set forth below5. PerAckmanshing Square Holdings, Ltd. Performance vs. the S&P 500

PSH Gross Return (3,5) [drizzle]PSH Net Return (3,5) S&P 500(6)


2013 13.0% 9.6% 32.4%
2014 50.6% 40.4% 13.7%
YTD through June 2015 4.6% 3.2% 1.2%
July 2015 8.0% 6.6% 2.1%
YTD through July 2015 13.0% 10.1% 3.4%
January 2013 – July 2015
Cumulative (Since Inception) 92.2% 69.3% 55.5%
Compound Annual Return 28.8% 22.6% 18.6%
While the data above reflect the state of play of only a few weeks ago, dramatic downward market volatility has caused all of the Pershing Square funds including Pershing Square Holdings as of today’s close to be in a loss position for the year to date while still outperforming the market indexes over the same period. In light of recent market volatility, we thought it would be useful to summarize key Pershing Square investment principles and how we expect the portfolio to be affected by current market conditions. PERSHING SQUARE INVESTMENT PRINCIPLES We select investments in companies that meet our extremely high standards for business quality. We primarily invest in businesses that are simple, predictable, and free-cash-flow-generative with substantial barriers to competition and strong pricing power due to brands, unique assets, long-term contracts, and/or dominant market position. We vastly prefer businesses that have limited exposure to macroeconomic factors by generally avoiding companies that are highly exposed to commodity prices, material changes in interest rates, and other extrinsic factors we cannot control. We focus on large capitalization, North-American-domiciled businesses that earn the substantial majority of their profits in North America. We often hedge large non-U.S. currency exposures in the portfolio. We seek investments that trade at a discount to intrinsic value as is, and an even wider spread as optimized. The result of this approach is a portfolio comprised of the highest quality collection of businesses that we have ever owned, managed by the strongest management teams that we have worked with, all trading at substantial discounts to intrinsic values. These businesses are generally conservatively financed, often investment grade or soon to be, generate substantial amounts of recurring free cash flow, typically don’t need access to equity capital to survive or thrive, and often return capital to shareholders through buybacks or dividends. As a result of these characteristics, the intrinsic value of the businesses we own is not particularly correlated with equity or credit market volatility. We may make occasional exceptions to the above principles if we believe the additional risks are compensated for by greater potential profitability. For example, we own a number of highly acquisitive businesses, namely – Valeant, Platform Specialty Products and Nomad – for whom access to capital is necessary to achieve accelerated growth. Even in these cases, however, if the capital markets were to shut, their growth would slow from their current extremely high levels, but their businesses would remain profitable and cash generative. In each case, the current valuations reflect no value

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