Pershing Square's Buyback Signals Deep Value Bet on Itself

LONDON, UK – December 05, 2025

Pershing Square Holdings, Ltd. (LN:PSH), the investment vehicle managed by Bill Ackman’s Pershing Square Capital Management, continued its steady drumbeat of share repurchases this week. The firm announced on December 4th that it had bought back another 29,193 of its own public shares for approximately $1.95 million. While these daily transaction announcements have become routine for market watchers, they represent more than just corporate housekeeping. Each purchase is a calculated step in a larger, aggressive capital allocation strategy designed to tackle one of the fund's most persistent challenges: the significant discount between its share price and its Net Asset Value (NAV).

This latest transaction, executed at an average price of $66.71 per share, underscores management's conviction. With a stated NAV per share of $87.20 as of November 30, 2025, the fund is effectively repurchasing its own assets at a discount of nearly 24%. For institutional investors and market analysts, this is a powerful signal that management believes the most compelling investment available is the fund itself.

A Disciplined Strategy to Close the Value Gap

For closed-ended funds like Pershing Square Holdings, a persistent gap between the market price of their shares and the intrinsic value of their underlying assets is a common but frustrating phenomenon. Unlike open-ended funds, which issue and redeem shares at NAV, closed-ended funds trade a fixed number of shares on an exchange, allowing market sentiment to create significant premiums or, more commonly, discounts. PSH has made closing this discount a central pillar of its corporate strategy.

The recent buyback is not an isolated event but part of a long-term, systematic campaign. The company initiated its first share repurchase program in May 2017 and has since deployed approximately $1.7 billion to buy back over 72 million shares. This commitment has only intensified. On November 17, 2025, PSH announced a new $100 million buyback program, which itself followed an upsized $200 million authorization from late 2024. This continuous and escalating effort demonstrates a disciplined approach to capital management.

The mechanics are straightforward and strategically potent. By purchasing shares on the open market and holding them in treasury—which now total over 34.2 million shares—PSH reduces the number of public shares outstanding. This action is immediately accretive to the NAV per share for the remaining shareholders. In essence, every share bought back below NAV mathematically increases the value of every share that remains, concentrating ownership of the underlying portfolio for long-term investors.

Reading the Signals: Valuation and Management Confidence

While the NAV accretion is a guaranteed outcome of the buyback mechanics, the program's second purpose is to send an unmistakable message to the market. When a fund's manager, known for deep-value analysis of other companies, consistently buys their own stock at a steep discount, it is the ultimate expression of confidence. This act suggests that Ackman and his team believe the market is fundamentally mispricing PSH's high-quality, concentrated portfolio of North American companies.

This confidence is particularly notable given PSH's strong performance in 2025. The fund’s London-listed shares posted impressive gains of over 25% through the third quarter, handily outpacing the S&P 500. Despite this rally, the discount to NAV has remained stubbornly wide. It had narrowed to around 20% in mid-2024 before expanding again to the low-30% range after the firm postponed plans for a new US-listed vehicle. The relentless buyback activity serves as a direct counter-pressure to this market sentiment, providing a consistent source of demand for the stock and signaling management’s belief that the current price does not reflect its intrinsic worth.

This alignment of interests is a cornerstone of the Pershing Square philosophy. Bill Ackman and his affiliates have significantly increased their own beneficial ownership in the fund, ensuring that their financial outcomes are directly tied to those of public shareholders. The repurchase program acts as a tangible extension of this principle, using company capital to exploit the same undervaluation that management is investing in personally.

Capital Allocation Beyond Repurchases

While the share buyback program is a major focus, it is just one component of PSH's broader capital allocation and value creation strategy. The fund is not simply shrinking its share count in a vacuum; it is also actively managing its portfolio to drive NAV growth. Recent portfolio adjustments in 2025 demonstrate this dynamic approach. The firm exited positions in Chipotle and Nike, citing underperforming fundamentals and increased uncertainty, while simultaneously increasing its stakes in high-conviction holdings like Amazon, Brookfield, Alphabet, Hilton, and Hertz.

Furthermore, Pershing Square has embarked on new strategic initiatives. In May 2025, it announced a significant $900 million investment in Howard Hughes Holdings (HHH), aiming to help guide its transformation into a diversified holding company. These moves highlight an active management style focused on a concentrated portfolio of 8 to 12 high-quality businesses with predictable cash flows and what Ackman terms “limited downside.”

Beyond portfolio management and buybacks, PSH also returns capital through a quarterly dividend, which it initiated in 2019. This multi-faceted approach—combining active portfolio management to grow the underlying asset base, dividends for direct cash returns, and an aggressive buyback program to enhance per-share value—forms a comprehensive strategy aimed at generating superior long-term returns.

The Broader Landscape for Investment Funds

Pershing Square's strategy operates within a larger industry context where capital management has become paramount. For the closed-ended fund sector, share repurchases are a standard tool for addressing NAV discounts, but PSH’s scale and consistency set it apart. In a 2025 market characterized by economic volatility, institutional investors have shown renewed interest in hedge funds and alternative investment vehicles, viewing them as tools for portfolio diversification and stability. Global assets under management in the hedge fund industry have climbed, reaching an estimated $4.5 trillion at the end of 2024.

In this environment, funds that demonstrate clear, shareholder-friendly capital allocation policies are increasingly favored. PSH's transparent and aggressive buyback strategy serves as a key differentiator, providing a clear mechanism for value creation that is independent of the daily fluctuations of its underlying holdings. As institutional allocators scrutinize fund structures and manager alignment, PSH’s unwavering commitment to repurchasing its shares at a discount provides a compelling case study in active capital management. The daily announcements, far from being mundane regulatory filings, are consistent proof points of a strategy in motion, challenging the market to re-evaluate the fund’s true worth.