Pershing Square's Buyback Strategy: A Bold Play for Shareholder Value

LONDON, UK – December 03, 2025

Pershing Square Holdings, Ltd. (PSH), the investment vehicle managed by activist investor Bill Ackman, executed another share buyback on Tuesday, a move that, while seemingly routine, represents a critical salvo in its ongoing strategic battle to enhance shareholder value. The firm announced the purchase of 28,870 of its own Public Shares for approximately $1.88 million.

While the daily transaction size is modest for a fund with a market capitalization north of $11 billion, the financial mechanics behind it are telling. The shares were repurchased at an average price of $65.08, a figure that stands in stark contrast to the fund's last reported Net Asset Value (NAV) per share of $87.20 as of November 30, 2025. This significant gap underscores the core rationale behind PSH's capital allocation policy: management is deploying cash to buy its own portfolio of high-quality businesses at a steep discount, signaling profound confidence in its intrinsic worth.

A Strategy of Accretion and Confidence

The decision to repurchase shares价格 significantly below NAV is a deliberately accretive action. Each share bought and retired or held in treasury at a discount mathematically increases the NAV per share for all remaining shareholders. It is one of the most direct ways a closed-ended fund can generate value when its market price becomes detached from the underlying value of its assets. For institutional investors and analysts, such buybacks are a powerful signal from the board and the investment manager that they believe the market is mispricing the company.

This strategy is particularly crucial for PSH, which has long grappled with a persistent discount to its NAV. Despite strong performance in its underlying portfolio, the discount has proven stubborn, even widening to 31.2% in 2024. The continuous execution of buybacks serves as a consistent, tangible effort to counteract this market sentiment and reward long-term shareholders by increasing their proportional ownership of the fund’s assets at a bargain price. By systematically reducing the number of outstanding shares—now at 176,797,958—the fund aims to improve key per-share metrics, including earnings per share (EPS), and apply upward pressure on the stock price to narrow the valuation gap.

The Billion-Dollar Buyback Campaign

Yesterday's purchase is not an isolated event but a single data point in a massive, multi-year capital return program. Since initiating its first buyback program on May 2, 2017, Pershing Square Holdings has spent approximately $1.7 billion to repurchase over 72 million of its Public Shares. This long-term commitment highlights that share repurchases are a central pillar of its corporate finance strategy, not a temporary tactic.

The pace has been notable. The current buybacks are part of a $100 million program authorized on November 17, 2025. This followed the near-completion of a larger $200 million program announced just weeks earlier, which itself succeeded another $100 million authorization from late 2024. This consistent refreshing of the buyback mandate, managed through its agent Jefferies International Limited, demonstrates an aggressive and disciplined approach to deploying capital whenever the discount to NAV presents a compelling investment opportunity in its own right.

By holding the repurchased shares in treasury—now totaling over 34 million—PSH retains flexibility, but the primary impact is the reduction of the public float. This sustained campaign is a clear message that management views a buyback as one of the best available investments, rivaling or even exceeding the attractiveness of deploying new capital into external opportunities.

Beyond Buybacks: A Multi-Pronged Approach to Value

While the buyback program commands attention, it is just one component of a broader capital allocation framework designed to maximize long-term compound growth. Pershing Square’s primary function is to invest in a concentrated portfolio of 8 to 12 large-cap, high-quality North American companies. Recent additions like Nike, Brookfield, and Uber exemplify this focus on businesses with strong fundamentals and predictable cash flows.

Complementing the buybacks is a robust dividend policy. In January 2025, PSH announced a 13% increase in its quarterly dividend, the third such raise since it adopted a NAV-linked dividend policy in 2022. This provides a direct cash return to shareholders and, through an available Dividend Reinvestment Programme (DRIP), allows them to compound their investment. This dual approach of buybacks and dividends offers a powerful combination of capital return mechanisms.

Furthermore, the interests of the investment manager, Pershing Square Capital Management, are closely aligned with those of public shareholders. The manager and its affiliates have been active in the open market, increasing their beneficial ownership in the fund. This alignment reinforces the conviction behind the fund's strategy, as the managers are investing their own capital alongside shareholders, betting on the same outcome: the eventual recognition of the fund's intrinsic value by the broader market.

For institutional investors, this multi-faceted strategy provides several levers for potential returns: the performance of the underlying concentrated portfolio, the accretive effect of share buybacks, and a growing stream of dividends. The challenge, and the focus of keen market observation, is whether these combined forces will be enough to finally and permanently close the valuation gap. The board's unwavering commitment to its buyback campaign suggests a firm belief that, over the long term, value will prevail.