(1) Performance results are presented on a gross and net of fees basis. Net returns reflect the deduction of, among other expenses, management fees, brokerage commissions, administrative fees and accrued and/or crystallized performance fees, if any, and include the reinvestment of all dividends, interest and capital gains of our underlying holding companies . Net returns reflect the performance of the public shares of Pershing Square Holdings, Ltd. (the society “). Depending on the timing of an individual investor’s specific investment, an individual investor’s net performance may differ from the net performance shown herein. Gross returns reflect the performance of the Company’s shares as a whole and are presented gross of management fees and performance fees, if any. Since May 10, 2022, the Company has engaged in share buybacks whereby its buyback agent has repurchased public shares subject to certain limitations. Any positive impact on performance due to these share buybacks is reflected here. Performance data and other information contained herein are estimated and unaudited. Performance is based on the return in dollars for the specific period, including all dividends paid by the Company, calculated from the beginning of that period to the end of that period.
(2) Reflects the number of positions in issuers in which the Company has previously publicly disclosed an investment, which occurs after the Company has completed its accumulation. Cash, cash equivalents, direct or indirect foreign exchange hedges or other hedges and income/expense items are excluded. Multiple financial instruments (eg common stock and common stock derivatives) associated with one (1) issuer count as one (1) position. A position included in the number of positions will be removed from the table only if the investment becomes 0.0% of the portfolio.
(3) For the purposes of determining equity and debt exposures, investments are valued as follows: (a) equity or debt is marked to market, (b) options referencing equity or liabilities are marked-to-market, (c) call options and short put options (or conversely, short call options and long put options) held on the same underlying issuer and with the same strike price and same maturity are grouped together and treated as synthetic equity positions and are marked to market value of the equivalent long equity position (or conversely, the equivalent short equity position), and (d ) swaps or futures contracts referencing shares or debt are valued at the market value of the notional shares or debt underlying the swaps or futures. Whether a position is considered long or short is determined by an investment’s positive or negative exposure to price increases or decreases. For example, long puts are considered short exposure.
(4) Includes all issuer equity, debt and derivatives related to issuer equity and debt, and related currency hedges. Cash, cash equivalents, direct or indirect foreign exchange hedges or other hedges and income/expense items are excluded. The market values of the associated currency hedges are included in the associated investment. In the event of a change in market capitalization category with respect to a position not publicly disclosed, this information is not updated until that position is publicly disclosed.
(5) Portfolio composition reflects publicly disclosed portfolio positions as of the date of this report. A position in an issuer is not assigned to a sector until it has been made public.
(6) “Pershing Square Holdings, Ltd. AUM” equals the net assets of Pershing Square Holdings, Ltd. calculated in accordance with GAAP without deducting amounts attributable to accrued performance fees, while adding back the principal value of the Company’s outstanding debt ($1.8 billion euros and 500 million euros converted into USD at exchange rate in effect on the closing date, 1.02). Any performance fees crystallized at the end of the year will be reflected in the assets under management for the following period.
(7) “Total Core Strategy AUM” corresponds to the net assets of Pershing Square, LP, Pershing Square International, Ltd. and Pershing Square Holdings, Ltd. (collectively, the “Base Funds”) calculated in accordance with GAAP without deducting amounts attributable to accrued performance fees, while adding back the principal value of the Company’s outstanding debt ($1.8 billion and $500 million euros converted into USD at the exchange rate prevailing on the closing date, 1.02). Actual redemptions at the end of any period (including redemptions attributable to crystallized performance fees, if any) will be reflected in the next period’s assets under management.
(8) “Total Firm AUM” equals “Total Core Strategy AUM” as defined in footnote 7, plus the net assets of PS VII Master, LP and PS VII A International, LP (together, “PSVII Funds”) calculated in accordance with GAAP, not including twice the investments made by a Main Fund in the PSVII Funds. PSVII Funds operate as co-investment vehicles investing primarily in securities of (or otherwise seeking exposure to the value of securities issued by) Universal Music Group NV
Note: Each public share of the Company carries at all times one vote per share. The total voting rights in the Company (“Total Voting Rights”) may vary over time given the capital structure and voting rights of the Company. As of July 31, 2022, the total voting rights were 393,165,567. There are 196,189,618 public shares and 1 special voting share (held by VoteCo) outstanding (share classes have 1 vote and 196,975,949 votes per share, respectively). In addition, the Company currently holds 14,767,132 public shares in treasury; these public shares do not give the right to vote. As part of the June 17, 2022 dividend payment, the high water mark per share was adjusted to $57.02.
In addition, under the Company’s Articles, a person is required to inform the Company of the number of Public Shares he holds or is deemed to hold (as a result of the direct or indirect holding of financial instruments by such person ) if such number reaches, exceeds or falls below 3%, 4%, 4.25%, 4.50%, 4.75% or 5% of the total number of public shares outstanding.
As of the date of the placement of the public shares, the total amount of compensation, which forms part of the performance fee calculation, was $120 million. As of June 30, 2022, the compensation amount has been reduced overall from approximately $78.4 million to $41.6 million. The performance fee which may be charged from time to time on paying shares is equal to 16% of the appreciation in net asset value less the “additional reduction”. The additional reduction is equal to 20% of the cumulative allocations/performance fees earned by the investment manager on the earnings of certain other funds managed by the investment manager, plus any additional reduction amount carried over from the previous period (0.0 million as of June 30, 2022), and is calculated after taking into account the compensation amount. The compensation amount offsets the additional reduction until it is reduced entirely to zero. On the date of the placement, the total amount of the compensation was fixed by reference to the sum of the commissions and other placement and admission costs of the Public Shares, as well as the commissions paid to the placement agents and other training and offer prior to admission which had been borne by the investment manager.