Good afternoon, everybody, and welcome to the annual PSH Investor Meeting. It's a pleasure to see so many familiar faces out in the audience and also some new ones. It's a very exciting event for all of us. We have some really exciting updates to share with you today across the portfolio, as well as across our broader business. I'm Ryan Israel. I'm the Chief Investment Officer of Pershing Square. What we'll do in the next couple of hours is really provide you with a detailed update across the business and a lot of things that we think are exciting, both in the current market backdrop as well as across our specific portfolio. Before I go further, I want to acknowledge that, as you may see, we're missing one very important person at the firm, Pershing Square, which is Bill. Bill, unfortunately, had a family medical emergency, and that really required him to stay in New York in order to help navigate that situation. So while he won't be here physically with us today, he will be joining virtually in the Q&A, and we'll be able to take any questions that you have on any topics. So we've got some big shoes to fill today, both literally and figuratively. But we'll do our best in order to give you a really fulsome update across the portfolio and the business. I'll give you a quick run of show. First, we'll start by having our Chairman of PSH, Rupert Morley, come and give an introduction and some remarks. And then I'll come back. I'll provide a strategic update. We'll review the performance for 2025, talk about a couple of business organizational updates, or actually give you a pretty in-depth view of our perspective on the stock markets because we think it's such an interesting and fascinating time to be a public markets investor these days. Then we'll go through in detail and talk about the equity portfolio and provide some Q&A. With that, I'll let Rupert come up and give you some remarks. Thank you very much, Ryan. So yes, I'd like to add my welcome to this, our investor presentation. It's great to see so many people here. One of my colleagues just told me the last time he came here it was a CIA safe room, and he did not have a good experience. So hopefully, this will be a bit better for all of you. Here's your board. They're very experienced. They've been working tirelessly to make sure that we promote the success of the business for the benefit of all shareholders. It's a tradition they don't much like, but I do. So I'm going to get them to stand up so you can see who they are. The idea here is that we do encourage engagement with shareholders. So as soon as this is over, I'd like to go and talk to them. And if you want to meet with any of us after the meeting, that's absolutely fine. So Charlotte Denton is our Senior Independent Director. She's also chair of Achilles. Andrew Henton is on the board of Butterfield Bank. Bilge Ogut is a partner with Groupe Bruxelles Lambert. Jean-Baptiste Wautier, sorry, has a family office. And Halit Coussin, who is PSCM's Chief Legal Officer and Chief Compliance Officer. So as you can see, we have five strong independent directors and one representative of the manager. The managers' interests are highly aligned. They are largest shareholder with 28% of the business. In terms of board meetings, we had seven meetings last year in 2025. We carefully review the performance of the portfolio, the strategy. And we also stay close to the operations of the manager. So we visit their offices. We talk to the teams. We discuss with the manager and their people issues such as succession, culture. We talk about process. We talk about ESG. We talk about systems and risk. I think this is very important. One thing in particular that we are focusing on at the moment is the growth of the manager as their business expands and to make quite sure that they're growing and scaling the capacity that they've got internally so that we can expect the same level of excellent support for shareholders at PSH. In terms of investor relations and global marketing, we're supported both internally by a very strong team and by some excellent people who externally advise us. The same for compliance and regulation. We talk to the manager regularly about expenses, particularly fees. This is something we return to every year to assist them with ways in which they can reduce the fees that are charged to PSH through the growth of their business. Share price performance is on our mind all the time, particularly the discount. That's something I'll return to later in this presentation. We have five committees. Four of them are entirely independent. Halit sits on the risk committee, where she provides us with some excellent input. Of course, anytime on the board or any of the committees, if we want to be there and talk without Halit, we can ask her to recuse herself, which she does. In 2025, we worked with the manager on a number of initiatives to create value specifically for PSH. In May, the manager acquired $900 million worth of new shares in Howard Hughes Holdings. That brings the share of that company that PSH and the affiliates, including the manager, own to 46.9%. As a result of that, we reviewed the investment management agreement and somewhat reduced PSH's fees. Then towards the end of the year in December, PSH committed that it would purchase up to $1 billion worth of preferred securities in Howard Hughes, which would enable that business to acquire Vantage, an insurance company, which is an important part of the strategy going forward for that business. That's something that Ryan will address later in the presentation. The board's very happy with performance in 2025. NAV grew by 20.9%. With a contraction of the discount, the total shareholder return was 33.9%. A lot of numbers on that slide. 8 years, the compound growth in both NAV and in the share price has been 23%. I think that's worth letting that sink in. Any of us who understand the miracle of compound interest, if you compare that to the return of the S&P of 14% or FTSE of 7%, you can imagine quite what a difference that makes. It's an incredible long-term performance. The portfolio lends itself to long-term debt. And this means that we've been able to create a structure of laddered securities going out to 2039, which match our long-term investment horizon. The fact that we've got such liquid, easy-to-value portfolio means that we have low borrowing rates. And we have currently a weighted average maturity of 6 years and a weighted average cost of capital of 3.6%. With that, we have a conservative strategy. We keep the debt-to-total-capital ratio to between 15%-25%. This year, 2025, we had two bond issuances, one of EUR 650 million, trying to read that and just make sure I get it right, five years at 4.25% and then $500 million, which was at 7 years and 5.5%. At the same time, we saw our credit ratings improve. So Fitch went to BBB+ and S&P to A-. So this is an excellent, excellent asset and an excellent way for PSH to make the best of our portfolio. Finally, the discount. The board focuses on this a lot. And we discuss it with the manager. And wherever we can, we put in place strategies to address it. In 2019, we initiated a dividend policy. And in 2022, we amended that so that the dividend automatically increases with NAV. So since that time, it's increased by 86%. And the company has now paid out $666 million in dividends. When the manager thinks it's the best use of capital, which given the returns it makes on the portfolio, it's a very high bar, they propose to the board that we buy back shares. In 2025, we bought back 6.6 million shares for about $370 million. And that brings the total amount on share buybacks to $1.8 billion, which has been used to buy back just under 30% of the shares originally under issue. In terms of distribution, we've engaged Cadarn and LodeRock to improve our marketing outside of the US. That's been very successful and continues to bear fruit. And in terms of our listing in London, from just over 9 years ago, when we were the 139th largest company by market capitalization, we are now the 58th. So I'd say that all of these things are helpful. They're all accretive. They all assist in reducing the discount. And in 2025, we were happy to see that drop by seven points from 31%-24%. But—and it's in yellow at the bottom of the slide—the board continues to believe the most powerful driver of long-term shareholder returns will be continued strong absolute and relative NAV performance. And that's very much what we focus on. And I think that's a good point for me to hand over to the team that ensure that we deliver that. And here you are. Ryan is back. So I'll start by giving you an important strategic update on a couple of items we've been working on over the last year. First, we'll start with PSUS. As you may recall, in the summer of 2024, we took a 2-month process marketing phase where we reached out and received significant interest from both retail and institutional investors investing in PSUS. While there was a lot of excitement, at the same time, there were some questions and considerations about how the aftermarket trading of that entity would ultimately work. So we decided to take some investor feedback and rework that structure. We've spent some time in 2025 to do that. Now, my lawyers tell me I'm not allowed to say anything more than that. We're also not able to take any questions on that. But quickly, to remind you why one of the reasons it's important for Pershing Square Holdings is that the launch of PSUS will materially reduce the performance fees that we charge on PSH. As a reminder, when we created and amended the offset fee arrangement, we agreed to give a reduction of 20% of the management fees from PSUS in all future management fee-oriented vehicles in order to reduce the performance fees that are paid by Pershing Square Holdings. So that will result both in a fee reduction. But interestingly, it provides this countercyclical benefit. Because we're reducing by sort of a more stable management fee, your percentage returns you pay in terms of performance fees will actually be lower in years in which the performance is less, which we think is also a nice positive benefit of the structure. Onto a topic in which I'm able to talk much more freely and at length is the strategic transformation of Howard Hughes. Howard Hughes is a business that we've owned for nearly 15 years in our portfolio. To be candid, it has underperformed our expectations of a stock and has not been achieving the levels of share price return that we would have expected for an investment in Pershing Square Holdings. That's despite a lot of positive progress in the underlying real estate assets. Ultimately, we've come to the conclusion that the best way for that business to be a long-term core holding of Pershing Square Holdings was for us to transform this business into a diversified holding company in which we would have even more involvement in the spirit of Berkshire Hathaway. In May of last year, we agreed, from the management company of Pershing Square, to put in $900 million into the company in order to begin that strategic transformation. The Pershing Square Management Company bought nine million shares at $100 as part of that, which was a significant increase to the $66 at which HHH was trading at the time, but in our view, as a discount to its underlying real estate net asset value and an even larger discount to what we thought we could ultimately do with the business over time through this transformation. That capital investment into the company allowed us to begin the transformation of Howard Hughes. It will ultimately be looking to acquire controlling interests in high-quality, durable growth companies, the first of which we announced in December was Vantage, the insurance company. Importantly, the real estate assets, principally the Master Planned Communities, will continue their core strategy. But what will be different going forward is we'll be looking to invest that excess cash flow that the real estate assets give us into different business lines that we think meet the principles of the high-quality, durable growth companies we're looking for. As part of the transformation, Bill rejoined Howard Hughes's board and became Executive Chairman. I joined the board and became the company's CIO. And we've made available to Howard Hughes the entire resources of the Pershing Square IV team in exchange for management fees. So we think that this strategic transformation of Howard Hughes is very beneficial for PSH shareholders for two reasons. One is we're reducing the PSH management fees. The way that works is the management fees will be reduced in PSH dollar for dollar by the proportionate amount of fees that Pershing Square Capital Management receives from Howard Hughes related to the stock in Howard Hughes that PSH owns. But I think the second reason will likely be even more beneficial over time for PSH shareholders, which is the increase in value that we plan to deliver to Howard Hughes by transforming it into a diversified holding company that's really in the spirit of a Berkshire Hathaway. We think we can bring our experience of leadership and our investment expertise to the company. For example, our asymmetric hedging strategy is very valuable to the inherent real estate exposures to macroeconomic risks and interest rate risk, which we can help them with. Vantage serves as a very good example of our ability to help source and execute private transactions. We also think we'll help the company increase its access to the equity, the debt markets, and really broaden the investor following of the company, both due to our reputation and our following as a firm, but also by transforming it into a much larger and more diversified business that a lot of investors can own. I'd say, importantly, PSH and Howard Hughes will pursue distinct, yet we think synergistic, investment strategies. PSH will continue the core function of selecting minority investments and publicly traded companies. Howard Hughes will be looking to buy control transactions, meaning 51%-100% ownership of both private and public businesses over time. So our first asset that we're acquiring, we announced in December, will be Vantage, which is a leading specialty insurer and reinsurer. We paid about $2.1 billion or we will pay at close $2.1 billion for the insurance company. We paid about 1.5 times the year-end book value of 2025. However, we have an agreement where we get to keep the increase in the book value between the end of the year and when we close, which we think will be at the end of the second quarter, and the net income that's generated. We think that will effectively lower the purchase multiple that we've paid to something perhaps a little less than 1.4 times when this closes in June. Of the $2.1 billion, $1.2 billion of that came from Howard Hughes' company, of which the majority of that came from the cash when we bought the incremental $900 million worth of shares in May. We also have made up to $1 billion as a backstop minority investment from PSH into newly issued Howard Hughes preferred stock. I'll discuss this in a little bit more detail. But at a high level, the preferred stock will ultimately convert into Vantage common stock if it is not repaid or redeemed by the end of 7 years. We think that that's an unlikely scenario. Our view is it's very likely that within the first 3 years, more or less, the excess cash flow from Howard Hughes' real estate business will be able to fully repurchase the preferred stock. We think Vantage is an ideal transaction to begin Howard Hughes' transformation. Vantage itself is a well-diversified insurance company across both specialty lines and reinsurance. It's got a very experienced management team. The CEO has more than 30 years in the industry. Interestingly, because Vantage was launched recently in 2020, it doesn't have a lot of the legacy reserving issues that insurers who wrote business between 2015 and 2019 have, which we think is a good advantage going forward. Vantage has all the necessary licenses and credit ratings that it needs. We think we will be able to add a lot of investment expertise as we shift Vantage's invested assets more towards a common stock portfolio that we think will be very similar to that that we have in PSH. Overall, we think that by adding a higher growth and a higher return business, which is Vantage, to Howard Hughes, that will further accelerate the company's growth profile and diversify its earnings stream, which we think will ultimately make for a much more valuable company. We also think because of the significant excess cash that we expect the real estate assets to generate over the next several years, it will be a very good use of capital for the company to acquire the PSH preferred investment from Howard Hughes as a way to build Howard Hughes' ownership to 100% economically in Vantage, whereas it's starting out at about 50% today. I'll describe now just in a little bit more detail the terms of this preferred investment that PSH is making. As I mentioned, it's up to $1 billion in a non-interest-bearing preferred stock. We've technically split this up into 14 tranches that can then be redeemed at the end of each fiscal year. The way the redemption works, which we think is advantageous for PSH, is that the purchase price will be equal to 1.5 times the then-book value of Vantage in the future. Now, interestingly, we are buying this business at what we think will be below 1.4 times by the time that we close. So you not only get the growth in the book value of Vantage, but you'll also get the increase in the multiple that we expect. In terms of governance, this will basically be pari passu with common stock. And there are mandatory repurchase obligations in the event of a change of control by Howard Hughes or Vantage. And importantly, this transaction was approved by both of the boards, the independent directors of both boards of PSH and Howard Hughes. So we think that this PSH preferred investment is a real value-creating instrument for PSH, both on its own merits but also the fact that it will enable us to be able to acquire at Howard Hughes the Vantage insurance company, which we're very excited by. When we have modeled out the returns, we believe that this PSH preferred investment would give us similar returns that we would expect for any investment that we would be making in PSH. We like the fact that there is a contractual exit mechanism and a predefined book multiple, which gives us more certainty into the returns that we would see. We think the right way to think about this economically is the preferred will act as if we had made an investment in the underlying overall portfolio of PSH. The reason for that is our returns from the preferred will reflect the book value growth in Vantage, which itself will basically be invested in a portfolio of common stocks similar to PSH. Then on top of that, you'll get a little bit of extra multiple expansion. So we think that overall, the Vantage transaction will materially enhance the value of Howard Hughes, which is great for PSH because it's about a 10% position in the funds. At the same time, we think this is a very attractive security in line with other types of returns that we might make. So with that, I'll turn to discussing the 2025 results. 2025 was a very strong year. Interestingly - and we'll talk about this a little bit more position by position, though - we think that despite an overall return of 20.9% at NAV or nearly 34% in the share price, our businesses, by and large, actually did even better than the overall share price of the fund, which means that our businesses, despite producing strong results for shareholders, are actually becoming cheaper. We think that's a very good backdrop as we navigate the current market environment, which we'll also discuss. I just highlight that our most relevant benchmark is the S&P 500, which returned 17.9%. So our portfolio on a NAV basis outperformed by about 300 basis points. And because we had some narrowing of the discount, the share price was nearly 34%, which nearly exceeded almost all of the relevant benchmarks on the page, with the exception of the FTSE, which had a just phenomenal year, which was backed by a performance of a few of the underlying companies that were large. So we show this chart every year. As Bill likes to say, success in our investment business and in life is not a straight line up. However, the overall results have been quite phenomenal over the last 21 years. An investor who put $1 into Pershing Square when we started the fund in 2004 would now have more than $26. Compare that to the S&P, where that $1 investment would yield just a little over $9. The way that we think about the history of our firm is we break it up into three phases. For the first half of the life of the firm, we managed primarily open-ended, hedge fund-like capital. We achieved very phenomenal results both on an absolute sense as well as a relative basis. Then we had a challenging period between 2015 and 2017 where we made the worst investment mistake of our time, which had a significant diminution in the net asset value of PSH but at the same time was also hurt by the fact that our open-ended funds, which made the primary amount of our overall capital, started getting redemptions due to the poor performance. At the same time, investors in the stock market started shorting some of our other companies, thinking that we would need to sell them in order to meet the redemptions, which further dragged down the results of the overall portfolio. About eight years ago, when we were here in front of you, we presented the slide that you see in the callout box there. We basically said, "We are no longer going to be looking to actively raise or manage external capital in the open-ended structure. Investors who'd like to stay can stay in those vehicles, but we're not seeking to replace the capital. We are going to focus solely on permanent capital." At that time, we recommitted to focusing as an organization primarily on investing. Our investment principles, which I'll talk about on the next page, we put them on a stone deal tablet on everyone's desk as a real checklist. In that period of time over the last eight years, which we call the permanent capital era, our results have been better than ever before. We're very excited about a lot of the future opportunities that we see, both within the existing portfolio and in the markets more broadly. So as I mentioned, the core principles, the deal toys that sit on our desk and serve as a checklist, what we're ultimately looking for - and we evaluate every investment opportunity against these principles - are simple, predictable, free cash flow-generative businesses with strong barriers to entry, limited exposure to factors that we can't control or have a strong sense of where they're going. We also want businesses that have strong balance sheets that are not that dependent upon the capital markets. And ideally, those businesses would be run by world-class managers. There have been occasions where we think those businesses are not the case, but we have the ability to bring a strong management team into the fold, which we've done on several occasions. And so we will be flexible on that principle. As I mentioned, the permanent capital era has been the best in the history of the firm. Our net asset value has increased at just under 23%. Our PSH share price over that 8-year period of time has basically been equivalent at exactly 23%. That performance on a NAV basis is about 830 basis points better than the S&P 500, and is actually about double or more all of the rest of the benchmarks over the last 8 years. When you look at the returns over the life of the firm, what I think is very interesting when you focus on those 8 years of permanent capital is that in 4 out of those 8 years, we've actually had returns that were significantly in excess of what is already a very strong and market-leading return of 23%. The reason for that is we are a concentrated strategy where we are trying to carefully curate a portfolio of about a dozen of the world's best businesses. Any one investment that we get right can have an enormous result. Sometimes you get a few of them right plus the asymmetric hedging strategy, and you can have some very, very large and positive returns. On this page, we just show as a benchmark over a lot of different holding periods how PSH has performed through the life of the firm. You can see on a 1-year, 5-year, 10-year, 8-year and over the life of the firm, we've pretty much met or exceeded the market thresholds. The one chart that stands out, which we're working very hard to change in future presentations, is to make sure that that PSH since inception line also follows the trend of all the other relevant periods. Interestingly, when you look at our returns and you decompose them into monthly returns, you'll see we get about 50 basis points or 0.5% of outperformance every single month. But when you then look into the months where we and the markets are up versus when we and the markets are down, you see a drastically different picture. We actually don't outperform the markets very often in up months. We keep pace, but we don't outperform. It's really in the down months in which you see the beauty of our business model, our investment strategy come through. And we think that's really for two reasons. 1 is the types of businesses we buy, high-quality businesses with strong balance sheets, tend to outperform other businesses in periods of market drawdown. The second reason is our asymmetric hedging strategy, where we've been able to find instruments that yield a very high return for a very nominal amount of capital. Those often pay off in periods of market drawdown. Then we're able to use them in order to buy cheap stocks. This is a similar page, which is just through the life of PSH itself but shows the same trend, pretty much on par with the markets during the average month, a little bit behind in up months but similar strong performance in down months. Now we'll talk about 2025 results. We had a couple really successful investments last year. Alphabet contributed over 10 points of total performance to the firm. Then the combined Fannie and Freddie position contributed about 10.8 points of performance. We also had a very strong assist from Brookfield, Uber, and Amazon, which produced very good returns. Then most of the positions in the portfolio had more modest but contributing results. So our winners, if you will, were up over 34% last year. Unfortunately, we also had a couple of detractors, which were Chipotle and Nike. Chipotle had been a very successful investment for us over nearly the nine-year history in which we had invested in the company. But there was a leadership transition about a year and a half ago. And unfortunately, the performance of the business has not lived up to our expectations nor the expectations of the stock market. And last year was a very tough year, cost us about 4.6 points of performance. Ultimately, as we'll discuss a little later, we reunderwrote the investment and decided that it no longer gave us the certainty and growth profile we were looking for. We've actually exited that investment. Nike, we got that one wrong, cost us about 2.5 points of last year. As much as we try to get everything right and use our checklists, every now and then we get one wrong. I think that's an example where we still got some improvement to do over time in our results. So when you take the 7 points of detractors, you add in the bond interest expense. That gives you about 8 points to take off against the 34.4. That's how you get our 26.5 gross return, which then after fees is just under a 21% return from last year. We manage today, in total, about $30 billion worth of assets inside of our complex. About $10 billion of that is associated with Howard Hughes, just under $20 billion with the core investment funds. As you can see, PSH is by far the largest at about $18 billion. Similar story if you look at equity, which just subtracts out debt from Howard Hughes and PSH, a little over $21 billion of total equity capital managed, $16 billion of that from the core funds. PSH by far the most significant at just over $14 billion. Importantly, as you see on each of these funds, we are the largest investors. Insiders account for about $4 billion of capital at PSH and about 28% of the total capital. Our money is invested alongside of yours. We share a common destiny, which over the last eight years has been very positive. We're excited to continue that trend to the best of our abilities in the future. With that, I'll just give a quick update on some business and organizational things before we move more into our thoughts on the markets and specifically the portfolio. It's been a strong period both in the portfolio over the last 12 months but also in terms of the strategic progress we've made with PSH. That resulted in about a 34% total increase in the share price, which is nearly double the returns of the S&P 500. We made new investments in Hertz and Amazon. For the first time today, which we'll talk about in more depth, we're disclosing an investment that we made in Meta at the end of November of last year. We're very excited about the potential for that company. At the same time, we also exited investments in Chipotle, Canadian Pacific, and Nike last year. We actually, within the last week or two, sold our last shares in Hilton as well. As I've talked about before, last year was a very important year for Howard Hughes and the business transformation there. We're excited about the future. We've continued to focus, as I mentioned, on redesigning the PSUS transaction structure. Last year was actually a year of a lot more portfolio turnover than we typically have. We made 3 new investments. We exited 4. The reason for that is that our idea generation remains incredibly robust. We think that the increase in the market and macro volatility combined with very fast-changing narratives, I mean, I think the last couple of weeks really highlight this, as well as just idiosyncratic and misunderstood situations is creating a lot more opportunities than what we have historically seen over the last decade or two. And we think that trend is probably likely to continue. The nice thing about our approach is we maintain a library of hundreds of companies that we study on a periodic basis. And therefore, we think we have the ability, particularly with these larger companies, in order to move very quickly when we think the market has got it wrong and we can find a business that is meeting all of our core principles. So real quickly, Amazon, which we bought last year, about 13% of capital at the end of the year, is the dominant player in two very distinct yet very good businesses, the cloud business they call AWS, which has got a great secular growth trend and competitive position, as well as the dominant e-commerce retailer that just about all of us use, particularly in the United States but even outside of the United States as well. For Meta, which is about a 10% of our capital at the end of the year - simply put, we'll talk about this in more detail - but we think it's a great player in the digital advertising space. That space is growing very rapidly. We actually think, more than many companies, AI will be an enormous beneficiary that's already seen the results today from AI. And then lastly, Hertz, this is a mispriced option in our view where we got to buy the common stock, which means there's no expiration on that option, which we like. It's basically a turnaround where we're already starting to see the results in a business and industry that are just okay, don't meet our core principles for a core-sized position. But if we get it right with the experienced team and the results we're seeing, we think we do have it right, this could easily be worth five or seven times our money. And so we will put down a small amount of capital where we could, in theory, lose a large portion of it if we think the returns are very significant. Organizationally, we maintain a focus on having a very lean organization, very investment-centric experience and organization. But we also, every now and then, make some key hires. Last year, we had 3 big ones. First, we hired a new member on the investment team, Jordan Aguiar-Lucander, who actually just joined us about a week ago. He's here today. So if you see him, please say hi during the cocktail hour afterwards. He was with Silver Lake for about 4 years and graduated from Harvard in 2021. We also hired Jill Chapman, who is also here today, as the head of our corporate investor relations last fall. Jill was actually the head of IR and corporate development at Hilton for more than a decade and was the top-ranked investor relations person across Wall Street for nearly that entire decade. Then we also added a little bit of extra muscle to our legal department. We hired Lukas Richards as General Counsel at the beginning of the year. He was previously a Partner at Paul Weiss. Lastly, we had a departure on the investment team, Manning Feng, at the end of last year. As you'll see in this organizational chart, we have enormous depth and tenure across the firm at really every single level, which is very anomalous and that we're very proud of. In particular, across each of the business functions, what I would highlight is most of the people have been here for the better part of two decades, which is practically unheard of in our industry today. Similar story with the investment team. In the investment team, you'll see that several of us have been here for closer to two decades. The vast majority of the investment team, except for some people that we hired a few months ago or a week ago, have been here for the better part of a decade or more. We think that that is really crucial in an environment that we're dealing with today where having a lot of experience, longevity, trust, and a disciplined process will make us better investors that hopefully can take advantage of some of the opportunities that the markets we think are giving us today but also likely in the future. With that, what I thought we would do this year is give you a little bit more in-depth views on how we think about the market as a whole, which is a little bit different than what we often have done. But I think our core principles are that we are bottoms-up investors who are focused on carefully curating a portfolio of 12 or 15 companies that we think are industry-leading, world-class businesses. But as I mentioned, we keep a library of hundreds of companies updated that we believe meet those principles where we're just waiting for the price to be right to move. Getting all these data points across hundreds of businesses, combined with the macroeconomic work we do in our asymmetric hedging strategy, yields very interesting results for the market as a whole. And we think it's increasingly important for us to have a perspective on the context of the overall markets with the specific situations that we would be looking to acquire. And so we'll share some thoughts today. The way we frame this is we really want to take a look at the markets and what's happened since COVID about six years ago because it's been an extraordinary period of time. So to start with, this is a chart of the S&P 500. Over the last six years, the S&P has more than doubled, is up a total of 112%, which works out to about 13% annually over that period of time. What's interesting is the longer-term market returns are anywhere between about 9%-11%. So this has been one of the better periods of six years that we've seen in the stock market in quite a while. Even more interestingly, if you look at just the last three years, those results have been even stronger, so 24% in 2023, 23% in 2024, and 16% last year. A lot of economic forecasters, market strategists, and just people that are on CNBC are talking about how the high rate of growth we've seen in the stock market cannot be something that is allowed to persist over time because it's too high. Therefore, we're going to need to have a significant drawdown in the equity markets or a period for a long time of very poor performance in order to get back to a trend level. One of the things that we do, though, when we look at the stock market is you can actually think about it like any other business that we would evaluate, where ultimately how the stock market or any individual company's share price changes over time is a function of two things, how its earnings grow and then how the multiple that investors assign to that earnings per share also changes. And so when we decompose the stock market for the last six years, what we've found is that that 13% annual rate of growth is actually coming primarily from earnings growth in the businesses. So 10 percentage points of that 13 percentage points of stock market annual return is just from the earnings growth of those businesses. Only 3% is from multiple expansion. So said differently, 80% of the growth in stocks that's happened over the last six years is because their earnings are growing, which we think is generally a more sustainable trend. Now, what people have noticed, and it's not escaped us either, though, is there's something going on where in the last six years, earnings actually are growing much more rapidly than they did prior to COVID. So previously, before COVID in the last five years, earnings grew at about a 7% annual rate. Yet now, they've accelerated. They've been growing over the last six years at a 10% rate. So some people say, "Well, that just means that we've had too much earnings pulled forward. Earnings are too high. And we're going to have to have a period of time in which future earnings will be weak. And therefore, that's likely to mean that multiples are too high. And the stock market needs to slow down or fall a little bit." However, if you decompose and you look at the S&P 500 and all of its constituent 500 component stocks, you'll find something that is even more fascinating, which is that 490 of those 500 stocks are forecasted this year to grow at exactly 7%, which is the same rate that earnings have historically grown for the market prior to COVID. What's different is that we now have 10 companies that account for 40% of the overall market value of the S&P 500. And those companies are forecasted to grow 25% of earnings per share next year and 20% the year after, which are very strong growth rates that are multiples of all the rest of the companies in the stock market. And because they matter so much, because the S&P is an index that's weighted based upon market capitalization, those 10 large companies have an enormous influence. And as a result, the S&P is expected to be growing its earnings even faster for the next 2 years, not the 10% we've seen over the last 6 years on average but actually about 14%. So the key question then is, is the rate of growth of the top 10 companies, is that sustainable? Now, we actually own three of these top 10. We've actually done a pretty good study of the remaining. While I won't discuss any specific stocks outside of the ones that we own in there, what I would say is our conclusion is that on average - although maybe not every single one - but on average, we think that these businesses have very strong moats, have very good enduring competitive advantages, and have secular growth trends that should allow them to continue earning at this higher rate over time. So what that means is if it's the case that we would expect, because of the changing market structure and the quality of these businesses that are contributing more and more to earnings growth in the stock market, maybe it's likely that we will continue a higher rate of growth over the next several years for earnings. In this chart, you can see that that's 2x the level that we had prior to COVID. If that's the case, the 17x earnings multiple that investors assign to the stock market prior to COVID should naturally be higher because of increased market growth. While we don't know with precision what the right multiple should be, we would observe that a 14% growth rate is suggestive that the stock market may not be, by any measure, particularly expensive. I think you could even argue, if we were looking at a high-quality business with this growth profile, may actually have more upside opportunity if this growth rate can be sustained. So we think that that's reason for optimism more broadly in the context that we operate. I'll talk about another trend that you may have seen in our results over the last several years, which is we have increasingly increased our investment exposure in PSH to the higher quality, higher-growth mega-cap companies. At a very high level, although we find each of these opportunities on a bottom-up basis based on the idiosyncratic merits, what we've noticed is a trend where when you look at the multiples that we are owning these businesses - and the multiples are generally lower when we actually buy them than they are today - they're really trading close to in line or a very modest premium to the overall market multiple while delivering substantially faster and, we think, secularly sustaining higher earnings growth. For example, the market multiple today is 22x. We think over the medium term, that could be 12% or 13% based on our best estimates. When you take an example like Uber, that company is growing earnings per share over time at 30%, we think, over the next 5 years. It trades at a discount to the market of only 21x. Amazon trades at 26x. But we think will grow earnings at approximately 20%. Alphabet, 27x and 18% growth. And then Meta, as I mentioned, 22x earnings today. And we bought it at 21x, which is a discount to the market, growing at about 20%. The other advantage of these, aside from the fact that we think we're getting more earnings growth in these incredible companies that are a lot better than the average company, is also that they're very large, which means when market narratives or macro volatility is high, we can move incredibly quickly to establish a position, sometimes in a day or two in these companies, when we're prepared to act. And so we think that is an increasing advantage for an investor in our strategy that's very concentrated because any one right decision can make a material impact on the results. So what I'll do, and I thought was interesting, is I'll describe each of those four investments I just mentioned in a little more detail to highlight how we think about they came about and why we think it's something that would be very helpful for us as we navigate the future market environment. So for Google, at Google, we bought our shares almost three years ago in March of 2023 when the narrative was that Google was an AI loser. OpenAI had come out with a product at the end of 2022. Google's competitive response in February of 2023 fell flat with investors. As a result, we had the ability to buy what we think is one of the world's great businesses for less than 16x earnings, which was a significant discount to the S&P at that time. Our belief was that the company would ultimately be viewed as an AI winner. And it was just a matter of time until the market saw what we saw. Less than three years later, as you can see on the bright blue line, the market now fundamentally believes Google is an AI winner. And the stock has traded as high as 30x earnings or basically double the multiple at which we acquired it because now they have released a set of products that people believe are best in class. And people are now coming around to seeing what we have seen on Google. With Uber, it's a little bit of a different situation. But we saw a company that was growing its earnings faster than basically anything else that we had owned pretty much throughout the history of the firm. Last year, when we announced the position in January to today, earnings have grown by 43%, which is incredibly rapid. As I mentioned, we think that there's the potential for the business to extend 30%+ growth for several years to come. However, people have been very concerned about the risk in the market of autonomous vehicles. We think that's a misguided concern. We don't think autonomous vehicles will have a large impact one way or the other for many years to come. When they do, we actually think it's going to be beneficial to Uber's business. But while we wait and the market kind of fluctuates its views on this long-term secular concern, we have a business that is compounding its earnings growth very, very rapidly. That means that effectively, the shares can get cheaper each year we own them if the multiple doesn't appreciate substantially while we still make money because the earnings are that high. So Uber has actually been a stock that's returned more than a double-digit return just because of the earnings growth, even though it's now trading at a cheaper multiple than when we bought it. In In a slightly different way, Amazon, we acquired shares in a company we'd followed for more than a decade last April amidst Liberation Day and a lot of macro and market volatility at the lowest all-time valuation for the company since a brief moment in the Great Financial Crisis in 2008. We think that ultimately, the macro volatility that allowed us to buy Amazon is probably a trend that could be with us for a lot longer. Amazon's a great example of how we're able to buy businesses at very low valuation when the markets just really don't discriminate and throw the baby out with the bathwater, if you will. Then Meta, we think this could be the potential next narrative shift in our favor. In November, we acquired shares, as I mentioned, at 21x earnings. We had that opportunity because the company had announced on a recent earnings call that they were going to significantly accelerate their AI spending well beyond the potential of what anybody thought. People viewed that as a negative and that the company would be undisciplined in its spending that may not return a lot on its capital. We saw things differently and thought the investments they're making are going to be very prudent because we are already today seeing the benefit of those investments in the AI results. And we think that long-term, Meta has one of the biggest opportunities to benefit from AI overall. And so we're very excited to own that position at what we think is a very low multiple and for potentially the narrative to shift in our favor in the future. So with that, I'll walk through each of the specific portfolio companies and give you an update on their progress and how we think about them. But I think what you'll see in these slides as a picture as a whole is our stocks in general did very well last year. But we actually think the portfolio as a whole is among the cheaper levels that it has been in a very long time because the business performance was even better than the individual stock prices. At the same time, we have a nice cash position today. And we are definitely looking at a lot of the opportunities that the market has been giving us over the last handful of quarters or months and in particular, even weeks because there's been a lot of dislocation lately. So I'll start with Brookfield. So Brookfield, as you know, is an investment that we've owned now for the better part of two years. It's a leading alternative asset manager, very high-quality business model, rapidly growing fee stream. We believe it trades at a significant discount to both its sum of the parts value as well as our underlying view of its intrinsic value. The company is a leading asset-rich asset manager that has deep domain expertise. The business used to actually be an operating business in infrastructure for the better part of 100 years. We think going forward, that's going to be very beneficial as they take advantage of a lot of the infrastructure build-out opportunities. The company's largest asset, of which they own 73%, is the $84 billion Brookfield Asset Management, which is the asset-light recurring management fee stream portion of their business. We think that that business is incredibly well-positioned as there is likely a multi-trillion-dollar wave of AI investments that need to happen over the next several decades. Brookfield's experience with infrastructure puts them in the leading position to capitalize on raising funds that ultimately benefit from that trend. We also think that despite reasonably strong performance, the financial profile and growth of the business is likely to accelerate in the near term. For example, last year, the company grew at a double-digit rate. That was actually well below its structural potential growth rate because the carried interest or the performance fees it earns from its private equity funds was well below target. The company is making some investments in their cost structure that we think are going to be very helpful in creating stronger growth in the future. Over the near term, we think the company's earnings could grow as much as 25% a year for the next several years. That's because we think we're going to see more of a benefit from that performance fee carried interest realization as well as a very rapidly scaled build-out of their fixed annuity insurance business that they call Wealth Solutions. Over the long term, we think that our earnings outlook remains very bright. Management has a target for 25% compounded earnings per share growth until 2030. We think those targets are achievable. And so for a stock to only trade at 16x earnings based upon that high future growth profile, we think that is a very significant discount to its intrinsic value but also a very large discount to comparable U.S. peers who are not even growing as quickly. So for last year, the company from when the company returned 21% and this year is up a couple% and has done even better than that since we announced our position in May of 2024, about just under two years ago. Next, Uber. Uber is a high-quality royalty-type company on the future growth of mobility and transportation. We think it has the highest level of earnings growth in our portfolio that could persist for many years to come and is trading at an incredibly low value because of what we think are misplaced concerns around autonomous vehicles, which are likely longer-term to be a benefit to the business model. The near-term financial results are great. Bookings, which is their key revenue metric, increased 19% last year and actually accelerated throughout the course of the year. The company is showing new all-time highs on a key number of metrics such as the number of users, trips per user or engagement, and then the total trip growth in terms of the number of rides that people take in Ubers around the world. As a result of strong revenue growth and strong cost discipline, the company grew its pre-tax profits by 50%. We think that they can continue to grow earnings over the medium term at a very attractive rate. As I mentioned, we think that earnings can grow 30% while the company is able to grow its revenues at least in the mid- to high teens. They're able to do that while still making investments for a world that we see over the longer term where autonomous vehicles will be much more present. Despite that, as I mentioned before, the company's valuation is very undemanding at only 21x earnings. We think that despite the market headlines leading to that low valuation, Uber's actually showing us right now that they are partnering very successfully with all the potential AV vehicle companies, with the exception of Tesla as of right now, and that that is likely to yield a lot of fruit into the future. They've got agreements in over 10 cities by the end of this year. They have a key partnership with Waymo where they are driving very high utilization rates, which are the key metric for AV companies and being able to increase their fleets in a profitable way over time. We think that that's going to help make a future expansion of the partnership more likely. Nvidia is now getting into the game and has actually launched some open-source technology that will increase the availability of autonomous vehicles to a large number of players who will need to partner with Uber. And then there's also Tesla. Tesla, while it's still not at scale yet, we actually think over the long term, the only fundamental economic logic is ultimately for Tesla to start partnering with Uber as well. But to the extent that Tesla decides to go alone and there's a lot of other players who do partner with Uber, we think Uber will do incredibly well over time. So as you can see, it's been a little bit of a volatile road for Uber. The stock was up about 23% last year since we announced from the close at which we announced our position in January, although it's down about a high single-digit 10% rate this year as it's very sensitive to some of these AV headlines, which we ultimately think are a matter of time before that goes in our favor. But fortunately, the earnings growth of the business should be able to allow for increased share price performance even in spite of that. Fannie and Freddie had a great year last year. The stocks more than tripled as the Trump administration continued to reiterate that it wanted to privatize these businesses over time. The administration has made three key priorities. First is home affordability. So they want the spread of mortgage rates to narrow relative to those of Treasury so that financing for homes becomes more affordable. They also would like to show the broader market and taxpayers a mark-to-market on their investments. So they want to get a mark by having these companies become public so they can tell people how much they have made them through their ownership in the financial crisis. And lastly, they want to increase the long-term value of those taxpayers' interests. We put out a presentation in November that we think addresses all of these three key objectives and is a very simple solution. And that is where Treasury and the regulator FHFA can account for the repayment of the Senior Preferred Stock, which has been more than repaid over time. Treasury can exercise its warrants. So it goes from having effectively options on the company to true common stock. And then they simply list on the New York Stock Exchange. We don't need to have an IPO that raises in capital. By having the stocks trade publicly, which they can do, the government gets the best of both worlds. They get to create a mark. They can allow the companies to stay in conservatorship until they feel the moment is right to release them. During that period of time, the businesses retain capital so that when they do come out of conservatorship, they will be even safer than before. While the shares were up significantly last year, the share prices this year have actually decreased between 20% and 30% as people are focusing on how President Trump has directed his efforts elsewhere at the start of the year. But we think that underestimates how easily and how quickly the Trump administration can shift their focus back to Fannie and Freddie in order to create a lot of value for taxpayers. So as you can see here, as I mentioned, the share prices were up 227% and 211% respectively last year and a decline between 20%-30% year to date. For Amazon, which is a position that we bought right after Liberation Day in April of 2025, the macro volatility from Liberation Day gave us the ability to buy that business at a really attractive valuation. As I mentioned, the company operates in two category-defining businesses. They have AWS, which is their leading cloud business. That business is an oligopoly with very, very strong multi-decade secular growth trends that we think is a fantastic business. And Amazon has the leading position. At the same time, Amazon.com is the largest e-commerce global retailer. They did over $700 billion worth of merchandise fulfillment and orders over the last year. They have an amazing logistical network that continues to get better and offer better shipping times for people each year as they get better and they further reinvest in that network, which means it's even harder to compete with Amazon today than it was a couple of years ago. We think AI can be a big beneficiary for the cloud business even though the cloud business is very large today. For example, the company had about $140 billion last year. They were still growing at that scale at over 20%. They would have grown even faster than that. But they didn't have enough supply. Demand was much higher than supply. They weren't able to meet that demand, which is why they're making significant investments over the next couple of years to double their data center capacity, which we think is a good use of capital and will allow for the business to grow at an even higher rate. In the e-commerce business, we're excited about the potential for them to significantly expand their profit margins. We think they could potentially increase as much as double and partially due to some initiatives in terms of taking advantage of the scale from their logistics network, more automation. But importantly, an increasing number of those businesses inside of the e-commerce are much higher margin businesses such as advertising. Also been encouraged that there's been very limited effects on Amazon's cost of goods sold since the Trump tariffs happened just under a year ago. So after we bought our position from the time in April to the end of the year, Amazon did quite well. It was up about 34%. It's given back a little bit of those gains today. It's down about high single digits to 10% after reported earnings where it announced it was going to invest more than users anticipated. We think that these investments will ultimately be shown to be very valuable and important investments for the company. But as of right now, there were some investor questions about whether they should be spending that money or not leading to a decline, which we think is temporary in the share price. Universal Music Group is really a royalty on music and streaming compounding over time. We think it's an amazing business model. And we think that growth is actually likely to accelerate over the coming year. The company spent a lot of time doing a number of Streaming 2.0 deals. What this means is they actually will be in control of their pricing for the first time. Right now, the way pricing is set is that the digital service provider, think of Spotify, when they take up retail prices to the end user, that's when UMG gets a price increase. UMG has now reworked the deal such that when they take up prices, meaning wholesale prices, they get a benefit to revenue. We think that gives them a lot more opportunity to highlight how much value they have in taking up prices because the music is so cheap to listen to on an hourly basis. They've also been doing a very good job of partnering and creating new product tiers, which better allows them to segment their customers and charge people like superfans more money for unique and better experiences who have a demonstrated capacity and willingness to pay more. We think AI is also going to be an opportunity and a tailwind to growth. On the music side, we actually think that UMG is starting to monetize AI with its partnerships by creating tools for music discovery and creation. We think that it actually will lower the cost of making music for a lot of its key artists over time as well as providing a huge ability for the company to better evaluate its own cost structure, which we think has a significant opportunity. We think AI will be in a number of ways a benefit for UMG. So despite all this positive progress, UMG currently trades at really its lowest valuation since it's been a public company for the last 3.5 years. We think this is primarily related to two technical factors. Last summer, Vincent Bolloré and his son Cyril Bolloré, who are the largest shareholders and have about a 33% interest in the company, received an adverse court decision on one of the investments they control. People thought that that might require them to buy out some minority shareholders. As a result, they would need to sell some of their UMG stock. That potential overhang, which hasn't happened—there was actually a court decision that reversed the prior decision, I think—has continued to create a lot of uncertainty in investors' minds. Nobody wants to buy ahead of when there could be the largest shareholder selling a significant portion of their stake. Secondly, we helped catalyze U.S. listing. That has also gone through a series of delays. We think that that is something that's going to be very beneficial for highlighting the value of UMG, getting what is really a U.S. company in all senses of the word except for where it's listed now, the appropriate market backdrop and investor coverage that it deserves. But that's also been delayed. We think those things are creating overhangs on the stock. The good news is both of those should be solved with the passage of time. As a result, right now, UMG trades at a very compelling valuation at 18x earnings, which we think is a significant discount to what it's worth. It's actually even cheaper at 17x earnings when you strip out the value of the Spotify stake that they own. As you can see on the chart, it's been a very volatile share price. One thing I'd want to point out for you is if you go back to March of last year when the shares were at EUR 26.70 or more than 30% above the levels, we were able to take advantage of that and monetize a very significant portion of the position that we had at much, much higher prices. We think that was something that was very beneficial for our returns last year. You can also see the very dramatic decrease in the share price almost from the moment of EUR 28 in the middle of the summer when Cyril Bolloré had to step down from the board of directors. You can just see how the share price has further declined for that technical overhang since then. Next is Alphabet. The company is doing a wonderful job of leveraging all of its core advantages, the vast data that it has on all of its users, the distribution where it has billions of people who use more than a dozen of its or a half dozen of its products around the world, leading technical infrastructure and a decades-long research capability, putting that all together and being able to harness the benefits of AI from that. We're already today seeing that AI is having a transformative impact on Search and YouTube. Some of you may have seen when you go to the Google search bar now, you get AI Overviews in AI Mode. That has significantly increased the usage of the Search products. That's rolled out to more than 2 billion people around the world, over 200 companies. And most importantly, it means that people are spending more time searching more keywords on Google, particularly the youngest demographic, which people previously thought was most at risk of going to alternative chatbots instead of using Google. At the same time, there is a recently announced partnership with Apple where Google's Gemini model will be providing the power for Siri, which we think validates Google's AI leadership. And similarly, in YouTube, the ability to use AI across video and image generation as well as content recommendation to users is really benefiting both users of YouTube as well as the content creators themselves. And we think similarly in the cloud business, they're really using AI in order to help take some market share from some of the key competitors. Despite being $70 billion of revenue last year, Google in the last quarter grew its revenue at nearly 50%, which is industry-leading right now. The profit margins are scaling very rapidly due to this significant increase in revenue growth. Lastly, there was an antitrust review that had really pressured Google's shares for the better part of the last year, which resolved in a very favorable way for Google at the end of last summer. As you can see that on the chart here, along with the kind of view that Google was an AI winner, led for significant increase in the share price. Overall, Google increased its share price about 65% last year and is up modestly a few percentage points year to date. All right. Next up, Meta. So Meta is a $1.7 trillion company, which is a dominant leader in a very fast-growing space, which is digital advertising. The company has more than 3.5 billion daily active users across its product base, which is somewhere between 40%-50% of the world's population. So despite having a very high level of product across the world, they're still growing rapidly and actually expanded users by 7% last year. They have about $200 billion in revenue. So they're a very high-scale company. Yet they're still growing in excess of 20%, which is pretty amazing. The business is led by an iconic founder and CEO, Mark Zuckerberg. And they really operate in two core businesses. The first, which they call their Family of Apps, which is the Instagram, Facebook, and WhatsApp products, which are based on advertising and are free to users. And then the second is Reality Labs, which is really an investment in the future. It's making enormously large losses today of about 25% of the overall profits of Meta, where they're trying to stay ahead of what could be future technologies for augmented reality, metaverse, and potentially wearables like the Ray-Bans, where there's built-in AI technology. Despite having a really great growth profile, a very entrenched user base, the company, as I mentioned earlier, only trades at 22x earnings today because people are concerned about how much they're spending on AI, even though we have evidence that AI is already accelerating the business. The company's also made commitments to reduce the losses from Reality Labs going forward. We don't know if they will ultimately reduce those losses to zero over time. But if people stripped out those losses, Meta would be significantly cheaper than 22x and would be only 18x, which we think just really highlights the unique value of this franchise that's on sale today. A little bit more specifically on our investment thesis, we think Meta is unique in that it's a high-quality advertising business model that gets better as it gets larger. And the reason for that is it benefits from scale both for the consumers who use the product and for the advertisers who are ultimately their business partners. For users, the more that they scale the business, the better they get at recommending you videos to watch on Instagram or people to connect with on Facebook. And that makes your user experience better. It means you spend more minutes per day on the app. That is also a huge win for advertisers because the more time you're spending on there, the more they're able to advertise your product. I know myself, I have bought way more product than I'd like to admit on Instagram that I never knew I needed or wanted until I was fed an ad recently. And I think that trend is going to continue. I also think what's interesting is that having enormous data on all of the users allows Meta to better target those users for products that they will buy and at the same time will make a more demonstrable case to the advertisers that they're getting paid for the returns that they're spending, which can be incredibly valuable. So we think Meta is a very clear beneficiary of AI integration. Interestingly, on the way that it used to work on Instagram and Facebook was you basically would look at content that was recommended to you or that your friends posted, your family posted. Now, increasingly, you're looking at content that is being given to you by AI. And it's been shown that that AI content actually is something that's much more interesting to you than what your friends or your social graph might be posting. And as a result, people are increasing their time on them. And that's a way in which more engagement for Meta leads to more dollars and that AI is going to be very beneficial. And that's really happening because Meta is getting better at figuring out more data on their users and then being able to put that into a system where AI can show better ads as well. We also think over time, they're going to be able to automate a lot of the advertising campaigns. There are a lot of large corporations who have departments of hundreds of people or maybe even dozens of people for some smaller businesses who are focused on advertising to users on Meta's products. By automating that, we think it makes the value proposition even more because we don't need all these people in order to help set the campaigns. But rather, you can use Meta's AI to set the campaign for you at the click of a button. Long term, we think there also will be some new use cases. Think, for example, business AI assistants. If in the Reality Labs, the Meta Ray-Bans end up working, that could be a very interesting business line for the business in the future. We think longer term, although near-term investments are depressing the company's earnings for this year, we think the business will return to its rapidly growing earnings per share algorithm over time. So we think it makes a lot of sense what they're doing and investing right now and that the returns will be good. But we're comforted by the fact that the company has shown in 2023 that they have an ability to pivot very quickly if they see that they're not getting the returns on the investments they make. Mark Zuckerberg famously called 2023 the year of efficiency when they took out a lot of the investments that they had made during 2021, 2022. While we think these AI investments they're making in 2026 are very good ones, we like the fact that if for whatever reason we and the company got it wrong, we have confidence that they will be able to significantly increase margins by taking out a lot of costs. We also really appreciate the company's unlevered balance sheet. They're a very high-margin core business, which provides them with a lot of financial flexibility to make these investments. You can see Meta's share price was up about 11% in the month that we owned it in December and is up modestly to date. We still think it's a very cheap stock. Restaurant Brands is a high-quality royalty-based business model that we think is still trading at a very significant discount to what it's worth. Interestingly, 80% of its business, the company is outperforming all of its peers. So in Tim Hortons, which is its largest business, about 50%, the same-store sales are much larger than the broader QSR industry in Canada. Their international business, which primarily is Burger King overseas, comparable sales are 5% and are a lot greater than McDonald's. At the same time, the company has had to make efforts in its China business and in its U.S. business, which has made it a little bit more capital-heavy as they've needed to step in for some franchisee partners that weren't performing. But in both of those cases, we think the company is now on the right track. In China, they were able to return the business to growth. They've now sold the business to a new franchisee who's going to put in a lot of capital to really accelerate the unit growth in China going forward. For Carrols, which is the U.S. franchisee for Burger King that they bought in, they've been able to make some remodels. They're already now very successfully improving the results of the business and starting to refranchise back out. We think that over time, they'll have a much healthier business for Burger King U.S. and Burger King China while getting back to the capital-light model that we really appreciate. Despite all of this, the company's actually continued to have 8% adjusted operating profit growth, which is really industry-leading across all of its peers. What's interesting about that is we think that growth rate could accelerate as they get back to the normal level of unit growth that's been a little bit slower the past several years. Despite that, it still trades at an enormous discount to peers. It's only 18 times earnings. It's more than a 20% discount to the relevant peers. A lot of the peers we actually think are pretty cheap as well. Despite being a cheap stock, QSR was a contributor to our results last year. It increased about 9%. It's up a further 4% this year. I spent a lot of time talking about Howard Hughes earlier. I'll just make a very brief remark, which is that the core Master Planned Communities real estate business in Howard Hughes remains incredibly strong. They did the highest level of profits ever in the history of the business. In their leasing portfolio, they had strong results in their same-store sales, leasing rates, rate, and net operating income growth. In their condo business in Hawaii, they have about $4 billion of contracted revenue that's coming from condo towers that they're building. We think that the combination of all of these assets doing so well is going to provide a lot of excess free cash flow for Howard Hughes to redistribute over time into other businesses. And as I mentioned, we're already starting to see, we think, the groundwork being laid for the transformation of the company. So last year in total, Howard Hughes was up about 4%. And it's up 6% year to date. So really, over the last year and change, it's up about 10%. But more importantly, the shares are up significantly since we made the announcement to invest in the company when it was at $66 a share. So we have more than a 20% appreciation in the rate relative to the $84 today. So I'll end now by talking about Hertz, which is an asymmetric position. That's a small percentage of our capital, not a core investment, but a very interesting opportunity, which we do occasionally, even though they're small, and think that they could have a lot of upside. The company's in an early stage of turnaround with a new management team that has a history of success in the airline industry. We think of that turnaround, while still early, as already yielding a lot of very strong results. They have refreshed their vehicle fleet, which has lowered their depreciation costs, meaning they're getting closer to having higher levels of profitability. The unit economics on that refreshed fleet are significantly better than their older vehicles. As evidenced by this, vehicle utilization or how much people are using the cars that Hertz rents out is at 84%, which is the highest level among its peers right now and is actually among one of the highest levels in the last decade since 2018. The company, importantly, had its first profitable quarter this year in the last two years. Over time, we think the company has a lot of potential to increase its revenue outside of its core rental business. For example, selling cars is part of Hertz's core competency. But they sell them now through the wholesale channel. If they move to the retail channel, which they're starting to do, they can actually achieve a lot higher profit per car. We think that that could be something that would significantly enhance the earnings of the business going forward. At the same time, I talked about AVs with Uber. We actually think Hertz has the perfect infrastructure to be a partner to a lot of the AV operators. They have a lot of vehicles. And they know how to take care of the vehicles. They know how to fix the vehicles. They know how to clean the vehicles. And they know where to store the vehicles in these massive parking lots all around a lot of key locations in the U.S. and around the world, which we think would be very advantageous for AV operators who really have none of that experience or physical infrastructure. So when you take that all together, we actually think the business has the ability to significantly increase its profits. Management has talked about a $1 billion target over the next couple of years. We think that that makes a lot of sense if they continue executing the way that they are. If they achieve that plan, we think that Hertz's share price can increase by many multiples, perhaps five or seven times. Since we announced our acquisition last April, the shares have gone from about $3.81 to $5.28. They were up about 40% last year and are up very modestly this year. I'll close just by talking about a couple of the positions that we exited. I mentioned we had four last year and then early this year, including Hilton. The first is Chipotle. Chipotle, over the course of its nine years, was an incredibly successful investment for us in the first eight years and had a little bit of struggle in that ninth year. It created, over the long term, a lot of value for stakeholders. I think, importantly for us, we actually were able to monetize 80% of our initial shares when Chipotle was at close to much, much higher levels than where it is today. And we only were left with 20% of the position last year when we had an unfortunate drawdown in the share price. The reason why Chipotle was successful was we made our investment in the fall of 2016. We were immediately able to put directors on the board and transform the company, two of those from Pershing Square. Less than a year later or, excuse me, over a year later, they were able to recruit Brian Niccol, a CEO. And Brian had unbelievable performance over the next seven years. Same-store sales averaged about 8.5%, which was industry-leading for a business of that scale. Profit margins expanded by nearly 1,300 basis points, which is incredible. Earnings per share grew at an incredibly rapid rate of over 35%. We were able to monetize the vast majority of our shares over that initial period at very attractive returns. However, things really changed in the summer of 2024 when Brian got recruited to go run Starbucks. His COO became the new CEO. While we had high hopes for him, unfortunately, the business results to date have not been what we would have expected. It's partially due to some headwinds in the industry. Peers are also exhibiting these. But we would have expected a lot better performance based on the history from Chipotle if we thought that a lot of the decisions that were being made there were the right ones. As we reevaluated this in light of the business results, ultimately, we decided that under existing management, the range of outcomes for the position was much wider than it was. The returns were not as high as we thought that they should be. We ultimately decided to sell our shares to allocate to other opportunities. As you can see on this chart, we had a very successful run for the first 8 years. We bought it at $8. Shares were almost 8 times higher at that level. Good news is we sold a lot of our position during that period of time. Then had a really tough year where they were down about 50% last year, where we owned only a minority of our original shares but decided to move on. Hilton was another successful investment for us over our nearly 8 years of owning it. Earnings per share increased about 150% over that period of time. That was really due to fees, fee revenue growing about 70%, largely in part due to the expansion of their hotel concept around the world, but also amazing cost control. Hilton's the only company that I've studied where overhead costs are flat over the last 7 years, which is truly amazing. That allowed operating profit growth to be over 80%. Then the company is a consistent retirer of its own shares and bought back over 20% of its shares over that period of time. At the same time, while the business results were great, the market finally came around to recognizing that. And because the company was so good, had such a great management team, the multiple that we bought nearly eight years ago was 20x earnings. The market very recently was pricing in earnings at about 32x, an earnings multiple about 32x, which we think was more reflective. And therefore, when we looked at the returns of Hilton, we thought there may be better opportunities that we were seeing in order to allocate our capital and sold our remaining position, which we had already been trimming over the last couple of years. As you can see here, we bought in an average share price of $73. The first bullet on the page shows how we actually increased our position by nearly a third at lower prices when COVID happened and we realized our large hedging gains. Then we've been able to sell at increasingly high prices over time, but a very phenomenal investment that yielded more than 317% or 4x our purchase price over the life of the investment. A couple of other exited investments before we go to Q&A. Canadian Pacific, that was one where there were just very, very modest results. Our view was that the merger with Kansas City Southern was going to create enormous synergies. We felt very good about the management's ability to put together two railroads and create a lot of operating potential. However, we got very delayed. The review for the regulators slowed us down by more than a year. A lot of the synergies that were achieved, the macro environment weakened for some of their core industrial and consumer businesses, which offset some of that. As a result, earnings per share, while growing at a 6% rate, really didn't achieve our expectations, which were much higher than that. We felt that situation may not change in the future. Therefore, there wasn't enough upside in CP. We made a little bit of money on that but decided to reallocate to other opportunities. As I mentioned, Nike was just a mistake. As much as we try to get them all right, we certainly are still not at 100%. With Nike, I think we did not understand how much the prior CEO had really damaged the business and how heavy the turnaround was going to be. Ultimately, our estimates for earnings per share kind of through the year and a half we owned it continued to come down. I think we ultimately decided that the turnaround would take a lot longer. And we didn't have as much confidence that it would ultimately achieve the high levels that we had initially thought. And so we decided that the range of outcomes was a little too high and that this was also one where we should move on and focus on other capital. So as you can see on the share price, CP over the life of the investment made about 8%. And Nike was an investment that we lost about 30% on over our year and a half of ownership. So with that, I think we will get ready to start the Q&A. Bill should be joining us virtually in just a second. While he's joining, I'll go ahead and say kind of the process. I think we have three or four microphones floating around the room. So if you want to take a microphone, they'll hand you one if you raise your hand. And then before you ask your question, if you would be able to just identify yourself. And then I'll call on people. And we're going to have a lot of participation from the investment team as well so that you all can get a chance to hear from them. Can I be seen? Yes. Good to see you. Apologies to all for not being there in person. It's a very challenging time for my family. A family member's had a stroke and it happened late last week. They need real familial involvement in order to maximize their care. Otherwise, I wouldn't be there. I'm sure I also thought it was a great opportunity for Ryan to represent the firm. But I welcome your questions. Thank you. Great. So who would like to ask the first question? When you have a microphone, go ahead and stand. Please identify yourself. Hiya. I'm Angelista from Lazard. Could you say a few words around participation in much larger-cap companies that you said has been a bit of a pivot? Does that mean less engagement? Does it mean a less active role for Pershing Square versus taking larger stakes in smaller companies as you have in the past? Sure. Bill, would you like to take the first one since we haven't heard from you? Sure. What I would say is we've always been an investor in large-cap and mega-cap companies. That's really been our space. I would say what's different a bit, certainly in the last couple of years, is the addition of the true mega-caps, which have always been, I would say, out of our reach from a valuation perspective. And what's made them interesting in the last period is we've had each of them kind of a moment. In the case of Google or Alphabet, we had the launch of ChatGPT, which led to a dramatic decline in the share price. And we were able to buy a company we've followed for years at a very attractive valuation. Amazon, a business we have admired and loved over a very long period of time. And then we had Liberation Day on Tariff Day, but we might want to call it. Amazon went to kind of a crazily cheap sort of valuation. And something quite similar for Facebook. So the businesses we've admired, we've wanted to own, never cheap enough to meet our kind of thresholds. I think what's changed is I think the market dynamic has changed in a pretty meaningful way. You have, one, this drumbeat of ownership, if you will, by index funds. So more and more, the float is being held by permanent owners. People don't think of index funds as taking stock out of the float. But I think it's really the right way to think about it. When you take more and more stock out of the float, it means the marginal buyer and seller of a security will move it more. I think we've also seen an increasing amount of capital being allocated to the so-called pod shops, Millennium, Jane Street, others, quantitative investors, investors that respond very rapidly to news events. I think the combination of that, the very short-term nature of that capital, the incentives of the various pods, the risk limits, as they kind of refer to them, has led to an environment where you can have a massive company change, surprise people with a CapEx number or with a guidance change. You could see a massive decline in the stock price. That, I would say, was unprecedented five years ago. A company with a trillion-dollar market cap, it's not typically going to move 25% or 30% on something other than the most extraordinary outcome. Here, you're seeing massive adjustments. The benefit of permanent capital is and also a long-term horizon. The way that we think and compensate the organization is we focus on intrinsic business value. Once there is a wide gap between the price we can buy a company for and where it trades, that creates an opportunity for us. We don't have to own something with the expectation that that discount resolves itself by 12/31 or by the end of the quarter. That allows us to take this concept of time arbitrage, that is a real thing. We have investors in the marketplace increasingly requiring an outcome being resolved in a very short period of time and fewer investors who can take a three, four, five-year kind of horizon. I think that's really an opportunity for us. But it explains why today we own Alphabet and Amazon and Facebook. If I could add, I think one of the additional benefits, which Bill said, which is important to double-click on, is being able to buy some of the largest companies that they're offered for sale for all the reasons Bill talked about. We can buy them much more quickly. All else equal, if I had the same company and it has a $4 trillion market cap, it's great because I might be able to buy an entire position in one day versus if it had a $40 billion market cap, I can buy it quickly, but it could still take me at least several weeks. It's real advantageous to be able to move at just the right time. And by the way, the mispricings don't last long, right? Amazon was at an extraordinary price. We took advantage of it in hours. And the same thing, Facebook. You look at how much the stock has moved since we've purchased it. But I think it is a very favorable environment. Now, for investors, I think it can be a more uncomfortable environment because you're going to see, volatility is not something everyone's comfortable with. And also, I think for money managers, it's not ideal if your investors can redeem their capital that day, like a typical mutual fund or hedge fund at the end of the quarter. But if you're insulated from the short-term capital flows of your investors, you can be a much better investor. Great. Take a next question everyone has on the mic. Please stand up so I can see you. Thank you. Mark Parsington, private investor. I wonder if you can talk a little bit about the attractiveness of the reinsurance and insurance segment and why you're pivoting to that. The last four years, rates have been extremely strong. But if I look at what's happening in the London market at the moment, across all lines, rates are down 15%-20%. So optically, it would seem like, anyway, an interesting move. Maybe that would be a great one for Bharath to answer. He's been working very hard on the Vantage transaction with us. Sure. And your question really pertains to our Vantage acquisition, right? Vantage is a leading specialty insurer and reinsurer. One of the aspects of the business that really attracted us to it was that it was really well-diversified. They have about two dozen different lines of business. And no single line of business represents more than 15% of premium certain. Notably, they actually do not have any sort of meaningful property and catastrophe reinsurance exposure, which tends to cause a lot of the volatility you see in insurance businesses. One of the advantages of being diversified, right, is if you're familiar with the insurance industry, different lines of businesses can operate in different pricing environments where if there's an attractive line of business in a certain market, having a diversified platform lets you really scale up your business in that line versus pulling back from another market where pricing isn't as attractive. Vantage, also by virtue of being a part of Howard Hughes' holding company, also gets additional capital support and the flexibility and air cover to really scale up their underwriting capacity to play the insurance cycle more effectively, right? That's something that a standalone publicly traded insurer doesn't necessarily have that same flexibility because they're tied to premium growth targets at the expense of underwriting profitability. Kind of the diversified nature of the platform plus the holding company structure really allows Vantage to be very opportunistic in playing the insurance cycle. Yeah. If I can add to what Bharath just said, the acquisition of Vantage by Howard Hughes, number one, we're taking a very long-term view here. We're not making a bet on pricing and insurance over the next couple of years. But the second point I would make is probably approaching 80% of the value of Vantage over time will come from how we manage the assets, certainly 70%-80%, something along those lines. So running a profitable insurer will enhance the return on equity of that company. But the way we intend to deploy the assets of the insurer and again, I did not hear Ryan's presentation on Howard Hughes. But our expectation is we take the float, we invest in short-term treasuries, we invest a substantial majority of the surplus of the equity of the insurer in common stocks over time. That's an approach that Berkshire took over time. We're not charging Vantage, the Vantage subsidiary, any costs for their asset management, which will give it a real competitive advantage. So they get sort of Pershing Square investment management for free. And the combination of making money on both the asset and liability side of the balance sheet is going to be, we believe, over the long term, enable that company to compound its equity at a very attractive rate over the long term. Great. Thank you for the question. Next. Hi. Joachim Hams from Germany, private investor. First of all, Bill, thanks for dialing in despite the situation. And Ryan, thank you for running the show. So I have also a question to Howard Hughes. How would you or what would you recommend to your partners and investors with regards to the exposure and balancing if you own shares in Howard Hughes, which I do at the moment, but also in PSH shares? Where would you expect the relative value creation to be the highest for the next, let's say, 5 to 10 years? Thank you. I think the answer to that is I don't know that it's knowable. But I would say our return expectations are similar. We generally don't like to deploy capital in something unless we think we can earn a 20% return over the long term. I would say our ambition for Howard Hughes is similar to that of Pershing Square. Now, Howard Hughes comes without a promote, if you will. So it has a competitive advantage versus Pershing Square Holdings where we charge an incentive fee, an incentive fee that will come down over time as we launch new investment funds. I'm sure Ryan or Rupert's probably touched on that. But I do think we like Howard Hughes a lot. We are not permitted to buy more stock. We're capped at 47%. I don't like to be in the position of recommending stocks. But I'd give this one a hard look. Let's put it that way. I mean, we bought a 15% stake in the company. We paid $100 a share. It gave us, you could argue, effective control of the company with 47%. We had to buy in a block. We could not have purchased that stake in the open market. The stock was $66 at the time. We don't pay 100 if we think something's worth $80. So our view is the intrinsic value of Howard Hughes' real estate, something approaching $120 a share. The stock has been, I would say, orphaned in a sense. It's a pure-play real estate company that is structured as a C corporation as opposed to a REIT. It doesn't pay a dividend. It owns a large amount of land. It's in multiple property types in multiple jurisdictions. It does a lot of construction. It doesn't fit the model for a conventional apartment REIT, for example. And so it never really attracted a loyal Wall Street, if you will, following or an understanding among the investment community. And I think there were also the market basically assigned a discount rate to those activities that was either higher or equal to what that business is going to earn. What we're doing with Howard Hughes is not dissimilar to what we've done with Chipotle. We have a company that's underperformed. And Chipotle was more of a business error. In this case, we've had a stock price that sort of underperformed its potential. How do we fix it while we're making changes to governance? We've added some directors to the board, a bunch of new directors, making changes to management. And we're making changes to the strategy of the company. The only real difference here is that we sort of instead of bringing in Brian Niccol, we brought in myself and Ryan and the rest of the Pershing Square team that we made available to the company. And we've done it in a way, I think, that's quite favorable to Pershing Square Holdings, which is we're not charging we're not getting paid salaries or bonuses or stock options. We're getting paid a base management fee and a variable management fee. But we're crediting we're reducing the management fees we charge the Pershing Square Holdings shareholders by the dollar for dollar for what we get from Howard Hughes. There's no incremental look-through cost to the Pershing Square Holdings shareholder. But there's a very important look-through benefit in that we believe that we can grow Howard Hughes. Howard Hughes can earn a much higher return on capital under this new strategy. Wall Street will assign a lower cost of capital to the business. One evidence of that is the company just issued debt at the tightest spreads it has ever issued debt by, I think, something like over 100 basis points. The cost of debt is going down. The stock price is up about 20% since we made this announcement and changed the business. So it's really, in some ways, a classic Pershing Square investment with a little bit of a tweak and a little deeper involvement from us. Yeah. Great. Thank you. Tony, I know we have online questions as well. Should we take one from there? Sure. I want to make sure my mic is on. We've got two questions. The first follows on Howard Hughes and asks, while the ongoings at Howard Hughes are exciting, but with it being perceived as your Berkshire Hathaway, how can Pershing investors gain assurance that you and Ryan and the team won't be spread too thin across both entities? Sure. I think what's very straightforward about that question is the business plan for Howard Hughes is to close on our acquisition of Vantage. And then we're going to manage the assets of Vantage. And the vast majority of the cash flow that Howard Hughes is going to generate will go to buy back the Pershing Square Holdings preferred, an investment we think is quite actually an interesting one for Pershing Square Holdings. But it's really just like today, we manage three investment funds, Pershing Square Holdings and plus kind of remnants of our historic hedge fund business, Pershing Square LP, Pershing Square International. Now, we'll just have a fourth portfolio that will look pretty similar, frankly, to those other three. So it's just allocating capital the way we do today, generally pro rata among the different funds. There'll be some differences in terms of maybe because of insurance regulation. Over time, as the real estate business generates more cash, as the company grows, we'll buy the occasional operating business. The team now enhanced. We grew the investment team by 12.5% in February by adding a professional. So we're up to nine. A nine-person investment team managing a dozen-stock portfolio, I would say we have enormous headroom in terms of capacity. And we use that capacity to look for investments. We also receive a lot of private deal flow that we don't act on. So I would say no one's burning the midnight oil at Pershing Square, that people work hard. We spend a lot of time looking for new investments. But we were very intentional about the business plan for Howard Hughes to make it one that is not in any way a distraction to Pershing Square. Great. If I could add to that, I would say I think to double-click on Bill's point, a lot of what we're doing at Howard Hughes, we've already kind of the work, it's the same work we've been doing. A lot of Vantage's value, as Bill mentioned, would be in the investment portfolio, which will be invested very similar to PSH. A lot of the macroeconomic hedging are things that we're already doing for the core portfolio. One thing I think that really brings us home to me in particular is when Bharath and I were doing a lot of study on Vantage, a lot of that original knowledge for how we decided that insurance should be the first business came from our study of Berkshire Hathaway, which we have previously owned and have done a lot of work on. It was one of the big companies that's been in our library for a long time. At the same time, as we were doing work on Vantage, the best single way to get up to speed on a startup insurer that's only been around for a little over five years is to actually go look at all of the large publicly traded insurers. And so Bharath and I were able to do a study. And we added a whole new set of companies to our watchlist or our library that we hadn't followed nearly as carefully before. And so I think there actually are, as we mentioned in the presentation, a lot of synergies, if you will, to the core investments in PSH because we now have another sector where we feel very confident that we think if there's an opportunity there, we'd be able to spot it. One more question from our online viewers. Can you comment on why the book has remained largely unhedged for some time despite recent market volatility and uncertainty about AI-related risks to overall market valuations? Sure. Bharath, do you want to take that one? Sure. So the key to our hedging strategy, our asymmetric hedging strategy, really has two components, right? One component of our process is just keeping a close eye on the economy, how various emerging risks are shaping up, and finding mispricings in the market where our variant view doesn't align with what's being priced in the market. The second step to our asymmetric process, right, is then taking that view and trying to identify asymmetric hedge opportunities where we're usually deploying a small amount of upfront premium. And if the risks that we're worried about do play out, we can generate large multiples of capital that provide us liquidity to deploy into our portfolio of stocks at the precise moment when they're cheap. And if the risks don't play out, you minimize your downside to the portfolio to the premium that you invested. I think over the course of the last year, we've been closely following the economy and kind of keeping abreast of different potential emergent risks. I think where we've not been able to we haven't necessarily been able to prospect for asymmetric hedging opportunities to necessarily take advantage of those views. But it's something that Sonal, Ryan, and I are spending every day trying to identify. I think the way I would describe. Sorry, go ahead, Bill. Yeah. I was just going to add. So let's talk about what we do and what we don't do. We don't attempt to hedge market volatility at all. What we're not trying to do for Pershing Square Holdings shareholders is deliver a smooth outcome. What we're trying to hedge is risk. And we define risk as something that could cause a permanent impairment of the value of businesses we own. That's why we hedged the financial crisis because we were concerned that we could have one, right? That's why we built a big hedge in front of COVID because we thought a global economic shutdown could actually have a very significant impact on markets. And then with rates, we thought if the Fed were forced to raise rates aggressively, that would lead very negative for equity prices. So either hedging is protecting from permanent loss of capital or also sort of stepping out in front of a massive negative market move that creates the benefit of our liquidity for us in that sort of down market environment. And we did not identify, I would say, a black swan risk in the last meaningful period of time. There are lots of risks in the world. Beyond the black swan risk, occasionally, we find interesting things to do in the macro land. If we think that 30-year Treasury is mispriced, we think oil is too cheap, too expensive, or and again, we also have to find an instrument where the payoff is large enough relative to the capital invested for it to justify the investment. And we'll do nothing for a long period of time, even years, if there's nothing to do. I would say the reason why we've been able to do this very effectively, and it's been a major net positive for the firm, is we're not trying to do something every day. It's a bit like catastrophe reinsurance. We're buying it. But we only buy it when we think there's an earthquake coming. Yeah. We are doing the work every day, as Bharath mentioned. But we don't have any pressure to be deploying capital until we think we get those unique opportunities that Bill mentioned. And so the way I would think about the strategy is if we're able to do one or two of these a year, that's a great year for us. We may go periods of time, years, where we're not doing anything because we don't see the opportunities. But the actual work to identify is happening every day. And the conversations of whether we should invest or not are happening every single day. Maybe take some more from the audience. Maybe on this side of the room. If we could get a mic over here, please. Thank you, Bill. Dr. Ahmed Beydoun, Beydoun Capital, Beydoun Family Office. Just going back on your exits, Nike and Chipotle, before I ask the question, I must just admit that I like the Howard Hughes type of mustache that you're growing. But anyway, what is your trigger point on exiting Nike and Chipotle where you think this is the time when we pull the trigger, given the fact that U.S. millennials are growing and they're going to be more users of both fast food and Nike moving forward? Thank you. Maybe we can have Anthony take that one because he has worked as an important team member on both of those investments. Sure. Thanks, Ryan. So I think the two situations are unique. So just looking at Chipotle first, we still believe Chipotle is an amazing business and brand. They have a long growth runway ahead of them, 8%-10% restaurant growth in the U.S. in terms of new stores. They should be able to grow same-store sales at a nice rate over time. And there's nice operating leverage that comes along with both of those. The issue we ran into there was really, frankly, after Brian left in the summer of 2024, we had heard great things about Scott over time, both from Brian and also through our board members when we had representatives on Chipotle's board. And some people struggle making the transition from an operating role to CEO. It's different, right? And I think there's been some struggles there. There's been some departures from his executive team. There's also been headwinds that have hit at probably a coincidental time in terms of the headwinds because you do see slowdowns in competitor brands that are also well-positioned with those younger consumers, the Cavas, the Sweetgreens of the world, et cetera. So it's really a situation where there's an unproven new CEO who has to deal with a little bit of a perfect storm of macro headwinds in his industry and not able to rise to the occasion yet. He might figure it out. But I think given the wide range of potential outcomes, lack of clarity around when those headwinds will abate, and frankly, lack of clarity around the strategy of the company in terms of responding to those headwinds, it seems a little bit that they're throwing everything at the wall to see what sticks right now. We just thought the range of outcomes is too wide. It's certainly something we can revisit again in the future. Nike, as Ryan mentioned, was a mistake in terms of we bought it and paid too much for the company in light of the damage that prior management had inflicted. We do have a very favorable view of the new CEO. I have a ton of confidence personally that he's going to restore Nike back to greatness. Unfortunately, there, I think that the competitive and macro environment for that industry has changed, we think, for the worse. So I think our confidence prior to making the investment in a return to kind of historical average margin levels and kind of the 13%-14% range was impaired by two factors. One is the more fragmented brand landscape today in athletic footwear. The second one is tariffs, which we think are here to stay for the foreseeable future. Yeah. I would add more broadly to your question about why do we sell anything. There's really three reasons. One is we just sell when we think we got it wrong. I think what's key about that discipline is we monitor investments nearly continuously. But certainly, every quarter, we really try to say, how do we think about the next three to five years more mathematically? And how has that changed from what we thought before? And we have discussions about them. I think after enough things happen where you look back over a period of time and you say to yourself and your teammates, "I actually thought this was going to be the outcome. We actually looked pretty far from that. It's a pretty good discipline to start, then thinking about, "What did I get wrong?" A lot of times, that causes you to start asking questions about the business that you may not have otherwise asked when you start seeing how different things have played out than you thought. And oftentimes, we'll say to ourselves, "Look, if we've been wrong in an investment to a certain degree, perhaps the right answer is let's sell it so we have no attachment to that investment by any means, reunderwrite the entire thing. And then if we like it and we find out that we have a lot more conviction, let's buy it back." That's not the case every time a stock goes down or every time they miss earnings. Over a longer period of time, which I would describe for both of these investments, we think that's a really healthy discipline. The other reason we sell things, which was a little bit of a factor here, is also we're trying to figure out if something is ultimately overvalued or not. That was not a factor directly here. The third reason is, which is if we think there are other opportunities that yield a lot higher return with less risk, we would just swap something. We may like something. That's where I think we talk about the range of outcomes. We felt like we could find higher-returning investments that didn't have as much risk where we thought we were more likely to be right. That made a decision pretty easy, particularly in the. The name is Stephen Rigdon. I'm a private investor. The question is really directed at the independent directors. As I understand it, Pershing Square Holdings have taken a preference share in Howard Hughes. The investment company has taken full equity. Did they think there was a conflict there between the two parties? Why were they happy that that went ahead? Sure. Rupert, you can get a microphone for us. Or are you still mic'd up? Is my mic turned on? No. No? No? I have a microphone. Yeah. There we go. There's that. So I think this is a very interesting question. And obviously, when we look at a project like this, we're looking at it in two perspectives. First of all, what is good for our shareholding in Howard Hughes? What's going to create the most value? And here, we believe the manager has a fantastic proposition for the business. And the acquisition advantage is going to make a real big difference to it. And then second, as you say, what's in it for us in the very narrow perspective of that particular instrument? And so we did look at it very, very carefully. And hence, that's why we had seven board meetings and not four last year, is because the independent directors got together. We got professional advice. And we looked very carefully at the terms of those. I'd say we did discuss them. Bill was very involved in those discussions on the other side of the fence in that. We made sure that we protected the interests of the business of Pershing Square Holdings, got ourselves a great deal, and at the same time, made sure that the transaction could go ahead. Sounds good. If I could add to Rupert's points here. So this is kind of a unique experience for us in that we were actually on the outside of the fence on both Pershing Square Holdings and Howard Hughes Holdings. So Howard Hughes Holdings had to create a special committee because Pershing Square is an affiliate. And this transaction was an affiliate transaction. Pershing Square Holdings had to have the independent directors evaluate the transaction because, again, we were an affiliate of Howard Hughes Holdings. And I'm becoming executive chair of the board of the company. What's helpful here is it's actually not if you look at the terms of the preferred, it's nominally a preferred instrument. But the preferred instrument is redeemable. If it's not redeemed by the way, the preferred instrument will perform with the performance of the equity advantage. It's really a common equity security advantage that we've given Howard Hughes the option to acquire from us at a premium price to the price that we're paying for the company. If Howard Hughes does not reacquire that security, Pershing Square Holdings has the right to convert the preferred into the common stock of Vantage at cost. And we also have registration rights. And so it's economically an investment in the Vantage insurance subsidiary via Howard Hughes. We've given Howard Hughes a finite period of time to redeem the instrument. So this sounds a little complicated. But the reality is this is an investment that enabled Howard Hughes to make this acquisition, which we think will be transformative to Howard Hughes. Pershing Square Holdings owns 32% of Howard Hughes. So we'll therefore be obviously a big beneficiary if we're correct in meaningfully increasing the value of the company. We haven't finalized the dollar amount yet. The maximum is $1 billion. I think the more likely outcome is it's a smaller number, more like $600 million or $700 million. That will be finalized depending upon Howard Hughes ends up financing the transaction sometime in June. So actually, in reality, Pershing Square Holdings will own probably about the same amount of preferred as it owns of Howard Hughes. So in some sense, it will be indifferent initially of the economic terms. And then as the preferred is redeemed, Pershing Square Holdings will care more about the Howard Hughes stock relative to the preferred. So it's an affiliate transaction. It requires very thoughtful, careful review by both boards. And one of the challenges we had is we were sort of in the middle. We wanted the transaction to happen. We wanted Howard Hughes to be satisfied with the terms. We wanted Pershing Square Holdings to be satisfied with the terms. But the terms couldn't be too much in either direction where the transaction wouldn't happen. And that would be bad for Howard Hughes. And therefore, it would be bad for Pershing Square Holdings because of our 32% ownership in the company. So interesting dynamic. I credit the board with handling this very appropriately. They hired a well-regarded Rothschild. We had to spend some money on getting an opinion. But ultimately, good judgment, some professional advice, really on both sides. Both sides had independent advisors, independent lawyers. And we got to a middle ground, acceptable transaction. And I think we're going to be very pleased with the outcome. Great. Could we take a question from this side of the room? Harry Lloyd Owen from Consulta. Firstly, Bill, just wishing you and your family all the very best. The presentation today was in excellent hands. Thank you, Ryan. My question is, both of you referred to the opportunity that's presented by these new hyperscalers and the CapEx numbers being much larger than expected. But you didn't go into much detail about why you did think they were actually a good thing that they were higher than expected. What's your overall opinion that differs from, I would say, the consensus market reaction to these higher-than-expected CapEx numbers? Sure. No, it's a great question. I would say at a very high level, the way that we think about it is I wouldn't say that every company that's going to spend a lot of money on AI I would be supportive of. I think we believe that if you are already an industry leader so for example, take Amazon or take Meta or Google even. If you have the distribution, if you have the data, if you already have a large degree of competitive moats, we believe that AI is going to be a transformative technology over time. And we think that these businesses have a unique moment right now to further widen their moats from either potential future competitors or to just simply improve the overall products. And this has happened at a time Amazon's the perfect example. Google has said something similarly and others in the space as well that they actually are supply constrained. We believe that the demand for these products today, which is likely going to grow in the future, significantly outstrips the amount of capacity they have. What a lot of these hyperscalers are spending money on is physically trying to build more infrastructure so they can serve all the demand that they need today. They actually think they can do that profitably just on the demand today. But we also think that the demand over time is going to be even greater than that. They need to be making investments in that as well. For a business where you already have strong potential returns, where you already have a lot of high returns on capital, being able to put more money into those opportunities when other people can't the way I sort of think about it is Meta has an $80 billion cash position on its books that is larger than the vast majority of AI companies could hope for in the public market space. They have the ability just to take that cash and literally put it in next year. Google was in the market this week for issuing a 100-year bond, which I think hasn't been done in decades. These companies have a unique ability to fund CapEx that we think has a great opportunity to enhance their competitive position and meet demand that's not being met right now. So we think those things kind of work in a virtuous circle where the larger, more differentiated businesses have the opportunity to put in more capital. And that is going to further allow them to embed themselves with their customers. And they're doing it at a point in time when I think even in some of the private markets, but certainly smaller companies, it's getting harder for other companies to raise external capital. And these companies can basically finance it all themselves. So we think it's a really unique moment to differentiate yourself. And the long-term and existing demand is just off the charts right now. And there's not enough supply to deal with it. I could just add something I thought actually excellent answer. But I would add the following. If you own a stock in a company and they announce that maintenance CapEx is going to be twice what we thought it was going to be, i.e., the amount of money we need to spend to keep the trains running on time, is twice as much, the stock should go down a lot. If a company announces that business demand is so great that in order to meet the demand, they need to build more factories and we can earn very high returns on the product that we're shipping, you should applaud when they're doubling the amount of money that they're spending. And we think this is squarely in the growth CapEx category as opposed to the maintenance CapEx category. Great. Thank you for the question. Yeah, maybe in the middle here. Hi. I'm Tom Owens, private investor. A very quick question from Fannie Mae and Freddie Mac, if that's all right. Obviously, it's been a very long holding time. Last year was exceptionally good in terms of returns for Pershing Square Holdings. Obviously, we saw the headlines of Trump potentially mandating financial by $200 billion of MBS. That's obviously seemingly what triggered the sell-off in the share prices this year. So it does give the impression that what you want may not happen. And my question to you is, why did you not sell last year when you'd made such a good return on what has been a very long-term holding? Sure. Well, I think it's a very good question. Interestingly, I think we have a little bit of a different perspective on what's going on. And we actually are quite like the $200 billion of MBS purchases. But maybe if I could, Anthony could answer the question. Yeah. Thanks for the question. Look, I think in terms of why we didn't sell last year, we put out a presentation in November talking about our current thinking on what we think should happen with the companies. I'd encourage you to read it. It's a very simple and straightforward plan. And the beauty of it is it can be executed overnight by Treasury Secretary Bessent and FHFA Director Bill Pulte with the approval of the president. So the stocks are trading at their peak in the mid-teens. Under this plan, we think they can trade very quickly up to potentially $40 a share. That's not something you want to exit. So we didn't find it compelling to exit at the time. Year to date, the decline, I wouldn't attribute it solely to the $200 billion MBS announcement. That announcement, interestingly, it will enhance the near and medium-term earnings of the enterprises because buying MBS and funding that with corporate debt is a very profitable, high-return on equity business for them. So that should enhance their earnings power materially and help them recapitalize faster. I think that the sell-off year to date, I would attribute to market fears that President Trump has perhaps focused elsewhere. He's got a lot on his plate foreign policy-wise. And domestically, you do have the midterm elections coming up. So I think it's really kind of some jitters around focus, which, again, we think are misplaced because the beauty of the plan that we outlined is that it doesn't take any work on Trump's part to execute it. So we still believe that plan can be executed quickly. And we're confident that the president sees the value in it. Great. Maybe on this side. Thank you, Giovanni, from Italy. I'm a private investor as well. I was wondering if you could comment on the new artist contract structure at UMG and if you think that there's going to be a deterioration in the economics of the business due to artists essentially retaining ownership of the rights and then licensing those back to the company. If you have any comment as well on the basically flattish to declining gross margin at the company. Thank you. Great. Thank you for coming. Thank you for your question. Feroz, would you like to handle that one? Sure. Thank you for the question. I help oversee our investment in UMG. So to your question about artists having more power vis-à-vis labels, that's really not a new phenomenon. If you go back decades, artists like Prince were "complaining" about the unfair treatment of artists vis-à-vis what the labels get. And I think fundamentally what that view betrays is this idea that the artists and repertoire function of the labels is really a venture capital business. You're making big bets that often will work out heroically and ones that won't. And what you see is the cumulative impact of their business. What's also notable is that over time, the catalog, which many of these rights actually sit at the labels, either at the recorded music function or the publishing function, are owned by the labels and publishers. Listening of the catalog now represents over 70% of listening in developed markets like the US. And so what you're really talking about is the new frontline artists on the margin, folks like Drake or Taylor Swift that are truly exceptional that may be able to perhaps negotiate better rates for themselves. And that's not really new. And so UMG's P&L already reflects that. What we think is fascinating is that there's really a trend in more content being created, even pre-AI and especially now post-AI. There's about 100 million songs that get uploaded to DSPs every year. In an environment like that, we think the labels' value add is even more important because guess what? You're going to have to if you really want to go global, you're going to want to stand out. And there's really one way to do so. And that's really the labels. And so I think their competitive position gets stronger. And then to answer the second part of your question about the gross margins decline, or rather the stagnant gross margins, that's really due to the mix shift that's occurring in the business. So if you look at the business it's not well-reported this way. But if you go back to our presentation that we outlined about four years ago, the streaming portion of the business is much, much higher gross margin. And that happens to be the fastest growth margin, fastest growth business over time. And so naturally, gross margins should inflect upwards. But what's happening is that some of the lower gross margin streams, namely physical, which is really seeing a renaissance and has become a profitable business for the company, as well as publishing, which overall has a lower gross margin just given the cost of goods sold dynamic there, as well as some of the distribution-type businesses in streaming are growing a little bit faster. And so that's why on an optical basis, the overall enterprise-level gross margins of UMG look flat to declining. But if you look at the underlying streams, we really do think gross margins should be inflecting upwards really because of streaming growing faster. And I think the company could definitely be doing a better job of talking about it. One of their primary peers, Warner, does sort of give investors guidance on, "Think about this revenue stream as this percent gross margin and this one at that gross margin. Yeah. Thank you for the question. I think just one quick add-on. A lot of people are concerned about the things that you mentioned. I think one thing that's interesting that's not widely understood is the dynamic we're talking about probably applies to a few dozen artists. And that could be artists who are not with UMG, could be with others. But interestingly, only the largest single artist for UMG is less than 1% of the revenue. I think there's a common perception that if, oh, for example, Drake has better economics than everybody else and he's probably one of the few artists that could really do that, that this is going to have some very large impact on the business. But the business is way more diversified amongst artists than I think is commonly perceived. That in and of itself, although I think I agree with everything Feroz mentioned, that's an additional layer of hedge that I think is not well understood in the business model. Great. Over here. Yeah. Thank you. Thank you for the presentation. My name is David. And I'm a private investor. I went to a presentation, I think it was either three or four years ago, where Lucian Grainge was speaking. And I think he was compared to Walt Disney, probably by Bill. So I'm just interested, when you look at that investment over the last three years, I think when the presentation was given, it was very, very bullish. Do people think that now because it's not one of the top performers in Pershing Holdings? Sure. Maybe I can start. And then Feroz or Bill can jump in. I think we have enormous respect for Lucian, the CEO of UMG. I don't remember who made the comparison. But you're probably right. That does sound like it's possible. Actually, I think I gave a few different examples of iconic leaders. I mentioned Steve Jobs. I mentioned Walt Disney. And I forgot who the third was. But I gave examples of people who completely really dominate an industry. And Lucian is really the man in all things music. But go ahead, Ryan. Yeah. I think that's very true. I mean, what Lucian has done in the industry, if you talk to anybody who's there, people have enormous respect for what he's created, both at UMG but more broadly across the industry. He has been a transformational figure. I'd say one of the differences is certainly Steve Jobs over time and Walt Disney created a lot more value over a much longer run for their shareholders. We have been very disappointed with how UMG's share price has worked. When we typically look at an investment, as I mentioned earlier when I was talking about the stock market, we try to disaggregate how a business is actually doing, meaning how are the earnings per share and our estimate of growth over time? How does that look? Then we compare that to the stock price. The difference between those two is generally the multiple of earnings that investors assign to this business. UMG's earnings have actually been very good, very consistently over really the life of the business as a public company, which has been just under four years. They have grown their revenues at a high single-digit, about 10% rate, 9%-10%. They've actually increased their profit margins overall. Now, to Feroz's point, not as much as we would like. We think there are some competitors out there who are much smaller that have shown more progress. So that's an opportunity for them in the future. But they've actually still increased their profit margins. Their overall earnings growth profile has actually been quite good and in some ways outperformed what we thought when we made those statements a few years ago about the business. What's not worked out has been the multiple that investors assign to the business has declined dramatically. At one point throughout our holding period, the business was trading between 25-27x earnings. There's been some volatility. I think investors at that time more appropriately started to value what we think is the high-quality nature of their business model and the prospective opportunity for growth. As I mentioned, if you recall this chart, really since last summer is when we have seen a dramatic decline in the multiple where, as I mentioned, we monetized some shares about 30% higher, more than 30% higher from the current levels of a large portion of our position. The stock at that time was maybe trading at 25-26x earnings. Today, though, the earnings are greater. Yet the stock is now trading at something 18 times or even if you exclude the value of its Spotify stake, 17 times. And we think that's really due to the two technical factors that we talked about before, which is the largest shareholder in the company is perceived as being potentially a very large seller. So that makes it a hard thing for people to want to buy stock ahead of that because forced sellers generally sell at large discounts to the market price. And then the U.S. IPO, which we think will enhance the investor base, will really, I think, put UMG on the map in a more appropriate way. Obviously, we'd observed Walt Disney and Steve Jobs happen to be U.S.-based companies in California that happen to be listed on the New York Stock Exchange. It's part of the S&P 500. So that's an opportunity for Lucian and UMG. But that's also been delayed. And so I think that there are some technical reasons why the shares have disappointed us and are trading what we think are incredibly low multiples. But the business performance has actually been quite strong, all things considered. Let me maybe be even a little more direct than Ryan. So we bought the stock for about 18, a little over €18, September of 2021. And we put together actually, at the time, you can look up our presentation still online. And we projected how the kind of operating income and the revenues of the business would grow over time. And the companies exceeded our expectations over that period of time. For a business of this quality, we would expect it to trade at a much higher valuation. The companies massively underperformed, particularly in the last since the summer of last year. The valuations come in very, very meaningfully. Yes, the technical factors that Ryan has identified contribute meaningfully. But fundamentally, this is an issue that the company itself is capable of resolving, right? Universal has been criticized by shareholders for not having a capital allocation program or algorithm where they explain what they're doing with all the cash the business generated. What effectively has happened to the company over time is it's delevered. The business value has grown. The net leverage of the company has basically gone to zero if you net out the Spotify stake. So now let me compare Universal Music to Hilton. Hilton is a very different company but has very similar economic characteristics and being a relatively asset-light business model, very high-quality business. I would say it's got more economic cyclicality than Universal Music. The big difference is the company has been very, very thoughtful and aggressive about the way they've used the capital business that's generated. They've had very clear policies on maintaining kind of a consistent level of investment-grade leverage. They've taken their excess cash flow and returned it to shareholders principally through buying back stock. They've been providing tremendous transparency on a quarterly basis with their results. They've cultivated an analyst community and investors who are very appreciative of the steps they've taken. Universal has done a great job if it were a private company held by a wholly owned it was wholly owned by another corporation. They've not done a great job as a public company. We've tried to work with them to help them in that regard. We've been unsuccessful to date. And that's why the stock trades where it does. Yes, there's the perception of a large seller. But you have a company that is effectively unlevered that has the capacity to repurchase a meaningful amount of stock, could resolve the overhang in a way, and could do a better job in the way they communicate with shareholders. So we have enormous respect for Lucian and the team in terms of how they run a music business. But they need to learn more in terms of how they run a public company. Yeah. I think Steve Jobs hated buying back stock and once famously said that buybacks were dumb. So maybe the comparisons were more apt than we realized. Question here in front of the center, please. By the way, let me ask, that's a prudent thing to do. Nor does it have the prospect of being able to take large amounts of cash and spend it on assets in the industry because of the company's dominant market position. That's what creates the puzzle in the mind of shareholders as to why the company has not been more thoughtful or more sensible in how they've used their excess capital. Yeah. And interestingly, under Tim Cook's leadership of Apple, I think they actually buy back more stock than any other company in the S&P 500 on a dollar basis. And it's been one of the amazing things, if you go back over the last decade, that has really helped improve Apple's valuation from at one time, what was actually below 10x earnings, I believe, in 2012 or 2013 to now being one, on that list we showed of the top 10 companies, it's one of the highest multiple companies, around 30x earnings. So buybacks do matter. Buybacks aren't. It's not magic, right? Our first advice for every company we're involved in is to take whatever amount of capital they need that they need to invest in their business, to improve their business, to enhance their competitiveness, to grow their business more effectively. They should use that capital in their business. But to the extent there is capital they don't need, they can't use, they shouldn't just leave it sitting around on the balance sheet. And they should deploy it and return it to shareholders. Universal stock should operate. I mean, Hilton trades at 31-32 times earnings. Universal trades at 17. And you can make some arguments that Universal is a better business than Hilton. So there you go. I finally have nothing further to add on the topic. All right. Question in the center, please. Yeah. Harshit Kotecha, private investor. My question is on LLMs. They seem to be disrupting many business sectors at the moment. What impact do you think PSH Holdings will have over the next few years with LLMs? So maybe I'll provide a high-level comment. And then maybe Bharath can talk through some specifics on some of the names that we own. I think it's a great question. And I think more broadly with AI because LLMs are a very important component of that. But there are some other applications as well. We do think it's going to be a transformational technology. And we do think that while there's this perception of risk, which clearly, if you've been looking at the markets over the last couple of weeks, has resulted in a dramatic decline of many companies in many spaces, I think that there's a lot of fear right now. And what's interesting is some of that fear is probably justified because there will be some businesses, particularly if you charge a high cost for your product, you are not that embedded in your customer's overall workflow. Maybe you have one product rather than a dozen that people rely upon. And you don't have the resources to have a counterresponse where you can make sufficient investments. So when the question was asked earlier about the hyperscaler CapEx, one of the reasons why we, in general, have found, particularly with the positions that we own, why that CapEx is so valuable is because they have the ability to widen the moat where we think they already charge relatively low-priced products. They have a lot of them in the hands of consumers. And they have the financial capacity to invest even more than some of the companies that are being perceived as the disruptors. But we think there's that fear. And we think that fear will ultimately play out with certain businesses. At the same time, though, we think that this could be a huge opportunity for certain businesses, particularly if you do charge a relatively low cost for your product and you have the hands of many, many people and deeply embedded in their workflows, and then you're able to make the necessary investments to create as good or better of a product with AI, we think it's an opportunity. But maybe, Bharath, you could talk more specifically about some of our holdings in that regard. Sure. To Ryan's point, whether AI and LLMs are enhancing or disruptive to a company's value proposition is sort of the central question we ask when we look at our portfolio holdings and whenever we look at any new investment we evaluate. I think our framework and this has really been validated by our investment in Google and seeing how that thesis has played out, is there's a certain checklist of competitive moats that a company can have where AI can be incredibly enhancing to their platform value, right? And it's some of the ones that Ryan mentioned, proprietary data, being deeply embedded, having sort of a unique distribution angle, and being kind of the dominant player in an industry where you can get significant leverage over your AI investments. So if you run that checklist sort of through our portfolio, right, in terms of proprietary data, Google and Meta have decades of consumer browsing history and consumer interest data. Amazon and Uber have incredible purchase history and ridership data. And AI just allows these companies to better mine through that data and gain insights that improve the value of their products. Similarly, on being embedded and having distribution, right, all four companies have apps that Google and Meta are on the scale of 3 billion-plus users where they occupy significant mind share, usually the first app that folks open. And similarly, Amazon and Uber, they operate on the scale of millions of users, which really gives them a very valuable distribution channel to deploy their AI innovations at scale. I would say these companies have also made significant technical and physical infrastructure investments to be able to actually serve these AI innovations at a sort of cost per token or at a price point that's incredibly hard to disrupt if you're a new frontier lab startup. I think these moats will become increasingly valuable over time as AI adoption grows. I mean, in the case of Meta and Google, I mean, nothing is better than free that's in the hands of 1 billion people plus. So that is a hard free is hard to disrupt, particularly when the product's so good. Ryan, can we take a few from online? This question is from shareholder Grant Worden. Many people have expressed concerns regarding Uber's insurance operations. There have been mentions of poor underwriting, severe litigation risk. Has the Pershing Square team looked into this? Great. Charles, would you like to take that one? Been waiting patiently for a question. So I actually think that's fairly, it's an incorrect construct on what Uber's doing. And some of that's outdated. It's actually a few years old. Today, what Uber's doing is they're primarily doing self-insurance for the Uber X product where there isn't existing commercial insurance. And it's a secondary layer of insurance when they're either driving to pick up a passenger or a passenger is actively in the vehicle above and beyond the private insurance that that driver may already have. If you think about Uber back to this point on data and insights, there's basically no one better place than them to understand how drivers are actually operating in real time, how hard they're braking, how fast they're accelerating, what their route is, how they're turning. They basically run this to be a break-even operation where they pass through the total cost of insurance to the underlying rider, which can actually be very significant in certain cities like New York, for instance, as much as 40% of your gross trip value is regulatory capture and insurance. California is another market, which is why pricing is so high in California. What they're doing is they're using this data to force the drivers to become better. They control pricing. They can determine the price you pay, which ensures that they're always in kind of a profit-neutral value proposition for the underlying insurance operation. They have $12 billion, roughly, of insurance liabilities on the balance sheet. They have $12 billion of securitized investments that they hold against that. This is not a profit-generating operation for them beyond the float income they receive, which is conservatively invested. They run it to be profit-neutral. Yeah. And so I just think, to double-click an important point there, Uber is not trying to make money by providing insurance. What it effectively is doing, whether it self-insures or it actually has to get insurance for the drivers, it's effectively passing through the cost of insurance to the ultimate riders. As you may know, one of the reasons that Uber's prices have increased over the last handful of years is because of inflation. And then, certainly, at least in the United States, there's been an increase in fraud in several of the key states in which Uber operates. Insurance rates across the board have gone up significantly. So Uber passes that along to the riders. And that's one of the reasons why ride prices have gone up a lot. It looks like, based on a lot of the industry data that we're looking at, even for businesses that are in the insurance space, that that's actually starting to come back down partially as inflation has come down and as there's been more competition in the space. So the benefit for Uber is, as insurance rates either grow less quickly or actually may turn over a little bit in certain cases, that would be passed through to the rider in terms of a lower cost per ride. And what Uber has seen over time in their own data is, as ride prices come down, people take even more of them. So we think, actually, they're not really making money on the actual insurance. Charles mentioned they do make some interest income when they self-insure. But we think, actually, it could be a benefit to the number of trips that people take over time as we get past what's been a pretty anomalous period since COVID in insurance rates. One more from online. What would be a great 10-year outcome for PSH? What would it look like in measurable terms such as NAV, company annual growth rate, average discount, distribution policy? What are the one or two decisions you expect will matter most in getting there? Maybe I'll take that one. So one, I would say we have an ambition of compounding the NAV at Pershing Square Holdings at a rate in excess of 20% net of fees over the very long term. That really will remain unchanged. I do expect the fees to come down. We are building over time. We expect Pershing Square to be managing more assets outside of Pershing Square Holdings. And Pershing Square Holdings gets an important benefit from that. When we launch a fund that only charges management fees, Pershing Square Holdings' incentive fees will drop by an amount equal to 20% of the new fund's management fees that we collect every year. If we launch a fund that charges an incentive fee, Pershing Square Holdings will get a reduction of incentive fees equal to 20% of those incentive fees. Our goal with respect to the fee structure of Pershing Square Holdings is to bring the incentive fees to zero over time as we launch other funds over the long term. So I think you can expect the current it's actually slightly less than 16% because there is some fee sharing that just started last year from the two small kind of remnants of our hedge fund business. But over time, I think you can expect the 16% to approach ideally zero over time. That's the goal on the fee side. So if the return ambitions haven't changed in terms of NAV growth on a growth basis and the fees come down, obviously, that should be helpful in terms of the performance of the company on an NAV basis. With respect to distribution policy, we do view Pershing Square Holdings as a growth company. We think we can quite confident we can deploy the capital very effectively. So we would ordinarily retain 100% of our capital. We did make a decision a number of years ago. We thought it would be helpful to investors. There's certain investors who can't or won't own a stock that doesn't pay a dividend. So we initiated a dividend. It's designed to be small. It's calculated as basically 1% of NAV determined on a weighted average basis for, I think, the last 20 trading days of the year. It's capped. It cannot increase by more than 25% over a three-year period. The reason for that is actually a U.S. tax law kind of reason. But think about a 0.8%-1% distribution rate. Now, because Pershing Square Holdings retains its capital and that capital compounds over time, that means that the NAV of the company, we expect it to become a larger business over time. We think that's actually quite helpful to the company. Pershing Square Holdings had $3.9 billion of equity, I remember it well, about eight years ago. Today, that number is about $14.5 billion. It's becoming a more significant company. It's, last we checked, something like the 53rd largest company in the FTSE 100. What's held back the stock is that and what's caused the discount to NAV to be persistent, in our view, is, at the end of the day, stocks trade on the basis of supply and demand. We've done a very good job increasing the supply of Pershing Square Holdings because we've taken NAV per share from $14 eight years ago to about $60. I'm sorry, about $82 or $83 today. So the supply of Pershing Square has grown. We haven't done as good a job of keeping demand has sort of been improved slightly but not materially. The discount, I think, at my last check was something like 21% or 22%. So I think the goal is to increase demand. We've had some limitations in doing that. We're not allowed to market Pershing Square Holdings to what would likely be the core investor in the U.S. shareholder. And even if we could market to U.S. shareholders, it's very tax disadvantageous for a U.S. shareholder to buy Pershing Square Holdings. So I think what we need is we need to attract more investors globally. We need to make the stock at a certain scale. Pershing Square Holdings has massively outperformed the FTSE 100 for the last 8 years. We've gone from being something like the 200th company to the 53rd company. What that means is that if you're an index tracker or you compare your performance to the FTSE 100, the more you don't own Pershing Square Holdings, the more you're going to underperform. That becomes more material as we climb the ranks further on the index. I think that's one thing that's helpful. And then we have talked about. I'm sure the team mentioned that we think if we launch a U.S. version of Pershing Square, it will also have the benefit of creating more visibility around Pershing Square Holdings and benefiting the company with a reduction in fees. And we think those things will contribute. I would say, yeah, my 10-year view is we are able to achieve historic ambitions in terms of NAV return. The incentive fees come down over time. The management fees come down over time because of the Howard Hughes arrangement. Then the discount narrows over time. That would be my goal. Yeah. And if I could just. I expect what will happen. Yeah. Yeah. Just jump in on the one or two key decisions. I don't think it'll be any individual one or two investment decisions that we make. But one of the keys to what Bill's talking about, to achieving our ambitions, is making sure that we stick to our core principles. I think that's been one of the primary reasons why, along with focusing solely on permanent capital, we've been able to have the best period of performance in eight years that we've had in the firm's history. I think in a world that is constantly evolving, where we're now thinking about more fast-moving technology than we ever have before, making sure we're running through that checklist that every business truly does have these defensible moats, that it is as high-quality and recurring as we think, and then being very careful in a world in which a lot of people are spending a lot of money, that we're owning businesses that have very strong balance sheets, I think all of those principles have demonstrated they work for us to achieve those high returns and will be even more important going forward than perhaps they have been historically. Great. Over here. Hi. Ronald Hamilton from J.P. Morgan. I was wondering, how do you think about, I guess, benchmarking the return opportunity from buying back your own shares at a sort of 20% plus discount versus kind of new opportunities in the market? And kind of, I guess, jointly for the board and also for management, how actively are you kind of judging that? Sure. So I'll just start, which is, I think the way that we think about it, ultimately, is we have a view on every individual company in the portfolio. And we understand what discount we're buying in at. So for us, we have a pretty clear view as to the value that we're creating over time. Obviously, thinking about where that discount goes is another part of that equation. But I think we have a pretty good sense in any one period of time. I do think we've done both over the life of the fund and even currently, we are buying in and have bought in a number of shares over time. And I think we've been doing a good job of that. That said, I would say, in the current market environment, we have been increasingly seeing some really interesting opportunities. If the situation continues, just given the speed at which large swaths of industry or the market are kind of just coming down dramatically, that could be an even better source of opportunity. So I would say it's a little bit of a balancing act of trying to take advantage of any highest return opportunities. But we can be very thoughtful about what opportunities we see and then also comparing that to the discount. Bill, I don't know if you want to add anything to that. We're going to create vastly more value for Pershing Square Holdings, finding the next Google or Chipotle or make your list of successful investments in the firm. So that's really our first priority. At very wide discounts, we think it's a very good use of capital. As the discount gets narrower, we don't think it's that great a use of capital. We are starting to bump up against potential limitations. We bought in 30% of the outstanding shares. Management now owns more than 28% of the company. At a 30% threshold, we're sort of required to make an offer to buy out the company. We do want the company to remain a public business. I think, at some point, we're literally going to run out of the ability to buy in shares. I think, before that happens, my guess is the discount will have narrowed to a place where it's not a great use of capital. We think we can find places to buy $0.30, $0.40 dollars. Buying a, if you will, a $0.79 dollar is not nearly as compelling. Great. Thank you. Over here in the middle. Thank you. Andrew Rolfe, private investor. The Hertz investment, should we think about that as an option merely on management's ability to execute a turnaround? Or given you're holding an Uber and you're interested in autonomous driving more broadly, is there an opportunity for Pershing to add value to that? Well, I think, primarily, if we're right on the turnaround that's happening inside of the company both it is certainly due to the management team they've placed in there. But I also think the industry dynamics are getting better. We will make a very, very large multiple of capital just on that alone. So we like that because there's nothing else that needs to happen aside from them just running the business better as the industry is actually getting a more rational environment for us to make 5-7 times our money. Beyond that, we do think that, as I mentioned, with AV in particular, and there could be a number of partners. We do own Uber. So that could be mutually beneficial if they did something. But regardless, there's a number of people that they could partner in a number of ways they could partner. We think, for Hertz in particular, that would be upside to what we see. It's still early. We still think it's going to take a long time before the AV ecosystem, in general, gets to a level where it's at scale that would have an impact on Uber's business model or even, frankly, where it would mean a meaningful difference to Hertz's business model for partnering with AV companies. But we think that that's all upside. And we'd have to evaluate at the time when that starts to happen and becomes relevant if there's anything for us to do to play a role or if there are any companies, in particular, that should be looking at that. Then just, would you like to make a comment on SPARC more generally? Yeah. I'll comment there. So we continue to believe this SPARC structure, so for people who are not familiar, SPARC stands for Special Acquisition Rights Company. We created the SPAC in, I think, May of 2020. It's called Pershing Square Tontine Holdings. Ultimately, the vehicle we intended to use to take Universal Music public as part of its spinoff from Vivendi, the SEC held us up for too long. We had to close within a certain period of time. And unfortunately, we couldn't do the transaction in the SPAC as a result or the SPARC, the SPAC, I'm sorry. And then the board chose to, as a result, assign the contract to us. And we acquired our initial Universal Music stake. So we have a principle at Pershing Square. We always like to take care of our partners. We didn't love that we raised capital to do something and couldn't get it done. So we told investors at the time that we were going to give them a free option on our next acquisition. People said, "Well, how are you going to do that?" And my comment was, "We have the technology. And we had an idea to create an acquisition company that didn't suffer from any of the problems of SPACs." And that's what SPARC is. It took us a couple of years to get approved with the SEC. It's now a registered entity. We are actively looking at potential transactions. And it's a vehicle where you can take a company public. It doesn't have founder shares. These are these promote shares that SPAC managers get. It does not have underwriting fees. It does not have shareholder warrants. The result is you can take a company public without any dilution. The only compensation we get and by we, I mean Pershing Square Holdings, by virtue of its ownership of SPARC warrants, is a warrant on up to 5% of the shares outstanding of the combined company when it goes public with a strike price that's 20% out of the money. So we think it's a fantastic vehicle. But we are as careful, if not more so, in a transaction, the quality of the business that we would use this vehicle for. And we need quality at a price that makes sense. And I would say, for the first couple of years of the life of SPARC, we saw very little quality. And we saw very little anything that makes much sense. I would say, in the recent period, there are a couple of things that are quite interesting that we are doing work on that are possibilities. Whether they come to fruition or not, I can't say at this point. We've also kind of expanded our thinking that this is a pretty interesting vehicle that can be used in a more flexible way. So I'll just sort of leave it at that. But I think, if I had to guess, I think it's more likely than not that we'll do something with this vehicle in the next 12 months. Okay. Good. Maybe time for one last question before we break for cocktails. Over here. You started at Mark Rubinstein. I'm a private investor. You started to use the management company more dynamically over the past couple of years. Sold a minority stake. Did the Howard Hughes deal. Sounds from the presentation like you recently hired an investor relations executive at the corporate level. What's the strategy for the way the management company is run? Is it an asset that you can exploit? Yeah. So maybe I'll touch on that. The answer is, I think, yes. And I think we can do so in a way that's very advantageous to our investors who are not investors in the management company. And I think the Howard Hughes transaction is a perfect example. We had a position, a substantial one, a fairly illiquid one, held by Pershing Square Holdings that has underperformed, I would say, its potential. And we were able to facilitate a transaction that, in our view, will help meaningfully transform Howard Hughes into a much more profitable, faster-growing business. We did that with $900 million of capital from that management company sale that we did. And that's sort of just one such example. And we think there will be many more. And as we also expect, we will launch other funds over time. We do think there will be synergies that will benefit not just the incentive fees production that we've talked about but also benefit, strategically, the opportunities that we can create for Pershing Square Holdings. Great. Well, with that, I want to thank everybody for coming in person to listen to the presentation. For everybody on the web, Bill, thank you. Very good to see virtually for the Q&A. I think, outside, we have some drinks and some food. Is that right, Rupert? Absolutely. Any closing remarks from you? It's not a question for you. I was just going to say thank you very much, Ryan. You've done a fantastic job. The board knew you would. This is an example, I think, of the strength and depth of the team. Great to have you on your legs for 2.5 hours doing a fantastic job. Yeah. You got my exercise today. And then. If I can make a comment. Thank you, Bill, very much for giving your time. I know this is a very difficult time for you and your family. Our thoughts are all with you. Thank you. Well, thank you. I just want to make one parting comment. I'm very often asked the question, "Bill, what happens if you get hit by that proverbial pie truck?" I always say that with a bit of humor. But at a moment in life where that's happened, in some sense, to a very important person in my life, a family member. But the beauty of Pershing Square is we have an incredibly deep team. Ryan's done a spectacular job as CIO of the team, a role he's been in for almost four years. And he's been at the firm for 17 years. Ben's been at the firm for 14 years. I think Anthony, 13 years. Charles, probably 12 years. Bharath and Feroz for nine years. And then we have a couple of wonderful new additions, Jordan and Sonal, for nine years. I'm sorry, for one year. But what's unusual about Pershing Square is, in our industry, people jump from one place to the other all the time. Citadel's offering $150 million to this top star at XYZ firm. And they go there. Or a talented person was running a portfolio at XYZ firm. And then they leave. And they can launch their own firm. What's, I would say, really unique about Pershing Square is we've recruited an incredibly outstanding group of people throughout the company, whether it's accounting, finance, legal, IR. But certainly, on the investment side. And they come to the firm. And they stay. And over time, they become meaningful owners in the company. And I think we're really unique in our industry. We have permanent capital. We also sort of have a permanent team, in some sense. And it relates to, I'd say, significant, I would say, structural advantages we have. It really does start with having a capital base that can't leave. What causes firms to get in trouble when a key person leaves or something bad happens is the money leaves because people get nervous. And they're like, "Look, I'll pull my money. I'll see how they do before I put my money back." When the money leaves, the team leaves. And the firm disappears. And that's why there aren't many examples of hedge funds or people in our industry where they exist for the very long term. I think we've designed Pershing Square very effectively to exist for the very long term. Our view is, today, now, we have two entities we could call permanent capital vehicles: Pershing Square Holdings and now Howard Hughes. I felt a responsibility for managing permanent capital for the manager to be as permanent and persistent as the capital we manage. That's why we did the transaction two years ago to sell 10% interest. We set up an independent board for the management company, five of the nine directors. Two of the nine were institutions that were the largest investors in that transaction. Three are just very high-caliber individuals, all of whom bought a piece of the management company. So we have an independent board that's, I think, unique in our industry. And we have a structure designed for us to persist for the very, very long term. And I think that's an enormous advantage in terms of recruiting talent and, as importantly, retaining talent. Last but not least, I just want to thank everyone. It looks like a wonderful every seat seems to be filled. I thought, for the part I saw, Ryan did an absolutely spectacular job. I think the one thing I found one little thing he got wrong. So. Only one? But the one little thing, just for fun, is I believe Vivendi and Bolloré only own 28%, not 33%, of UMG. But other than that, I thought he did an unbelievably spectacular job. It's good. Next year, I'll be better. I'll try to make sure. Anyway. Thank you.