Good day, and welcome to the Pershing Square 2026 second quarter earnings call. Today's call is being recorded. All participants are in a listen-only mode. Following today's presentation, we will be taking questions from our phone audience. If you would like to ask a question, you may press star one on your telephone keypad to join the queue. It is now my pleasure to turn the conference over to Jill Chapman, Head of Corporate Investor Relations for Pershing Square. Thank you, Taryn. Good morning, everyone, and welcome to Pershing's second quarter 2026 earnings call. Joining me today are CEO and Chairman, Bill Ackman, and CIO, Ryan Israel. Yesterday evening, we issued our earnings presentation and letter to shareholders, which are available on our website at pershingsquareinc.com under the investor section. We expect to file our 10-Q after market close today. Before we begin, I would like to draw your attention to the legal disclaimers at the end of our earnings presentation. Today's call may include forward-looking statements, which involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors described under forward-looking statements in our earnings presentation and IPO prospectus filed on April 30th, as updated by our most recently filed Form 10-Q. We do not undertake any obligation to update forward-looking statements. We may also reference non-GAAP financial measures in response to questions. Reconciliations are included in our earnings presentation available on our website. Finally, please note that nothing on this call constitutes a prospectus, an offer to sell, or a solicitation of an offer to purchase our common stock, or any interest or security in any Pershing Square fund or securities of any other person. Furthermore, nothing on this call constitutes investment advice or an invitation or inducement to deal in securities. With that, I would like to turn the call over to Bill Ackman. Thank you, Jill. Welcome to our first earnings call for Pershing Square Inc. We spent the last 22 years listening to other people's conference calls, and we learn from that, which is why we've taken the approach of the night before releasing earnings, releasing a detailed letter covering what we think are the key issues and considerations for the quarter, leaving the full hour for questions from analysts, shareholders, and other investors. We're going to follow this call with a space on X. You go to X, you can find the link. We're also re-posting that, effectively replaying it. You'll be able to listen to it afterwards. Expect that discussion to be more focused on the underlying investments in the Pershing Square portfolio, though we're happy to take some of those questions now. The emphasis on our underlying holdings, one of the points we tried to make in the letter, what is interesting about this company is that if we never raise another investment vehicle, we just sit with the three permanent capital vehicles we have today. This business will grow at a very high rate, is our expectation, because the underlying companies in which we have invested, we expect will compound a very high rate over time. In fact, if we do nothing, we do not make another investment, we do not sell another security, we just sit back and allow the compounding of a dozen or more of some of the highest quality businesses we know to occur. Those earnings will compound. We believe those stocks will rerate to a higher valuation. We think they are cheap as of this particular moment. That will cause a rise in our net asset value of the funds that we manage. That will increase the fees and the performance fees that we receive from those vehicles, and the earnings stream will flow into the company. We can just sort of sit back. That is what makes this a really interesting business. Now, of course, we want to optimize those portfolios over time. So we will make some adjustments. We will sell something that has reached our expectation of value. We will buy something that has become very attractively valued. We will actually use some financial leverage in the way we manage those vehicles by issuing investment-grade debt to give us long-term returns. But on a quarterly basis, what you will see is a lot of the inherent volatility in stock prices. One of the things we talked about in the letter, that while the earnings trajectory of our companies is pretty continuous over long periods of time, the multiple that the market assigns to them, particularly in, I would say, an increasingly short-term market, is very volatile. So expect volatility in the underlying holdings. But if you look at this business on a multi-year basis, think of it as a royalty, a look-through basis into the underlying growth and profitability of a business like Amazon or Meta, Microsoft or Alcon, Netflix, or some of the others. I am going to use that as just the high-level discussion, and why do not we open the call for questions? Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach our equipment. If you find that your question has been answered, you may remove yourself from the queue by pressing star two. Again, you may press star one to ask a question. We will pause for just a moment to allow everyone an opportunity to signal. We will take our first question from Craig Siegenthaler with Bank of America. Good morning, Bill, Ryan. Hope you are both doing well. We are doing great. First one on fundraising. Can you update us on the timing and size of future fundraisers, including asymmetric, crossover, and opportunistic? Sure. We do not have any specific time frames in mind. In fact, we had not thought of the idea of Pershing Square Ventures until recently when it became an obvious thing for us to do. I would say future fund launches will be episodic. They will depend on what is going on at the time in the business, and when we think it is appropriate to do so. Our first fund launch will be Pershing Square Ventures. Obviously, we are targeting kind of fall, end of year timing for that entity. But again, interesting point, maybe I did not make it clear enough, we love launching new funds over time, but the big driver here is going to be the underlying performance of the existing entities. Let me just talk through a few thought experiments. For example, we own something like 230 million shares of Fannie Mae and Freddie Mac. Stocks are trading at something like $5 a share. Our view, in the event the administration does what the President has suggested they will do, these are $40, $50 stocks. Overnight, our AUM goes up by potentially $8 billion-$9 billion on the day the administration decides to release Fannie and Freddie or relist them, uplist them, if you will, on the New York Stock Exchange and address the outstanding senior preferred stock. That is just one investment in the portfolio. With a base of AUM of about $23 billion of fee-paying assets, an overnight increase of a successful outcome on Fannie and Freddie could be a 30% increase in our permanent fee-paying assets. We finished the year strong. We are up 20%. Our fee-paying assets grow by $4.6 billion. Our first priority is always going to be generating returns for our investors because one, that is the business that we are in. Two, that is how you make a lot of friends. Three, that is how we compound the value of our assets. And four, that is how it makes it more likely that we can launch new vehicles in the future. Yes, we love the notion of launching new funds over time, but our first priority is going to be driving the performance of our underlying investments. What is interesting about Pershing Square Ventures, where it is not overnight going to be a material addition to our fee-paying assets, our plan is to start small. We do think it actually is strategically very valuable to us. For among other reasons, one of the reasons why I got interested in venture 20-odd years ago is one, it is fun and interesting, and it keeps you optimistic about the future. But for our core business, it tells you what is coming. The biggest risk of investing, particularly in the current technological advancement world, is the risk of disruption. Well, where is disruption coming from? It is coming from the 19-year-old that dropped out of Stanford that is building a company in a garage. Well, you want to understand what is coming. Just spending time looking at what is coming is interesting, so that is useful to our business. And two, really is probably the best time in American history in terms of identifying fast-growing, interesting, disruptive companies. Launching a vehicle, one of the biggest, I would say, complaints of the investor, the average investor today is while SpaceX is an amazing company and still has a great trajectory, their first chance to invest in SpaceX was at a $1.5 trillion valuation. I got to invest in SpaceX and X and xAI at much lower valuations. We want that opportunity to the average person on the street, so to speak, and that is what we intend to do with Pershing Square Ventures. And we are going to seed it with investments so people will know what they are investing in. And then we will raise capital off of that base. We are limited in our ability to talk about that vehicle to basically what I have just described. But our plan is to. You will find it interesting. We will talk more about it once we have actually had position to file a document with the SEC. Great. Thank you, Bill. We will move to our next question from Matthew Heimermann with Citi. Hi, good morning, everybody. Two questions. One was just Q2 was kind of an extraordinary period in the market in terms of lots of things being uncertain. We now have the PSUS portfolio shaping up. I am curious, had we not had quite the market volatility in some of the sub-sector declines we saw, how different the portfolio might be? Because it is certainly giving you some diversification benefits in terms of the intermediate term performance. And related to that, just curious how maybe intense the competition for your capital deployment was over that period of time. So look, one of the things I think I said on the roadshow, I said the ideal circumstance for us once we complete the IPO of PSUS, is that we have enormous volatility in the markets, and we are able to buy, create this portfolio at an attractive valuation, and we were really served up with precisely that opportunity. It is much easier to buy stocks when they are going down than they are going up. Now at PSUS, we are 95% invested. We are not going to mind if the market goes up from here because we have deployed our capital. I would say in terms of competition, no one wanted to buy Microsoft or Meta or Alcon or Netflix or ICE, quote unquote. These were stocks that people still are valuing at certain discounts, although same Visa, Mastercard. Some of these new positions that we have put on as well as existing core holdings became available at really significant discounts beginning sort of around the time of the IPO. That was kind of not something that we could control, but obviously very helpful to us. I would just add, Matthew, I think on your point about the competition for capital, really the way we think about it, we wrote this in the letter, is that we maintain this library of hundreds of companies that we think meet our business standards. Some of them we have followed for more than a decade. A lot of them we have followed for many years. We are always sort of making this calculation of price to value based upon following these companies, seeing what we think the potential returns are over a longer time period. We actually wrote about, for at least the investments that we hold, giving a little more insight as to how we think about that in terms of what these businesses could produce from their earnings, how we think about potentially the development of the changes, and multiples that investors should assign if we are right in the future on those earnings. I think the point is, broadly, we are sort of always looking at our portfolio and saying, we follow all these companies. What are the best opportunities at any individual time? To your question and your point, when the market is more volatile, that creates a much more interesting opportunity for us to find where investors have thrown out certain securities that we have followed for a long period of time. And as a result, we think we can earn extraordinary returns that are generally, if we are fully invested, even better than the things that we own. So for some of our vehicles where we have had more investments, we had to make this decision about taking things that we liked, where the returns were good or great, and then deciding to sell some of them in order to fund even better opportunities. In PSUS, to Bill's point, we were very fortunate that we had raised $5 billion in a very volatile market. And because we had this library and because the market was giving us this opportunity through volatility, we did not have that same dynamic of trying to sell or needing to sell a position we like to find something even better. We were able to deploy capital into positions that were very attractively priced. We have seen a little bit of that attractiveness as the shares have rebounded really after the quarter ended to a large degree. But we still think our opportunities are very attractive in what we own. And I would say that library continues to grow, and we continue to monitor it. So as the developments change in the future, to Bill's point in the open remarks, there likely will be additional changes over time. But we feel very comfortable that if we just held this portfolio for the next five or even 10 years, we would get a very good result. Thank you for that. I guess the follow-up question to that is with respect to the investment-grade leverage that you will eventually add to PSUS, I am curious if from the outside, we should think about the timing of that being dictated in part by whether or not you see a period like we just had in 2Q or that is something that would influence the size of how much leverage you put on as opposed to the when you put leverage on. Sure. Our timing for that is kind of full-court press. We would like a capital structure for PSUS, which is basically 15%-20% debt to total assets. We take a very conservative, typical hedge fund manager or some use leverage 8x, 10x, 12x. This is, we are talking 0.15x - 0.2x. So very much an investment-grade, unsecured bond approach to financing high-quality, durable growth companies. It is kind of a component of our strategy, so we want to do it as promptly as practicable. We are beginning, I think, early September of kind of conversations, meetings with the rating agencies. We need to get the vehicle rated, and then the plan would be to launch that offering. And actually, if we had the incremental capital today, we have places to put it. Thank you. We'll take our next question from Dominick Gabriele with Loop Capital. Hey, good morning, everybody. Congrats on the first earnings call. I guess I just wanted to ask about the economic EPS and the fact that there's a pretty small equity risk premium, I believe, in the market today versus historically. I'm just wondering how you guys think about a period of time where the equity risk premium is low like this and how you account for that in your kind of expectations for risk management in your investments. I just have a follow-up. Thanks. Sure. The answer is we don't think about it very much, in the sense that we're really not investing in sort of we're an index investor. We're trying to time deploying capital in one market index or another. We're thinking about the overall valuation of companies. Obviously, you want to be deploying capital when people are assigning real higher rates of return to equity than lower rates of return. What we're doing is day-to-day here is we're running a very concentrated portfolio. Within the construct of 500 companies in the S&P 500, you can find a handful that are extremely attractively priced, where the market is assigning a very low value and offering you a very high rate of return for a very high-quality business. We really don't spend too much time thinking about the overall market metrics. We spend a lot more time focused on one company at a time, the fundamentals of that business, what price we are paying, building a model, what that business looks like over time, kind of determining what our expectation of return is going to be. We think about overall levels of speculation in markets. We think about that in the context of hedging. Maybe, Ryan, you want to add? Yeah. I think it is a very interesting question on the equity risk premium. One of the things that we thought about conceptually is when you compare sort of the bond yield to the implied earnings yield and you kind of capture that spread to see what the equity risk premium is, one thing that calculation misses is that equities, unlike bonds, have a growth profile attached to them. I think we are in a very interesting world right now at a high level, where the reason why the Treasury yields are up significantly, particularly longer on the curve, although on the short end of the curve as well, is because there is an expectation that AI investments are creating stronger growth. One of the challenges that is missed by looking at the equity risk premium in a vacuum and ignoring that growth is we think that the earnings profile, for businesses over at least the near term in aggregate is much higher. If you look at consensus expectations for earnings per share growth, they have risen significantly since the beginning of this year, and a lot of that reflects that equity build-out. To the extent that those estimates are correct, you could argue that you would be willing to accept a smaller than usual equity risk premium because the growth in that earnings yield is going to more than compensate for that. I think that is just kind of one concept that sometimes people maybe don't think through to its kind of logical implication. To Bill's point, though, while we think about the broader market backdrop, conceptually, we are very focused on selecting individual securities. When you look at our portfolio, and we actually put this in a table in the letter, we compare our earnings yield, if you will, or the inverse of the multiple relative to the market, where we compare more favorably. When we look at our portfolio, we have a higher earnings yield than what the market is giving. More importantly, though, we are getting nearly double the level of earnings per share growth. I would say at the high- level concept, I think our portfolio is significantly outperforming what the market would look like. So for example, our earnings yield being higher relative to that bond yield, if you will, for your equity risk premium, and the growth of our companies being significantly in excess of what the average company is going to be giving you on a multi-year basis makes us feel really good that not just perhaps that the market has a reasonable chance of doing well from here, but more importantly, that the individual 12- 15 securities that we hold at any one time have a very good chance of doing significantly better than that. Yeah. Another way to ask yourself the question, would you rather, if the tenure were at 5% today, and our portfolio is sort of an average P/E of 20 or sort of a 5% earnings yield. Which would you rather own, a 5% fixed coupon paid over the next 10 years or a 5% earnings yield on businesses that are compounding their earnings mid to high teens into the 20s?? I actually think it's a very. On that calculation, I'm all in on owning the equities versus the fixed income securities. Thank you for your question. Yeah. I cannot agree more. Maybe just as the follow-up, I was going to ask something else, but sticking with this topic, I guess, when you look at, because I know the table you are talking about with the excess growth, and it makes a ton of sense. I guess when you are thinking about, you are using the S&P 500 of 20.1x as the benchmark, but then you did talk about in the letter how a very small amount of the companies in the S&P 500 are actually creating some of that growth versus a lot really are not. I was just curious of why you focus on the stated S&P 500 multiple versus the equal weight, which might be, I do not know, maybe that is a little closer to your actual portfolio of companies versus those 2%, 3%, 8% that you mentioned in the note. Thanks. Yeah. It is a great question. Maybe if I could just clarify a little bit. The point of notes we talked about, a very small percentage of the companies, we are talking about how much of the current year-to-date gains as of 6/30 that those companies were representing. Interestingly, though, if you look at the S&P 500 more broadly, and we actually like to look at all the individual companies to make these estimates rather than looking at just the overall market or the weighted average, or excuse me— Equal. —The equal weighted. But interestingly, the earnings growth is very strong and much stronger than it is historically, even for a lot of companies that sit outside those very select few that are driving the growth of the overall index in terms of price performance. Whether you look at the equal weight, you look at kind of the median of all the S&P 500 companies or the index average, you see a consistent story where earnings growth is broadening out and accelerating beyond levels that you've historically seen, particularly if you look at the next year to two years. I think that kind of furthers the point that while investors are very focused on a small subset of companies, which has created a really great opportunity for us to deploy capital recently, there is a broader trend where economic growth appears to be driving the earnings per share of many, many businesses, and I would say to levels that seem to be in excess of what they've historically been. To the extent that those estimates prove accurate, that should generally be something that would justify a higher multiple on the overall index or companies in general. Thank you. Yeah. Thanks so much. Just wanted a little bit more color on the investment strategy, so I really appreciate it. Have a great day. Thank you. Thank you. Our next question comes from Rob Ryan with Wells Fargo. Good morning. I was wondering if we could go back to venture, understanding that you are limited in what you can say, but to us, this kind of looks similar to some Robinhood funds that have done quite well this year and one that just priced. Is this something more of a late-stage growth equity bent to it in what you are contemplating for venture? If the holdings are going to be pre-IPO, what would you plan for after a given company in the portfolio goes public? Sure. It's going to be actually a reasonably broad spectrum of companies in the several hundred million market cap, or valuation range doing the multi $10 billion, the $10 billion decacorn kind of range. So companies that are on the brink of going public, as well as businesses that are at an earlier stage. So it's going to be a mix as opposed to just really early stage or very late stage. The beauty of the vehicle, if you think about venture capital today, number one, funds require very long dated lockups. The fees are substantial, 2% and 20% to 3% and 30%. Frankly, you can't get into them. The best venture funds are really sort of oversubscribed forever. So they're inaccessible to the general public. What we're doing is the issue with venture funds generally is the vast majority of venture funds, once the company goes public, they sort of have an obligation either to sell down or distribute the securities to their investor base to kind of return the capital. We view this as a permanent capital vehicle. We want to help companies kind of the full life cycle of their development. So we help them as they're private, we help them go public, and then we can retain the option of continuing to own the businesses for the very long term. So this is one of the things we can offer a private enterprise is we can help them navigate the challenges associated with going from being a private company to a public company, and we can continue to be an important shareholder of that business over time. The idea is for this to be a vehicle that will compound with the underlying holdings. We'll have the flexibility. We believe because of the scarcity of this opportunity to the public markets, because investors won't be able to replicate any of these positions directly themselves, we expect it will trade well, and that will give us flexibility in terms of once the capital is deployed to issue new equity to make new investments. So we think it's a pretty interesting vehicle, and I think we have kind of a unique proposition to offer in sort of a competitive world. People frankly want us on the cap table. Their venture investors bring real value. We're sort of a crossover investor, so to speak, and we have a lot of experience, obviously, in the public markets. We can commit to them to be a long-term shareholder, which is something that the vast majority of venture funds can't do because of the mandate. Those are sort of the differentiating elements that we hope to achieve. Okay. As a follow-up, you mentioned expectation of good trading value. For your other funds that were contemplated at the time of the IPO, now that we see where PSUS is trading on NAV, how has that factored into the equation of what may happen on the longer-term asymmetric crossover opportunistic? Sure. So number one, we think the trading of PSUS is frankly absurd. We are going to take some steps to fix that. I think it largely relates to how the company came public. We might have made some mistakes in terms of how we allocated. Again, our approach here is to kind of democratization of finance. We gave retail a full allocation, and we cut institutions back substantially. We thought we were doing solid for the retail, and my sense is people put in for more stock than they expected to receive, and that led to a kind of a crazy opening. There only been sources of supply, and we haven't done a good job in creating demand for the vehicle, so a very high priority for us. By the way, on relatively low volume, the stock has kind of traded poorly. That's because I think there are the marginal seller, but there really has not been the marginal buyers. The next tick seems to be always down. NAV is approximately $50, and the stock, I haven't checked today, but maybe it's high $30s. We think that's a solvable problem. There are no restrictions on marketing PSUS. We are going to get much more forward-leaning. We have got a whole plan. We will be meeting. It's a great security for financial advisors, particularly after the IPO. Financial advisors don't love buying the problem with the closed-end fund and an IPO is they have to take capital away from their client on which they are earning a management fee. The beauty of buying shares in the secondary market, that doesn't apply, and now they can invest at $0.80 on the $1. There's a big push in the FA universe for their clients to have more exposure to alternatives. Now, most alternatives come with high fees, giving up significant liquidity. Here we have the lowest cost hedge fund in the world in a liquid New York Stock Exchange format and happens to become available now at 20% discount to its liquid underlying asset base. We need to tell that story a lot better, and that's number one. With respect to new vehicles we intend to launch, our plan is for them to be sufficiently differentiated, a bit like Pershing Square Ventures, that people won't be able to create the portfolio themselves. I think that's an important dynamic in terms of where something will and should trade over time. Think about a crossover vehicle, which is a mix of private pre-IPO type companies, as well as some public securities or Pershing Square asymmetric. We're investing in instruments where a public market investor can't recreate the instruments and also frankly won't be able to. There are no filing requirements for these kinds of positionings. It's not something they can say, "Oh, I can replicate it the next day by myself." I think there's a little bit of a marketing argument, "Oh, Bill, we can just replicate your portfolio by just buying the securities once we know that you purchased them." We did that analysis a couple times. We'll update it more recently. We didn't tell people we were buying Microsoft. By the time they became aware, the price they had to pay was materially higher, and the fee structures here are low enough that, yes, people feel free to replicate our portfolio, but historically, you've done a lot better investing with us than trying to copy our portfolio on the day that we're required to make a disclosure about a holding. We're not happy with the trading of PSUS. We're going to take significant steps to address it. We don't think it affects our ability to launch future vehicles, particularly ones where we're like Pershing Square Ventures. We're launching something that the public markets can't create on their own. That doesn't make us feel good about where PSUS trades, and we think that's a solvable problem. Great. Thank you very much. We'll take our next question from Dan Fannon with Jefferies. Thanks. Good morning. So maybe just following up on that, if you could maybe get a bit more specific in terms of what your plans are. Is it just getting in front of advisors, more marketing PSUS a little bit more, or is there a brand campaign or anything more formulaic or things that you have planned out to boost the recognition of that product? Yeah, I think it's a very comprehensive approach, which could include any and all of the things. The one public vehicle we've had historically, we've had all kinds of regulatory and other restrictions on marketing. We can't talk about it on CNBC. We can't talk about it in the U.S. We can't sponsor a podcast. We can't be very forward-leaning. We can't really talk about it at all, whereas none of those rules apply to PSUS. We can be quite forward-leaning in telling the story of that entity, and we think it's a very compelling one. We mentioned that it was an ideal environment to take PSUS public in terms of the ability to deploy capital in a volatile market, not the ideal environment to launch something new that no one's ever heard of before. We really need to get the word out about the existence of this entity. We're going to make a real effort, and the team is going to make a real effort, and I'm going to make a real effort. Understood. Okay, thank you. As just a follow-up, historically, you have had hedges across your portfolio that have created a lot of value. Obviously, you're quite bullish on the investments you have. Is there anything from a tail risk perspective that the portfolio is looking out for that you have in place as a broader hedge currently? Yeah. Thanks for the question, Dan. As we talked about in the letter, the asymmetric hedging strategy in terms of actually having on hedges is sort of by the construct going to be episodic because we are really trying to look out for and then hedge when it's economically feasible, what we would call the black swan risk. The real market-moving, paradigm-shifting type things that occur pretty infrequently, but when they do, they're very big. I would not expect to have hedges on most of the time or all of the time. Don't let that say that it doesn't mean that we are not doing the work. We spend several hours a day. We have a team inside of Pershing Square that includes Bill and myself thinking about what could be potential black swan risks, doing the work, looking at the variety of hedges that we have in place. We have talked about, we think there are several dozen instruments that we periodically refresh on a very consistent basis to look at and compare to the economic and other risks that we see. We do not have anything on at the moment. That said, there are a few risks that we are watching to the extent that our work further develops, we will become more concerned about those risks, and then we find it economically attractive to create a hedge that would help mitigate that risk, then we absolutely would do something. As of the moment, we are doing the work, but we do not think that there is anything on the horizon where we think that an asymmetric hedge would really fulfill the requirements we have. Just to remind you, when we are putting on these hedges, we are looking to make a minimum of 5x, 10x our money. But where we have done very well in the past has been when these hedges are returning 20x, 50x, 100x, and moments like that are relatively infrequent. But we are certainly doing the work, and our hope and expectation is that we will continue to have that work ultimately lead to something when it is appropriate and timely for there to be a hedge in place. Yeah, just for clarity, what we are not trying to hedge is a short-term technical 10% decline in the market next month. It is a fundamental factor, COVID, massive inflation popping up that the Fed has to hedge, financial crisis type development. Beyond that, in the time that we spend looking at interesting macro stuff, occasionally less groundbreaking, less black swan- type things occur where we just see anomaly. We have a view that oil prices will go up, oil prices should go down, 30 years mispriced, things like this. Occasionally, we can find interesting asymmetric payoff structure with something like that. But as of this moment, we do not have anything. Great. Thank you. If you find that your question has been answered, you may remove yourself from the queue by pressing star two. If you would like to ask a question, you may join the queue by pressing star one. We will take our next question from Kenneth Lee with RBC Capital Markets. Hey, good morning, and thanks for taking my question. Any updated outlook around capital returns and more specifically dividends over the near term? Thanks. Sure. Our dividend policy is to return substantially all of the free cash flow that we generate on a quarterly basis to our shareholders. The beauty of our business is it really is no CapEx of any consequence in the business. The only capital we require in the business of consequence is when we launch a new fund. For example, we took PSUS public, the management company invested $200 million. Why? Because we think it is important to have skin in the game. And two, it gives us the opportunity to participate, eat our own cooking, and participate in the success of new funds that we launch. Long-term plan for those stakes is to finance them with investment-grade debt in the same way we are going to use long-term investment-grade financing at PSUS. Our plan is to replace our existing credit facility with a long-term bond, and we will use those proceeds. You could sort of match up to some extent our debt against some of our balance sheet assets. Today, we have 9 million shares of Howard Hughes. We have 4 million shares of PSUS. We have actually $50 million of PSUS preferred, and we have about $230 million of our credit facility that is drawn. Lost my train of thought. Yeah, but I would say the goal as Bill was talking about is our distributable earnings, which we view as a proxy for free cash flow, are available to capital return. Given the current market dynamics and the supply and demand of the PSI shares, I think dividend distribution is the most likely thing that investors should be expecting for the foreseeable. But we always plan to be opportunistic based upon any sort of changing market. For sure. The point I was trying to make was what enables us to distribute our free cash flow is these big capital commitments that come with a new fund launch we expect we will be able to finance in the credit markets as opposed to using, have it build up cash on the balance sheet in order to fulfill them. The flow to the company is sufficiently small that buyback shares at this point is not that practical, but we certainly understand the economics of buybacks and would not be shy about doing so if we felt it was our best use of capital and it did not impair the trading of the security. At this point, we think we need helpful for the market to have a greater flow. Got you. Very helpful there. That is all I had. Thanks again. Thank you. For our next question, we will return to Matthew Heimermann with Citi. Thanks for letting me come back in. I enjoyed hearing Marc's voice on the Howard Hughes call earlier this month. I am curious on two things related to that strategic holding. One is how should we think about the resources Marc and David will have at their disposal to address or even accelerate the opportunity set for Vantage? Then secondly, I guess what is your advice going to be to that company in terms of disclosure changes to better track Vantage since it will be the primary engine of the transformation at Howard Hughes? Sure. That is important question. Glad you asked it. One, we could not be more pleased to have recruited Marc first to the Board and then to take on the Executive Chair role at Vantage, which is Howard Hughes' insurance subsidiary. Then the opportunity to recruit David Gansberg to be CEO and really have, argue, the dream team. We also brought in Lucy Fato, who is the former Vice Chair of AIG, General Counsel. It is a bit like bringing in Michael Jordan and company to run a high school basketball team in some sense in terms of what they were used to. They were playing at Madison Square Garden and now a little small playing field. Obviously when you have a team like that you want to put capital behind them. The highest priority of Howard Hughes today is a focus on the monetization of, for those who are less familiar with the story, Howard Hughes kind of began its life as a real estate operating company. The nature of the business is it has actually important self-liquidating components. We sell $400 million-$500 million of lots to home builders each year. We have approaching $4 billion of condominiums under contract to be sold over the next several years. The company generates approaching $300 million of net operating income from its real estate assets. But the market clearly looks at the company today as a real estate company, and the best evidence of that is the stock went from $89 at the beginning of the year to the mid-$60s basically on rates rising. Because people think rates going up is bad for real estate, particularly a company that owns a lot of land that is selling to home builders. The reality is rates rising have had no negative effect on Howard Hughes, and if anything, the company has put up consistent quarters. But the market is not interested in a real estate development company. Our business plan here is to convert Howard Hughes, transform it into a modern-day Berkshire Hathaway, and the path to getting there is deploying more capital insurance. Now that we have the team, we have the asset in terms of Vantage, we begin with a very good insurance platform, and we have got a great team that we have brought in to run the company, and now we are going to get them more capital. We are exploring transactions that would enable an acceleration of capital into the insurance from the real estate subsidiary. A big focus of us for obvious reasons. Let me give the perspective from Pershing Square Inc. To remind, we have call it $4.9 billion of, what is the market cap? Maybe $4 billion of market value or fee-paying assets at Howard Hughes. But the way that arrangement works is we get paid basically 35 basis points or $15 million on the current market cap, and 1.5% on the market cap we create in excess of this $66 kind of base. If we are correct that we can transform Howard Hughes into a company that people want to own, the stock should fairly quickly rerate to its kind of current intrinsic value, kind of the liquidation value of its real estate assets, which would put north of $100 a share, and then compound with the compounding of our insurance company. As that happens, what is today a $15 million fee stream very quickly becomes a very important contributor. Obviously, big focus on getting the team in place, big focus on getting capital investment insurer, and then the last point is how do we give the market information so they can understand what is being accomplished? You should expect the same way we have taken an approach at Pershing Square to give you the information we would want to understand the Pershing Square story. We are going to do the same thing at Howard Hughes so that insurance investors who are used to investing in insurance companies are getting the kind of disclosures they need in order to understand the progress there. What is interesting about Vantage, the Howard Hughes subsidiary, is we think we have one of the best teams in the world manage the liability side of the balance sheet, and we have been managing the asset side of the balance sheet for Vantage at no cost. So that combined capability and lack of fees, we think, enables Vantage to earn a very high return on equity. To the extent we could put more capital into that business, we can grow that capital more quickly. We think the market will assign very nice value to those earnings. Yeah. If I could add, Matthew, in terms of helping the market better understand the Vantage story with disclosure, last quarter, we created a supplement that we talked about on Howard Hughes' first quarter earnings call, where effectively we, working with a company, helped lay out a sum of the parts analysis in a way that we actually think about the value drivers of the business, pretty similar to how we laid out in the letter how we think about the value drivers of Pershing Square Inc. We wanted investors to better understand the component parts, particularly as we're going through this transformation from what has historically been a very high-quality real estate business into what is in the future going to increasingly become an insurance-led operation under Marc and David's leadership with the investment acumen of Pershing Square. We talked about how, to Bill's point, we believe looking at a sum of the parts, starting out with Vantage at a relatively small size today, that we think the intrinsic value is north of $100. We laid out a plan where by allocating the $2.5 billion - $3 billion of free cash flow we expect the business to generate over the next three to five years, we think with that capital primarily going towards Vantage, how we could build up to a sum of the parts if the business is able to earn a high teens or 20% return on equity, where Howard Hughes' intrinsic value by the end of 2030 could be something north of $200 per share. It highlights the way that we think about the business. What we've been doing on a quarterly basis, and we did last quarter since that was the first quarter in which we had owned Vantage, even though we only owned it at Howard Hughes for about a month of the quarter, was we laid out a supplement so that you really had the same information for Vantage as if you were looking at any other publicly traded insurer. I think increasingly we're going to be providing more of that disclosure so people understand the materiality of the insurance business as we build it to Vantage. At the same time, we're going to be providing periodic updates, perhaps maybe on an annual basis, tracking how we think about the increasing evolution of Howard Hughes' business model and what that means for a sum of the parts analysis for investors. As Bill mentioned, the standard is we want to give the investment community, we want to give the analysts and other shareholders the ability to see things the way that we see them if our worlds and roles were reversed. So we're going to be providing frequent disclosure about how we think about the intrinsic value of Howard Hughes. But as Bill mentioned, and as we talked about even last quarter publicly, we think that the intrinsic value for the business over time for Howard Hughes could be many multiples of the current share price, and Vantage is going to be an increasingly important consideration of that. Yeah. I think for people who want to get into the story early, this is sort of your moment. The shareholder base has been historically a dedicated real estate shareholder base. I think they've largely been selling because they're not insurance analysts, and the insurance story is still obviously only a couple of months old. Marc has really only been in the seat for a few weeks. So super early, but a great insurance platform, very strong team, an existing platform in Vantage. And the Howard Hughes real estate team is best in class, and one of the things that we're looking at there, how do we make Howard Hughes real estate a much more asset-light business, make it look a little bit more like Pershing Square Inc? We have a team with incredible talent. We have amazing assets, and they're investors who like to invest in these kind of assets with very talented teams. So we're really starting to look very closely at how can we take the billions of dollars of equity value that's in real estate and port it over to the insurance operation. So that's an important priority for us. Thank you. We'll take our next question from Edmundo Yépez with Armada Capital. Sure. Hi, guys. Can you hear me? Yes. Hello? Okay. I have, I guess, four questions. One of them is more a demand rather than a question. The first one is, how should the general public think about the difference between Pershing Square USA and Pershing Square Holdings? I think the leverage levels are different. The discount is going to be different. I believe there is a tax issue for U.S. shareholders. I guess the question is what makes them comparable? The first regarding that is what makes the vehicles comparable, and then how should an investor decide on which one to buy or if there is any material difference? I do not know. What do you guys think about that? Regarding your letter, the second question is regarding the letter. You told us that on the library, the way the USS, the expected IRR, I guess, is by having a terminal P/E ratio or a terminal earnings ratio for each given position. Can you give us some color on how you decide the fair ratio for each company? How does a 30x P/E ratio company look like versus a 20x? I do not know if that makes the question clear. The third one is, I guess, there are a lot of questions regarding the return on invested capital regarding the AI super cycle or the AI investment super cycle. I do not know, how are you guys thinking about this? I am particularly concerned about the sustained levels of maintenance CapEx for the, I do not know, hyperscalers, if you will. I do not know how you think about your positions in particular. How do you think about when does the initial investment and high investment cycle ends, and then how does the normalized CapEx- to- sales ratio look like? I do not know if you have some color over that. The last one, I demand, Ryan, I am afraid to inform you that you are no longer a private person by being the CIO of the largest firm. When can we expect your first long-form interview? I think it is going to be very useful for shareholders to get to know you. I think you have a great story to tell, and then I am quite sure there is more than one bright interviewer willing to do the tasks. Thank you, guys. Thank you for four excellent questions. Ryan's long-form interview, we're going to work on scheduling right away because I think it's an excellent idea. We should put him on the podcast circuit. Why don't we do these in reverse order? Ryan, why don't you take the hyperscaler ROIC question? Sure. I think it's a really great and timely question. What's been very fascinating, I'll talk more specifically about some of our holdings, although I think this applies more broadly, but in particular, I would say Amazon, Microsoft, and while we sold it recently in some of the funds that we manage, we've had a multi-year holding period in Google as well. What's been fascinating is these companies have operated these cloud businesses that have grown at very high rates before the AI super cycle really kicked off starting maybe a couple of years ago, and they really operate in an oligopoly. What's important, though, is they are the nexus point for the security for the inner workings of many enterprises where they are mission-critical systems that they provide. What's happened with AI is now you have the additional, and we think AI is going to be a very transformational technology, both at the enterprise level and the consumer level and a lot of other ways increasingly as you get into things like robotics. But there is a huge demand for more of these data centers and a lot of the services that the data centers provide. One of the challenges we think from an investment perspective is the companies themselves, because they have these deep relationships with customers and increasingly have had a pretty close relationship with a lot of the frontier model companies who are taking up a lot of the compute usage in the data centers. They have seen that there are really good lines of sight into returns on their CapEx, so they've been spending ahead of that because they believe these are very good returns on capital. Problem is that they have not, until very recently, really a few weeks ago on some of their earnings calls, given investors a lot of clarity as to the returns that they expect from that capital expenditures. From a public markets perspective, what a lot of people have observed, and candidly, based upon most of the share price performance this year have not liked, is that the hyperscalers are taking what was a relatively thought to be capital-light business model, investing a huge amount of growth, which has made it a much more capital-intensive business model, and that was not showing up in any of the near-term metrics, such as revenues or earnings per share, that you would expect if there were good returns on capital here. The problem, and I think Andy Jassy put this best on Amazon's call, but Satya and some others also talked about it in Microsoft's call, is there's a gap in terms of timing. There is a lot of line of sight to the ultimate demand when Amazon or Microsoft or anybody else spends $1 of growth CapEx in their cloud business as to what those numbers will look like. But first, you have to build incremental data centers, and they've talked about how that could be a two- to three-year time period where you would not be able to get any revenue from your customer until the data center's operating. Then after you get that data center up, it may take six months to get the GPUs or other computing equipment you need set up, and that would take an additional six months. The challenge is from when you start building a data center to meet this enormous level of growth, there could be a two and a half- to three-year period before you're recognizing revenue. What we expect and we think what we've seen is huge levels of CapEx, which are continuing to grow because these companies think they're good opportunities. No near-term earnings uplift from that, and we think investors, until recently, were incorrectly believing that that meant that these were bad investments. The way we look at it, and I think we wrote about this in the letter, is similar to how we look at all businesses. We really try to think about how these businesses are going to develop over a multi-year, sometimes multi-decade period of time, and we really build in our expectations that way. The way that we're effectively thinking about the hyperscalers, investors will start to see the returns in a couple of years as the actual customers come into these data centers. The good news is the companies have an incredible line of sight that they feel very confident in non-cancelable multi-year contracts to generate those returns. The way we think that's going to flow through to your questions about CapEx -to- sales ratios, about margins and things, is effectively analyst estimates for these companies earnings several years out are going to go much, much higher. We think there's going to be much higher revenue growth as the returns start to layer in from the incremental revenue they generate. There are a lot of fixed costs to get these data centers up, and therefore, when you get the revenue, margins should expand. Ultimately, the increasing levels of revenue, a flatlining or even a decline in two to three years of CapEx, means the CapEx- to- sales ratio is going to go down. I thought Andy Jassy described this the best when he said this is the single best kind of generational opportunity they had at very, very high rates of return. If that's correct, a lot of the estimates that even we have on how these businesses will perform, I think is going to be incredibly conservative. Yeah. Maybe sometimes the best way to understand something is by analogy. It's a bit like, imagine you had an apartment developer, and they own a whole bunch of apartments, and the apartments were in, I don't know, Phoenix. Then some massive company opened in Phoenix, and they brought 100,000 new workers in, and they were short 100,000 apartments. The builder said, "Oh my God, this is an incredible opportunity," and he goes and builds 100,000 apartment units. The result is he's got to spend a huge amount of upfront money, but it's going to take a couple of years, probably two to three, before the first renter is going to move into those units and start generating cash flow. If you don't have confidence in the developer, then you don't want to invest in his company. But if you have confidence that the demand is real and they're good at building apartments, and the cash flows are going to be there, you get excited when he says, "Oh my God, this is an incredible opportunity." By the way, when you have that much demand coming in at one moment, your ability to drive price is very different than in the ordinary course. I think that's really the best analogy, my version of an analogy for what's going on with the hyperscalers. On terminal P/E, obviously very important question, depending on the nature of the business and the kind of entry price, that can be a huge factor in ultimately what the business is worth. But maybe, Ryan, how do we build such a model? How do we think about terminal P/E? Sure. I think the way that we think about terminal multiples is ultimately reflecting two factors, risk and growth. One of the principles that we have for anything in order to increase the likelihood that we're right and effectively make sure the terminal multiple doesn't go against us, if you will, is we want to reduce the risk factor. So we are looking for businesses that are simple, predictable, free cash flow- generating businesses, strong competitive positions, very strong management teams or ones where we can upgrade the management team to be strong, and good capital reinvestment, value creation, very shareholder-friendly orientation. If we get that right, ultimately we think that the risk element of the terminal P/E is something that is going to be in our favor. Therefore, businesses that are more predictable, businesses that have less levels of competitive risk, and businesses that are run better operationally, less levels of risk, should all else equal for a given level of growth, trade at a higher multiple than other ones. The second aspect of that, though, is the growth rate longer term of the business and ultimately the per share growth rate of the economic earnings of the business over time. We try to think about that based upon the secular growth drivers, the competency of management, the productive use of reinvestment, and that really gives us a characteristic. Now, I think to Bill's point, and importantly, the way we think about it, and we wrote this in the letter, is that is an inherently imprecise exercise. While we try to use the factors of risk, we try to use the growth, we try to actually look historically at what companies have traded at and think about why they've traded there. We look at the broader multiples, such as we wrote about the stock market multiple relative to growth, to help give us a better insight as to the range of potential outcomes because we don't ever look at just one scenario. We're always thinking about valuation of businesses for a range of potential developments and a range of potential outcomes. That really gives us a perspective as to how to think qualitatively about what a multiple could be. The most important point, though, and we wrote about this in the letter, is we want to own businesses where we make the majority of our money because of the underlying earnings and the growth of those underlying earnings that the businesses generate, rather than trying to bet on how much multiple expansion that we'll be getting in order to achieve the levels of return that we're looking for where we talked about generally 20%+ type levels of return over a multi-year period during which we hold. The reason for that is the more that we're betting on earnings growth and the higher that rate of earnings growth, the less getting precisely the right multiple we put on the business matters to generating very high levels of investment returns. Same time, it means that we can hold businesses for a longer period of time while generating those high returns. While we think a lot about terminal multiples conceptually, and we certainly try to do our best to evaluate them, we really want to be focusing on being correct on the earnings growth because that can be the primary driver of ultimately the business performance, and that becomes even more so, as we wrote about, the longer that you hold the business. Okay, your last question on PSUS versus PSH. The answer is they have different attributes depending upon where you are domiciled. If you are a U.S. person today, the tax characteristics of PSH make it really not a security that you would want to own. U.S. investors, it is considered a passive foreign investment company, and U.S. investors have to experience the or include the gains when we sell a security at PSH in their tax return, even if they have not experienced the return on that gain. If you were to buy today, you step into our basis and our existing holdings. For offshore investors, PSH is a more tax-efficient entity. That is a positive. It trades at a wider discount to NAV than PSUS, which is a positive. It charges an incentive fee, which on the margin is a negative, and it has a slightly lower management fee, is a positive. It has very attractive low-cost financial leverage. It has about something like 18% debt to total assets with leverage with an average cost of something less than 4%. So it has very attractive financing. That is PSH. But again, for a U.S. investor, it is really not your thing. PSUS has lower fees with no incentive fee. It is in the U.S. markets. Today does not have any leverage. We do intend to, market conditions depending, add something approaching 20% debt to total assets, which will allow us to have a similar kind of capital structure with more flexibility in terms of marketing that vehicle to investors. You sort of have to do your own analysis. It trades at a lower discount. Then you have to make some assumptions about our ability to cause those discounts to narrow over time. I think they will both do very well over time. But you should talk to your tax advisor before you make a decision. Those were four excellent questions. We are, let us say almost out of time. Let us take this last question because we have one more investor we would like to accommodate, and then we will go to the spaces. Go ahead. We will take our next question from Bran Raskovic with Raskovic Holdings. Good morning. Would you clarify the current status of SPARC, what your plans are, and how SPARC and your plans relate to the other opportunities to invest in your publicly traded vehicles? Sure. SPARC is a special purpose acquisition rights company. Think of it as an acquisition company without the negative attributes of a SPAC. There is no founder stock. There are no shareholder warrants. There are no underwriting fees. It is a very efficient way for a company to go public. We, Pershing Square backstops the vehicle, so that we can guarantee to a private company that they can go public at a fixed price per share regardless of market conditions, and they will raise a minimum amount of capital, the capital that we commit to the offering. We think it is a very appealing structure. We have regular conversations with potential private companies that are considering going public. In order for us to do a transaction, it has to be a business that meets our standards for quality and growth and valuation. We have not yet made that deal. We are seeing actually significantly more deal flow, I would say recently in that regard. The economics of SPARC are entirely owned by the Pershing Square funds. If we do a transaction, it will be an opportunity for us to deploy capital and a private company going public. You should expect at an attractive valuation, and we get some incremental economics in the form of, we have these sponsor warrants or SPARC warrants that give the Pershing Square funds warrants on up to 5% of the target company, up 20% from effectively the price at which we take the company public. Think of it as a vehicle that we can use to take a large private company public, where the economics of that will flow through to our investors. Then ultimately to Pershing Square Inc, we do a great deal and take a company public of significance. We invest a couple of billion dollars of capital and we earn a bunch of warrants that are valuable. It will contribute to our returns, contribute to our growth in AUM, and thereby contribute to the fee stream that we earn at Pershing Square Inc. With that, I am going to end the call and thank everyone, and we are going to head over for those of you who have time. It will be recorded, so there will be a playback. If you go to my Twitter handle, you will find a link to the spaces that we are going to launch very shortly. Thank you all for joining our first call. This concludes today's call. Thank you again for your participation. You may now disconnect and have a great day.