Pershing Square Capital Management, L.P (PSCM) Q2 2016 Conference Call Presentation

(Available at till Wednesday, August 3, 2016)

Bill Ackman, Founder and CEO

Q2 performance positive but year to date negative 

“Q2 [performance] was between 5 and 6 % depending upon the funds. The performance month to date is between 3 and 3 ½ %…Year to date numbers are in the -14% range for the private funds  and -18% for Pershing Square holdings…The difference in performance is because PSH is leveraged.”

Leading with Mondelez, Lagging with Valeant

“In terms of contributive performance for the quarter, Mondelez is the biggest contributor at between 3 and 4 %…Valeant, a detractor, between -1.6 to -2.1%…Of course, our performance to date is a negative number, -14% negative for the private funds  and -18% for Pershing Square Holdings .”

Significant redemptions but lower than industry averages

“We think about redemptions as a percentage of capital and not obviously the absolute dollar amount…Redemptions [this quarter] were 37% lower than the average of the last eight years. My guess is that our redemptions that we’ve received as a percentage of capital are probably among the lowest in the industry, and that’s really because we benefit from a very stable capital base and that’s because our investors have been incredibly supportive of us.”

On Valeant

“Valeant was at a total shareholder return of -23.4% for the quarter. It represents 6% of capital…During the quarter, we restructured our option position in the company…People have mischaracterized Valeant’s R&D programs. Historically, this company has one of the most productive R&D programs of any pharmaceutical company in the country.”

On Herbalife

“We´re short the stock not for emotion, not for anything else other than we believe this is a massively overvalued company. We believe the company is a fraudulent business [and] will not survive.”


Ali Namvar – Partner

On Mondelez´s offer to acquire Hershey

“While an acquisition of Hershey would strengthen Mondelez´s confectionary presence in North America., whether or not a deal creates value for shareholders depends on the price paid, the acquisition currency used and, importantly, the ability to generate significant cost savings at Hershey.”

Cost savings at Mondelez should continue even with acquisition

“So in short, as shareholders, we would find it unacceptable for an acquisition of Hershey by Mondelez to delay or derail the productivity and cost savings transformation that’s under way at the company.”

Mondelez and Hershey seem like a good fit

“Mondelez does not have a strong confectionary presence in the U.S. and clearly Hershey is the dominant US confectionary player. One of the reasons we do like Mondelez though is that it has exposure to international markets where there is more growth in these categories than in North America. So we do have a question as to what Hershey’s growth rate is in the future, and whether it would be better for Mondelez to invest more in its emerging markets businesses and grow the assets there.”


Extra notes on their Herbalife Presentation, No longer business as usual

  • “We believe the implementation of the settlement will cause the pyramid scheme to collapse.”
  • “The FTC findings confirm our long-held allegation that Herbalife operates as a pyramid scheme.”