All-In-One Access With Pershing Square Holdings - Buy The Best SPAC With A Top Investment Manager On The Side

Summary

• Pershing Square Holdings is a closed-end fund that allows investors to participate in Bill Ackman's Pershing Square hedge fund.
• PSHZF is also likely to benefit in an asymmetric fashion from participation in the Pershing Square Tontine Holdings SPAC.
• Beyond the SPAC, Ackman has a long history of outperformance as an investor.  If investors are believers in his ability to generate alpha in the future, PSHZF shares are attractive today.

Investment Thesis

Pershing Square Holdings (OTCPK:PSHZF) is a closed-end fund that allows investors to participate in Bill Ackman's Pershing Square hedge fund. By buying PSHZF shares, investors are able to participate in Pershing Square Tontine Holdings (PSTH), Bill Ackman's SPAC that currently trades at a ~25% premium over NAV and are also able to capture special SPAC benefits through PSHZF's ownership of PSTH Sponsor Warrants. The CEF's shares trade at a ~29% discount to NAV which offers some margin of safety and potential upside if Ackman is able to close this gap. If Ackman is able to continue to perform well as Investment Manager - more of the good Ackman and less of the bad - then between capturing his ability to generate alpha and participation in the SPAC, PSHZF shares could be winners.

Introduction

Bill Ackman's SPAC, Pershing Square Tontine Holdings has been the subject of considerable investor enthusiasm.

For good reason.

I was a buyer right around time of IPO and wrote up my bullish thesis which you can read here.

But here's the short version. Ackman's SPAC is the largest-ever raised, clocking in with $4 billion in the war chest, and he has been very upfront that he is on the hunt for a "mature unicorn." His SPAC's executive team and Board of Director's is a who's who of astute operators. The SPAC features a unique sponsor compensation structure that favors common shareholders far more than any other SPAC out there, and there is the Tontine warrant structure that will encourage investors to vote for any deal that Ackman makes. Oh, and Bill Ackman's prior SPAC netted investors something like 20%+ compound annual returns.

Speculation about exactly which company Ackman is going to take public has reached a rampant fervor and now controls its own small subsection

Analyst’s Disclosure:I am/we are long PSHZF, PSTH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.