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Pershing Square Holdings Ltd on Monday reported a rise in net asset value and said it outperformed its benchmark, with new investment Alphabet Inc among its portfolio’s stars in 2023.
The Guernsey-based investment firm, with stakes in Chipotle Mexican Grill Inc, Universal Music Group, Alphabet Inc and Hilton Worldwide Holdings Inc among others, swung to a pretax profit of $2.56 billion in 2023 from a loss of $1.20 billion a year prior.
The company turned to a net gain on financial assets and liabilities at fair value of $3.03 billion in 2023, from a net loss of $2.64 billion in 2022.
The company’s net asset value per share grew 26% to $65.04 at December 31 from $51.76 at the start of 2023. NAV per share total return after performance fees was just under 27% in 2023, outperforming the company’s principal benchmark, the S&P 500, which had a return of just over 26%.
Pershing drew attention to the performance of Universal Music Group. Pershing called the company a ‘high-quality, capital-light business that can be best thought of as a rapidly growing royalty on greater global consumption and monetization of music’.
‘UMG’s organic revenues grew 12% while adjusted earnings before interest, tax, depreciation and amortisation grew 19%, far in excess of the company’s mid-term guidance... We believe that the long term outlook for UMG is strong and that the company will continue to outperform its mid-term guidance due to better monetization, cost rationalization, and continued development of new
services.’
Pershing in the first half of 2023 established a ‘large position’ in Alphabet, prompted by a slide in the Google owner’s share price.
‘Alphabet has been a tremendous investment to date and was the third-largest contributor to PSH’s performance in 2023,’ it said.
Pershing shares were 1.1% higher at 4,202.00 pence each on Monday morning in London.
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