Pershing Square Holdings (PSH) is a closed-end fund with net assets of £7.2bn, and the flagship fund of Pershing Square Capital Management led by Bill Ackman. Pershing Square is variously known as a ‘hedge fund’ or ‘activist’ manager, but a fundamental value investor is probably a fairer description. At times, hedging may be employed, seemingly to protect from large sell-offs rather than create a low volatility return stream. The portfolio is highly concentrated, with eight to 12 core holdings at any one time. Disclosure on holdings is poor, but we believe that PSH currently has only ten long positions, with some additional hedging. Pershing Square’s strategy is to acquire smaller pieces of ‘superb’ businesses over which they can have substantial influence, rather than controlling interests in lower quality businesses. At times, when the manager perceives that risks are extended, Pershing Square has employed hedges. In 2008, Pershing Square generated significant gains from holding CDS in monoline insurers. More recently, in February 2020, Pershing Square entered into CDS on corporate bonds at narrow spreads over treasuries. Spreads widened very soon after the trade was initiated, generating very significant gains, the proceeds of which were reinvested (with exquisite timing) in mid-March. As we discuss in Performance, the combined annual return of the strategy from 01/01/2004 to 23/03/2021 is 17.1% per annum, against which the S&P 500 delivered an annualised return of 9.8% per annum. In recent times, performance has been flattered by two very strong years it achieved in 2019 and 2020. The period from 2015 to 2018 inclusive was poor and, as we discuss in Discount, is a key reason why the shares trade on a very wide discount.