Pershing Square's big bets on Alphabet, music fuel stellar 2023

Investment firm run by Bill Ackman swings to $2.6 bln profit, outperforms S&P 500,

Pershing Square's big bets on Alphabet, music fuel stellar 2023
Pershing Squre Holdings PSH

Pershing Square Holdings (LSE: PSH) kicked off 2024 on a high note, with its shares climbing over 1% Monday morning in London.

The Guernsey-based investment trust, helmed by activist investor Bill Ackman, reaped rich rewards from its bold bets on tech titan Alphabet Inc and music powerhouse Universal Music Group in 2023.

The company's full-year results revealed a remarkable turnaround, swinging to a pretax profit of $2.56 billion from a loss of $1.20 billion in 2022. This impressive performance was fueled by a net gain of $3.03 billion on financial assets and liabilities at fair value, a stark contrast to the previous year's $2.64 billion net loss.

Pershing Square's net asset value (NAV) per share soared 26% to $65.04 at the end of 2023, up from $51.76 at the start of the year. The NAV per share total return after performance fees clocked in at just under 27%, outpacing the company's principal benchmark, the S&P 500, which returned just over 26%.

Ackman's firm lauded the stellar performance of Universal Music Group, hailing it as "a high-quality, capital-light business" poised to benefit from the increasing global consumption and monetisation of music. UMG's organic revenues surged 12%, while adjusted EBITDA skyrocketed 19%, exceeding the company's mid-term guidance.

However, the true star of Pershing Square's portfolio was its "large position" in Alphabet, established in the first half of 2023 amid a slump in the Google parent's share price. "Alphabet has been a tremendous investment to date and was the third-largest contributor to PSH's performance in 2023," the firm stated.

With Pershing Square Holdings shares up 17% year-to-date and over 50% over the past 12 months, Ackman's bold bets on tech and music appear to have hit all the right notes.

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