PS Q3 2026 earnings call transcript, November 3, 2026

Hello, and welcome to Pershing Square's Third Quarter Earnings Call. I will now turn the call over to Pershing Square Head of Corporate Investor Relations, Jill Chapman.

Thank you, Jen. Good morning, everyone. Welcome to Pershing Square's Third Quarter 2026 Earnings Call. Joining me today are CEO and Chairman Bill Ackman and CIO Ryan Israel. Yesterday, we issued our earnings presentation and letter to shareholders, which are available on our website. at PershingSquareInc.com under the Investor section. We expect to file our 10-Q after market close on Thursday, October 5th. Before we begin, I'd like to draw your attention to the legal disclaimers at the end of our earnings presentation. Today's call may include forward-looking statements which involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors described under forward-looking statements in our earnings presentation and our IPO prospectus filed on April 30th. We do not undertake any obligation to update forward-looking statements. We may also reference non-GAAP financial measures in responses to questions. Reconciliations are included in our earnings presentation available on our website. Finally, please note that nothing on this call constitutes a prospectus and also offer to sell or a solicitation of any offer to purchase our common stock or any interest or security in any Pershing Square fund or securities of any other person. Furthermore, nothing on this call constitutes investment advice or an invitation or inducement to deal in securities. And now I'd like to turn the call over to Bill. Thank you, Jill. Welcome to the call. So we begin each quarter the night before delivering a very, I would say, comprehensive

letter about the quarter. And we try to focus on what we think the most significant developments are, plus a quarterly presentation. And the goal there is to give us much time to answer questions from the investor and analyst communities. We do this in two parts. We have an hour, a kind of traditional earnings call. Part two opened very broadly to the full shareholder universe. You can follow along on X for part two or just stay on this call. And we will address your questions. Why don't we begin? I would say just a high level sort of thought. What's unusual about Pershing Square versus other alternative investment managers is all of our assets today are publicly traded. Our capital base is permanent. What that means is there is volatility in our AUM driven by just mark to market changes in the value of the underlying stocks in our portfolio. Actually, Ryan came up with a very useful construct to think about our business. Why don't you just talk about, you know, it's kind of summarized in the letter what we're the message we're trying to convey to shareholders. Yeah, sure. So as we wrote in the letter, ultimately, given the permanent capital nature of our business, while we will raise occasionally some new funds will be very additive to our fee paying assets under management, the bulk of our growth, what we call our organic growth is ultimately going to come from the returns that we generate over time. And for the vast majority of our capital, what we are looking for are businesses with a high degree of certainty where we can

predict out over the coming years and decades what those businesses will look like. And we're trying to curate a portfolio of really 12 to 15 of the world's great businesses from what we think are several hundred that we closely track, where we believe when we purchase these businesses, we'll be able to earn at least a 20% rate of return over a multi-year period of time. And if we do that, and we're correct, then ultimately, our assets will grow in a similar proportion to the returns that our underlying businesses earn. And when you decompose that, the way that we actually think about how do we earn in general, that 20 plus percent rate of return, there are really two components to it. The first and the most important part of how we will ultimately achieve those returns is what the businesses can perform. And that ultimately relates to their earnings growth over time. And so we're really seeking businesses that can grow, generally speaking, with a high degree of confidence, anywhere between 15 and 25% a year. It's exactly what we have when you look at our portfolio of about 15 companies that we own today. Secondly, where we will get a little bit of an added return, we hope over time above what the business itself can grow at, which we view as a proxy for the growth and the value of the business is multiple expansion. So investors, when they assign a multiple of earnings to stock, we try to buy those businesses at a time in which people are questioning whether the business can continue to perform either at the past level that has or they're trying to evaluate some future uncertainty that has arisen today and what the resolution will be. We develop a perspective where we believe the business is likely to perform at a continually strong level or an improved level in the future. And we believe we are buying

that business at a time in which people are questioning the future business prospects, perhaps, and we can buy a discounted multiple to what we think the business will ultimately be worth once the clouds are a little bit clearer and the sky's a little bit clearer, if you will. And that should be additive to the returns of the business itself. And so the combination of those two factors, buying some of the world's great growth companies and then buying them at attractive or discounted valuations are likely going to deliver that more than 20% return that we're looking for, which will be the core driver of our business. And that was really what we tried to bring through in the letter at a very high level in terms of the concept, as well as thinking about our portfolio overall as really sort of a subsidiary of a holding company that's comprised of 12 to 15 subsidiary years where each investment itself can try to deliver those 20% returns primarily through the earnings growth. And what you're seeing in our fee paying assets under management will be the collective result of all of those businesses. Again, one other thought comparing us to other alternative managers is that the focus with, you know, I know the Apollo call may be finishing up soon, is really going to be on realization events, because that's a big driver of incentive fees, and then the progress of fundraising and new funds. In our case, what really matters is the progress of the underlying companies. How are our underlying businesses doing? Because ultimately, that will lead to increases if we've done a good job in the underlying value of the company and therefore the assets that we manage over time. With that intro, why don't we actually let me cover

for one other topic of significance. One of the most important developments of the quarter was the progress we made with Howard Hughes. Just before the end of the second quarter, we closed the transaction and Howard Hughes acquired Vantage, especially the insurance and reinsurance company. And then we were very fortunate in that Mark Grandison stepped up to become executive chair of that company. We were fortunate in being able to recruit David Gansberg to be CEO of the company and then Mark spent the last four months building out what we believe to be the best insurance team in the industry with a company at a very tiny scale but a company that we're going to work to grow the insurance part of Howard Hughes very rapidly by taking capital out of our real estate subsidiary and injecting it into the insurance operation. We've made very good progress on the management part of that story and we are full speed ahead on the monetization part of the story. But we expect Howard Hughes to become an insurance-led holding company to be able to think about this business over the next months to going into next year as we put more and more capital into the insurer. I mention that story because it's really today an immaterial part of the revenues of Pershing Square Inc. We get a base management fee of $15 million, but we get an upside management fee of 1.5% of the market cap of the company. We create an excess of that, what was originally.

a $66 floor that grows with inflation. As we make business progress, we expect that stock to re-rate. Today, it trades at a significant discount to think of its liquidation value. As a high-returning insurance company, it should trade at a multiple of that underlying intrinsic value. So very good progress, and I think more to report there as we make progress. Let's go to questions. Thank you. If you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. If you find that your question has been answered, you may remove yourself from the queue by pressing star one again. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions.

Your first question comes from the line of Craig Siegenthaler with Bank of America. Your line is open. Please go ahead. And a gentle reminder to unmute locally. Your next question comes from.

From the line of Dan Fannin with Jeffries. Your line is open. Please go ahead.

Thanks. Good morning. So I guess Bill wanted to follow up on the last kind of comments you made around Howard Hughes and the insurance opportunity. Obviously, that's a very competitive market. So I was hoping you could talk to Howard Hughes' right to win in this type of environment where rates are obviously moving higher and there's, as I said earlier, a quite competitive environment. So I'd say a few things. One, we acquired Vantage because it's a diversified platform. It participates today in a couple dozen lines of insurance. And Mark is actually going to expand the number of markets in which the company competes. It's also a very small insurance company today with a relatively modest amount of capital, which means we can pursue the opportunities that are interesting pockets of opportunity insurance markets and find profitable places to do business. I would say Mark is he's quite encouraged about the opportunity set as he sees it. In terms of rates, if you're referring to interest rates, obviously if policy rates are going up, that's good for insurers. If interest rates are going up, that's generally bad for insurers. What we did is within days of acquiring the company, we sold Bench's entire kind of fixed income portfolio and replaced it with a less than 90-day short-term treasury portfolio. So there really is no interest rate risk embedded. In vantage, and we took the sort of excess capital, once we set aside capital equal to the float in short-term treasuries, we took a chunk of the balance and we've invested in a common stock portfolio where we've actually made meaningful progress.

That portfolio is up, I think, something like 6% since we made the investment. So we've made good progress on the investment side, right? If you think about a fixed income portfolio, had Vantage kept the portfolio they were in over the following four months, it would have lost meaningful value. We've increased the value of the portfolio by the approach that we've taken. But one of the benefits of being a relatively small company bringing in a management team of this kind of credibility is Mark brings not just acumen, but relationships and ability to recruit talent and therefore an ability to see business that we wouldn't have been able to see without Mark.

Great thank you. Your next question comes from the line of Kenneth Lee with RBC Capital Markets. Your line is open. Please go ahead. Hey good morning and thanks for taking my question. Just one on the PS Ventures fund vehicle maybe to talk about some of the next steps and perhaps timeframes when you can start.

Great. Very helpful there. And just one follow up, if I may. As you look at your existing investment portfolios, which holdings or which investments do you see having the most potential upside or longer term growth opportunities? Thanks. So the investment we own that has the most upside is Fannie Mae and Freddie Mac. These stocks are down 60% this year on disappointment that the president has not moved forward or made really any announcements. There was a lot of excitement last year. Stocks went up basically eightfold from the time the president was elected and then have declined very significantly. But the businesses. have continued to perform extremely well. Capital has been restored to levels that we believe the businesses are ready to be released. It's something that I think the administration did not want to spend any time on or get in the headlines before midterms. The fear of just even a discussion about Fannie and Freddie could possibly increase mortgage lip rates, which would be a negative for obviously midterm elections. The Treasury Secretary has said this is something to be addressed in the balance of the president's terms. So that's the investment that has the most upside, and it is material. We own more than 200 million shares of the two companies combined. We believe the stocks are trading at a small fraction. These are 10x potential. The rest of the portfolio also offers very significant potential over the next couple of years, but it's a double, if you will, over a several-year period of time as opposed to a 10x. But in terms of individual names, I mean, Ryan,

I think kind of using that framework of earnings growth and multiple expansion, when we look across the portfolio, while clearly everything that we own today we're very excited by, otherwise we would have found something else that we were more excited about that we could have purchased, one name that I will call out among the kind of core holdings, if you will, is Uber. Uber is the fastest-growing business in our portfolio. We've kind of put in a letter that we think the company should have sort of a 25% plus earnings per share growth over the next three to five years. And if that company were valid, valued at a multiple that we believe were correct today, then you would think that if we're right on the earnings per share growth of that 25%, that would sort of have a kind of 25% rate of return over that period of time over the next kind of three to five years, which would actually be better than that kind of double that we would expect, you know, from the portfolio as a whole. Interestingly, that's before there's any adjustment to the model. Exactly right. Interestingly, Uber actually is a company that trades at one of the lowest multiples in our portfolio, despite having the highest amount of growth over the next three to five years. It's about a the highest amount of growth over the next three to five years. 16 times earnings, which is the lowest multiple the company is ever traded at in its history as a public company. And we believe that that is misplaced. It's really reflective of kind of two fundamental risks. One is people are concerned about kind of AVs and the impact that they may have on Ubers business. And the second would be kind of this more agentic commerce, kind of, if you will, the muse-like agentic agents that book it. In both of those scenarios, we've done a lot of work and continue to do a lot of work over this investment, which we've now held for close to two years. And we believe that both of those things may actually make Ubers.

business stronger for the simple reason that in different ways, they both actually expand Ubers addressable markets, which would allow for faster growth without causing any disruption to what we believe are some very strong moats around the business. And so in short, if Uber can grow its earnings about 25% a year, and the multiple can expand from 16 times to something that is significantly in excess, Uber could be one of our best investments that we have made any long period of time in the core portfolio. Another way to think about that particular opportunity on kind of a shorter term basis is if you take annual assessments, I think there's a lot of consensus. The earnings will grow about 35% over the next 12 months. If you own a stock at 16 times earnings and it stays flat for the next 12 months and earnings grow at 35%, it'll be trading at something like 12 times earnings 12 months from now. I just think the probability of that is extremely small. Ultimately, businesses tend to intrinsic value is like a tether. The business gets pulled to intrinsic value over time, unless we're wrong on intrinsic value. Actually, I think it might be useful. I've been spending a couple minutes just talking about how we, you know, the big overhang on Uber stock today is the perception that Tesla will just take over the world. This could be one autonomous vehicle player or possibly two, and people will go to the Tesla app as opposed to use the Uber platform. What's our argument against that? Sure. So the main risk has historically been Tesla using AVs. And increasingly, some people

are concerned that perhaps Waymo, which is a subsidiary of Google, may be building up its own fleet. Ultimately, the concerns relate to the fact that these companies have the ability to create their own unique cars, and those cars will create an own network, and therefore people won't need to go to the Uber app in order to get rides, but rather they'll go to these AV players directly, and those AV players will not partner with Uber. Our perspective is that at the end of the day, Uber has access to significantly more vehicles and drivers than Tesla and Waymo, and really the collective aggregate of any AV companies that are to come could ever have. And if you think about this from a rider's perspective, riders really care about two things. One is they care about having a quick ride show up at their door, and second is they care about a reasonable cost. The fundamental problem in these supply demand networks is that you need to have as much supply in terms of cars as you can possibly have in order to make sure that riders are able to get good prices and that riders are able to get them quickly. And so the way that we sort of think about it is ultimately AV will be a compliment, but not a substitute for human drivers because there are just way more human drivers than there could ever be AV cars. What that means is that it's in the best interest of Tesla and Waymo in order to partner with Uber over time to make sure that their vehicles get better capacity. One thing that's important to think about is that from Waymo and Tesla's perspective, it is very expensive to build these cars. And therefore, you want to make sure that these cars have high utilization rates. And so joining a network where you can make sure that somebody is riding in your car for a significant number of hours per day is very important to ultimately earning reasonable returns on capitals. There are some additional elements in

terms of thinking about differences in technologies which may or may not be as close to fruition in making these vehicles widespread and regulations and other things in terms of just logistical issues about how do you clean the cars, how do you charge the cars, how do you make sure if someone loses something you can actually get back to them where Uber's logistical capabilities are very important but at the end of the day it's about making sure these cars are best utilized which we think means the existing network with enormous amounts of supply and demand is where everybody sort of wins the most. If we're right about that, longer term you could invest in a scenario where more people are taking cars. The population that is using rideshare today in terms of the number of miles it's driven is close to a percent or percent and a half, something like that. And we think that that figure could grow pretty meaningfully over time if we can have more cars available at lower prices to people. And so we think that that ultimately means Uber has a very valuable role to play in that network longer term. But people are concerned about competition mainly because Tesla and Waymo are in select markets where we think it's the easiest. For them to prove their concept are working in some markets independently and haven't yet partnered with Uber in Tesla's case. And then in Waymo's case have partnered with them in some markets and not others. But based on all the work that we've done as well as just sort of our view about how the future is likely to evolve. We think it's very likely that Uber's role continues to remain important. And we think that the market growth is going to be even higher than what we and many people expect in the future.

Just to add to what Ryan's saying, it's not... Demand for mobility is not constant. There are peaks and valleys. You need to be able to serve the customer at peak. Obviously, when they're going to work in the morning, coming home in the evening, Saturday night, Friday night, I think sort of New York City, to build... You can't economically build an autonomous vehicle fleet large enough to handle those peaks and deliver a good customer experience and have it earn an economic return on investment. One other... The interesting fact on Uber is people talk about it almost entirely as if it's a mobility business. Approximately half the business today is food delivery. If you value the food delivery or the comps trade, today you're paying almost nothing for the kind of core mobility business. So extraordinarily cheap stock. And it's worth actually... I would say most alternative asset management companies wouldn't go deep on any particular company in their portfolio because it's not that relevant. In our case, a concentrated portfolio drives the ultimate value of this portfolio. And we have realization events on a real-time basis because we mark-to-market the portfolio every day, and we get paid based on mark-to-market performance. Let's go to Jill to the next question. Operator?

Your next question comes from the line of Dan Weldon with Wells Fargo. Your line is open. Please go ahead.

You know, some of the uncertainty associated with any of these kinds of bets. We used the beauty of credit default swaps is that there's no premium. You don't pay a premium for volatility. So they're sort of volatility neutral. So it's really just a contractual bet on an outcome. The negative with interest rate swaps is it's very dependent on, you know, the level of vol in the market as to whether the payoffs are large enough. The closest we came to putting on one of these bets in in the existing portfolio was, I would say, late last year, early this year, when we said, look, it's likely that we're going to have some kind of war in Iran that's going to lead to a spike in oil prices. Is there a way to hedge that event in a way that made sense? And the problem was that the rest of the world was aware that there was a likely war in Iran that would lead to higher oil prices and also because of the uncertainty, volatility was high. So we looked at a number of potential structures. And if you got it precisely right, you might have made three times your money if you bought a one month. And if you got it, you might have made three times your money. And you had a friend in the administration who leaked to you that were going to war. I mean, that would be the best way to make money there. So we did nothing. We have nothing on today. We spent a lot of time thinking about risk, geopolitical risk, political risk. There are things that we worry about. I worry about AI. And I think the probability of a very significant cyber incident is, we've been saying for a while, you're starting to see pretty soon.

significant cyber events. A bunch of military bases have their refrigerators turned up to 100 degrees. It sounds a little bit scary, but not entirely frightening. I think we're going to have some other frightening events. Now, the problem is, we've not yet identified an efficient way to hedge that kind of outcome. And volatility is generally very high. So in terms of our launching a vehicle like this, our first focus is on Pershing Square Ventures. We think that it could be a very successful goal. Entity and something we want to do first. My preference on the asymmetric fund would be to do it after the next big win we have. But we could certainly choose to do that later next year. So that's still an open question. But it's sort of a very unusual fund in that it's something you don't need to think about. Think about it as your money market account and getting a decent yield while you wait. And then every once in a while we're going to put capital to work and hopefully make a big pile of money for investors. Great. Thank you for that caller. Sure. A reminder, if you would like to ask a question, please press star one. Your next question comes from the line of Craig Siegenthaler with Bank of America. Your line is open. Please go ahead. Good morning, Bill Ryan. Hope you're both doing well. Doing well. So our question is on Howard Hughes.

There are markets where pricing is unattractive. And so I think to Bill's point, we're going to try to focus our areas where there's a lot of attractive pricing growth. One of the nice things about Vantage is small scale is if you're a small player in the market overall, and then you have several different business lines, you can actually move the needle on attractive areas pretty quickly. How do you do that? Well, one of it is that you can take your existing team where we have businesses that are at smaller scale, and we can use that in order to write a lot more business. And that can happen pretty efficiently with insurance, because if you offer a price that people are willing to accept that you think, it's a good price, and they agree, you can grow your business pretty quickly as long as you have the amount of capital. The second way you can do it, though, is you can move into adjacent lines, where you're looking at one type of business, and you think that there may be a market that would be a different customer set or different industry, but the same type of business, you can go hire a new team to be able to start in that business. And it's easier to do that when you're, you know, riding on order of magnitude, a billion and a quarter premiums than if you're kind of a very large company riding $12 billion of premiums. And so we have that sort of lack of of a large business to really help move our growth when we decide to expand in these areas. The third opportunity, though, and this is where I think Mark is really helping move the needle as well, is we're a small company where we have been able to hire good talent, but I think Mark is taking it to the next level where we can bring in some really incredible names to oversee some of the larger businesses that we could ultimately build over time where they've worked at very large companies, where they've built these really incredible businesses. And now because of Mark's reputation, experience,

in the industry, they're willing to come work for us Advantage, and they can really replicate those things. And, you know, the way I sort of think about the business at a high level is you have the insurance business, primary insurance, where a lot of my comments are that ultimately you need to establish new teams that are close to the markets, you need to work in new divisions. And then you have the reinsurance business where it is much more, it's much easier to write large amounts of business when you really want to move in aggressively because you think the price is right. And you can actually do that without having to hire incredibly large teams. And so I think we have on both sides of the business, the ability to really pick our spots. But those spots that we pick can really move the needle on both the insurance side as well as the reinsurance side. Next question, please. Operator. Your next question comes from the line of Edmundo Yepes with Armada Capital. Your line is open. Please go ahead. I do.

Growth of people's capital. So restaurant brands across its different collection of individual brands has the ability over time to grow at about a 5% rate. It's growing a little slower than that as they repositioned a few of their businesses, but the management team is very confident that they'll be able to ultimately return that to about a 5% level of growth. And that's really, in our view, 5% growth that doesn't require a dollar of capital that can be very accretive to earnings. One of the things that's important to us when we talk about the types of businesses that we want is to have a business with a high degree of confidence, which we think a royalty business like restaurant brands is, also to have an element of growth, which we think the unit growth story I just outlined provides, but also the management team. So one thing that's important to mention here, this business has recently attracted over the last handful of years, one of the two, I would say, best restaurant industry executives of all time, which is Patrick Doyle. If you go study the history of Domino's, it's one of the most successful turnarounds under Patrick's leadership really in the 2010s and has been sort of emblematic, I think, think of the success that a lot of restaurant companies would like to achieve. Patrick in the last several years has joined us as the executive chairman of restaurant brands and is really helping imbue a lot of these success factors that he had at Domino's and to the restaurant brands itself. And so what we've seen since he has joined is a company that's been able to reposition its business to even have more success. The company actually has laid out a framework where they believe they can grow their operating profit about 8% a year, which they have been successful in achieving the last several years. They also think that they're going to be able to achieve

to continue to buy back shares, which we like. They pay a very attractive dividend, nearly 4%. And when you add all that up, we think we get a relatively low risk, high return on capital, high margin business with great leadership that should be growing as kind of earnings per share and including as dividend at something around a 15% rate. It's trading for only 17 times earnings, which we think is a multiple that is very low in light of all the factors that I just mentioned. So we've owned this business for a while. It's been a successful investment over our period of ownership. It's actually one of the businesses that we've owned the longest. But we continue to be really excited by it and how they're making the business better and the leadership of the company.

Is there an index inclusion initiative on your side? It's not like the peers or startups or whatever that are part of the S&P. Is there like a push from your side to include an index or is that part of the business? Yes, it's definitely something we spent time with management and management certainly understands the opportunity today. I mean... We believe among the reasons why Restaurant Brands is a cheap stock, it's not in the major indices because it's normally a Canadian domiciled company. Fundamentally, the company is really headquartered in Miami and we do think there is an opportunity for the company to be eligible for listing in major indices. Now, in the meantime, companies compounding in value, they're actually buying back some stock. They'll be able to be more aggressive in buying in shares once they achieve their ambition of being an investment grade company. So we think it's a good story. Stock's been largely flat for a bit too long. But a lot of that has been driven by really multiple compression while the business continues to compound. So we think those lines cross in a good way over the next several years. Thank you both. Your next question comes from the line of Mike Brown with UBS. Your line is open. Please go ahead.

and, you know, some names that you've, you know, heard of. And then we also have some earlier stage, very interesting companies. Basically what we did is we took the, I've been an active venture investor for 16, 17 years. The team kind of reviewed sort of my personal portfolio and they picked their favorites. We're giving kind of the best of my venture investments plus investments. We mentioned in the presentation, we've approaching a hundred million of capital deployed recently. And some pretty interesting investments. You know, the good news is that founders want Pershing Square as an investor. So I would say there's probably no deal that we won't be able to get access to. And, you know, we're meeting with teams and companies and thinking about how we can be a value added investor to them, you know, to justify the opportunity to invest in some really interesting private companies. So, you know, figure 500 million to a billion, let's assume it comes into existence. by the end of Q1. And there's some pretty interesting companies in there that people are excited to own. And then we have some pretty interesting ideas about how we're going to take this entity public in a manner that benefits all of our, you know, our most loyal investors. So we'll have more news on that when we make the filing for this entity, which I think is in a week's timeframe. We haven't precisely determined the date. Okay, great caller. Thank you. Thanks for all that, Bill.

Maybe just, maybe one for more of the model here. Actually, let me add one. Let me just add one more thought to that. So while this entity is starting small, the beauty of Pershing Square Ventures is it will grow its value NAV over time with obviously the, if we're right and we've done a good job in selecting good companies, you know, these are businesses that have much higher growth rates than companies we invest in traditionally. So business value can grow. More quickly, these businesses will, you know, bulk of the capital are going to be invested in companies that are more likely to go sooner, public sooner rather than later. And so we get the benefit of the compounding of the underlying assets. And I think because of the scarcity, you know, the public market investor today, you know, one of the disappointing things for public market investor, typical retail investor is while SpaceX is an amazing company, their first chance to invest in SpaceX was about a billion, I'm sorry, a trillion, a trillion. 100 billion or so, $1.7 trillion valuation. They would have loved to invest at $100 billion valuation, but we're going to, our goal is to find the next SpaceX's and give the retail investor, the public market investor, and really even institutional investors, the opportunity to access those companies. I believe that will enable versions where ventures to trade well, i.e. trade at a premium to its underlying NAV. And that also gives us the flexibility to raise additional capitalization.

So the vehicle we expect will grow with compounding, much like our existing vehicles, but also with the potential to raise capital that we can then deploy. So while it will start out at something less than a billion dollars in scale, we think you can actually grow reasonably quickly to become an important contributor to the profitability of Pershing Square.

Okay, great. Thanks for that additional color. Yeah, so I just wanted to ask on the expense side just for the model here. The expenses came in lower than we were expecting this quarter, and this is your first full quarter as a public company. So maybe how should we think about your GNA growth from here into 2027? Just any guidance that would be helpful. Thank you. Sure, thanks for the question, Mike. So I think as we try to point out in the letter, important thing to think about for the third quarter and also for the fourth quarter is that we are lapping some costs in last year's third quarter. And we'll also do the same in the fourth quarter where we had ultimately some severance costs we prepared as well as, you know, some signing bonuses and other things and some costs that we incurred even on the GNA side in order to position ourselves to go public. And so while we have had, as we talked about in the Q2 letter, some additional growth, both in terms of headcount as well as kind of new public company costs, I would say in this quarter with our expenses down 1%. And, you know, I think for next quarter, it's possible you'll have something kind of similar in terms of year-over-year growth. That's really just reflecting the fact that we have these lapping from prior year expenses. I would say as we move into 27, we will not have nearly as much of those lapping expenses. And so you'll start to see some of the increase in our cost structure that was really, we think about as more one-time, that's come in for the additional headcount and some other public company costs. But that's been a little masked in the third quarter and will also probably be masked to some degree in the fourth quarter.

Yeah, I'd say just very high level, the vast majority of them. of our expense is compensation expense. But because of how we've structured Pershing Square, those compensation expenses almost entirely off balance sheet. All right. So we've, you know, the public company GNA, the true economic GNA is something in order of 50 million a year. We think that grows nominally with inflation. But, you know, the, the, if you will, bonus and incentive compensation really is coming off of the promote compensation that we've kept off balance sheet. We've, you know, again, the public company receives the incentive fees on the first five percentage points of return and management is paid with the incentive fees on returns above 5%. And, you know, that model, the attractiveness of it, it makes both our, it makes our expenses, you know, you're not going to be shocked about what our expenses are each quarter. It shouldn't be a meaningful surprise. And, you know, because of the nature of the business and the market nature of the underlying assets and the fact that our funds are all public, you know, at the end of the quarter, you should be able to calculate our revenues with a pretty high degree of accuracy. So I don't expect, you know, while there was a little bit of a surprise, if you will, here on our expenses being lower than expected, and that kind of surprise is never a bad one. Once we get through the kind of public company, you know, lapping of some costs related to when we went public, I expect there shouldn't be much in the way of surprise with respect to our expense structure going forward. And if there's something of significance, we'll let you know about it.

Okay, great. Thank you both. Thank you. There are no further questions at this time. I will now turn the call back to Bill Ackman for closing remarks. Thanks so much for joining the call. It sounds like we did a good job of the letter in that we answered a lot of the questions in advance. We gave, you know, it gave us a lot more time to answer questions from analysts and investors. At 1030, we have part two. The call is open to

really anyone who wants to ask a question. And how does one ask a question? Fran, why don't you explain? Sure. You can ask a question by dialing in using the details on Bill's pinned post on his Twitter. The details are also available on the Pershing Square Inc. website. And also, you can reply to my tweet. We'll be monitoring that and building up a bunch of questions. That's right. We're doing it this way because we had some technical challenges last quarter responding. to questions directly on Twitter. But this will be broadcast on Twitter. And also, we welcome your questions live. And we'll see you at 1030. Thank you. This concludes today's call. Thank you for attending. You may now disconnect.