Bill Ackman on Compounding

Pershing Square Holdings, Ltd. 1 Company Overview The Company Pershing Square Holdings, Ltd. (“PSH”, or the “Company”) (LN:PSH) (LN:PSHD) is an investment holding company structured as a closed-ended fund principally engaged in the business of acquiring and holding significant positions in a concentrated number of large capitalization companies. PSH’s objective is to maximize its long-term compound annual rate of growth in intrinsic value per share. PSH was incorporated with limited liability under the laws of the Bailiwick of Guernsey on February 2, 2012. It commenced operations on December 31, 2012 as a registered open-ended investment scheme, and on October 1, 2014 converted into a registered closed-ended investment scheme. Public Shares of PSH commenced trading on Euronext Amsterdam N.V. on October 13, 2014 and were delisted from that exchange on January 31, 2025. On May 2, 2017, PSH’s Public Shares were admitted to the Official List of the UK Listing Authority and commenced trading on the London Stock Exchange (“LSE”). PSH has appointed Pershing Square Capital Management, L.P. (“PSCM”, or the “Investment Manager”) as its investment manager. PSCM was founded by William A. Ackman on January 1, 2004.

Pershing Square Holdings, Ltd. 7 Investment Manager’s Report LETTER TO SHAREHOLDERS(5) To the Shareholders of Pershing Square Holdings, Ltd.: In 2025, Pershing Square Holdings generated NAV performance of 20.9% and a 33.9% total shareholder return as a result of the narrowing of the discount to NAV at which PSH shares trade.6 In comparison, the S&P 500 generated a total return of 17.9% for the year.7 Investors who invested in Pershing Square, L.P. at its inception on January 1, 2004 and transferred their capital account to PSH at its inception on December 31, 2012 (“Day One Investors”) have grown their equity investment at a 16.2% compounded annual NAV return over the last 22 years compared with a 10.7% return had they invested in the S&P 500 over the same period.8 With the power of compounding, our 16.2% compounded annual NAV return translates into a cumulative total NAV return since inception of 2,644% (27.4 times) versus 836% (9.4 times) for the S&P 500 over the same period. Using PSH’s stock price return rather than our per-share NAV performance, Day One Investors have earned a 14.9% compounded return, a 21.1 times multiple of their original investment.9 This lower return reflects the 24.1% discount to NAV at which PSH’s stock currently trades.

; Thom Lachman, the Chairman and CEO of Duracell, a Berkshire Hathaway company; and Jean-Baptiste Wautier, the former Chairman of the Investment Committee and CIO of BC Partners, a large European private equity firm. JB also serves as a director of PSH. Our long-term objective is to transform HHH into a modern-day Berkshire Hathaway: a diversified holding company built upon a foundation of high-quality, durable growth companies that can compound their intrinsic values at high rates over the long term. In December, HHH took an important step forward in executing its new strategy by entering into a definitive agreement to acquire Vantage Group Holdings, Ltd. (“Vantage”), a specialty insurance and reinsurance company, for $2.1 billion. We believe Vantage is an ideal platform to begin HHH’s transformation. It is well diversified across specialty lines of insurance, has an excellent and experienced management team, and benefits from established regulatory licenses, strong credit ratings, and a growing presence in the market. In light of its short operating history – Vantage was launched in 2020 – it has limited risk associated with long-dated legacy insurance exposures. The Vantage acquisition is expected to close in the second quarter of 2026, subject to regulatory approvals. The transaction will be funded with approximately $1.2 billion of cash from HHH’s balance sheet, together with up to $1.0 billion of preferred equity from PSH (the “HHH Preferred”).

The HHH Preferred is structured to provide bridge equity to HHH while offering PSH a return similar to a direct investment in Vantage plus a small premium in the likely event it is repurchased by HHH over the next several years. If HHH does not fully repurchase the HHH Preferred from PSH, it converts into common stock in Vantage at the initial acquisition price, and PSH has registration rights which can facilitate a public listing of the company. As part of our services arrangement with HHH, Pershing Square will manage the assets of Vantage for no incremental cost. We intend for Vantage to invest 100% of its insurance float in short-term U.S. Treasurys, and over time, its surplus capital in common stocks, similarly to how Berkshire Hathaway has managed its insurance subsidiaries’ assets. We expect that our approach to managing Vantage’s assets will allow it to earn a substantially higher return on equity than a typical insurer, which should enable it to compound its book value at a high rate over time. If we are successful in achieving our expectations for Vantage, it will materially accelerate HHH’s growth profile, diversify the sources of its revenues and earnings, reduce its cost of capital, and accelerate HHH’s long-term growth in intrinsic value and share price. The Current Economic and Market Backdrop We believe that 2026 could be a very strong economic year. There are a number of geopolitical, economic, and political factors and forces that contribute to our view.

We invested in out-of-the-money interest rate swapYons in December 2020 and early 2021 because we believed that it was likely that the combinaYon of aggressive fiscal policy, monetary policy, and the reopening of the economy due to vaccines would cause non-transitory inflaYon, which would require the Federal Reserve to raise rates. We believed that an unexpected rise in rates could cause a market correcYon. We viewed this outcome to be a likely one, yet the opYons we purchased implied that this scenario was very unlikely. Highly differenYated perspecYves on future outcomes can yield aIracYve payoffs for investors, parYcularly when structured in an asymmetric format. Fortunately, all of our porTolio companies are extremely high-quality businesses that can withstand inflaYon as they have the ability to price their highly desirable products, services, and assets to preserve their profitability in an inflaYonary environment. We do not believe that the recent move in rates has had any meaningful impact on our companies’ intrinsic values. As such, we believe that our porTolio companies trade at an even more material discount to their intrinsic values, parYcularly in light of recent, market-driven, price declines. While we do not know what the stock market will do tomorrow, next month or even over the next year or two, we believe that our companies will conYnue to compound their intrinsic values at high rates for the long term. We are pleased to add NeTlix to our porTolio.