Pershing Square Inc "Ack to the Future: Initiate at Neutral" (Neutral) Brown

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Pershing Square Inc "Ack to the Future: Initiate at Neutral" (Neutral) Brown

Pershing Square Inc UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: Can PS sustainably grow earnings at a double digit pace through 2028?

Yes. PS can compound AUM through appreciation and new fund launches, with fees scaling

alongside NAV and modest returns generating recurring income. A mostly fixed cost base creates

strong operating leverage, especially following the $5B PSUS raise, which delivers a step change in

AUM. We forecast average annual earnings growth of nearly 30% through '28E.

Q: Does PS have the ability to deliver FRE CAGR beyond peers?

Yes. We believe the nature of the permanent capital base will deliver FRE growth CAGR '26E-'28E of

30%, exceeding our estimates for alternative asset manager peers by nearly two times. Driving this is

PS not having to rely on continuously fundraising to backfill outflows, which have potentially dilutive

impacts on an existing capital base. When PS does raise additional funds, it can do so without the

need to expand headcount significantly, thus driving robust operating leverage.

UBS VIEW We initiate coverage on PS with a Neutral rating. FRE growth is supported by compounding AUM and

recurring revenue streams from premanent capital base. While the permanent capital base reduces

reliance on future fundraising—a structural positive—any future capital raise will remain

performance-dependent. That said, the launch of PSUS materially enhances the pathway to higher

earnings and positions the firm to better leverage its brand domestically. The latter of which is

important given Bill Ackman's appeal to retail investors which warrants a management premium in

our view.