Pershing Square Capital: “HHC is Successfully Executing on the Vast Long-Term Value Creation Opportunity”

Pershing Square Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. An annual portfolio net return of 26.9% was recorded by the fund for the whole year of 2021, versus the S&P 500 Index, the FTSE 100, and MSCI World Index that delivered a 28.7%, 17.4%, and 22.3% return respectively for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Pershing Square Capital Management, in its Q4 2021 investor letter, mentioned The Howard Hughes Corporation (NYSE: HHC) and discussed its stance on the firm. The Howard Hughes Corporation is a Woodlands, Texas-based real estate development and management company with a $5.1 billion market capitalization. HHC delivered a -7.83% return since the beginning of the year, while its 12-month returns are down by -5.73%. The stock closed at $93.81 per share on February 19, 2022.

Here is what Pershing Square Capital Management has to say about The Howard Hughes Corporation in its Q4 2021 investor letter:

“HHC is successfully executing on the vast long-term value creation opportunity within its core master planned communities (“MPCs”).

Redeployed proceeds from non-core asset sales into an MPC acquisition.

-Announced $600 million acquisition of Douglas Ranch in Phoenix, Arizona(1)
-Shovel-ready, 37,000-acre MPC entitled for 100,000 residential homes and 55 million square feet of commercial development
-Non-core asset sales have generated $376 million in net proceeds

Accelerating growth as an MPC-focused company

✓ MPC land sales continue to benefit from migration to suburbs and open spaces in lower-tax states like Texas and Nevada
✓ Robust recovery in operating assets with NOI back to pre-COVID levels
✓ Ward Village’s eighth condo tower is 64% pre-sold within two months of launching sales
✓ Announced a $250 million share buyback program.

HHC’s share price increased 29% in 2021 and has decreased 7% year-todate in 2022.”

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Our calculations show that The Howard Hughes Corporation (NYSE: HHC) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. HHC was in 27 hedge fund portfolios at the end of the third quarter of 2021, compared to 25 funds in the previous quarter. The Howard Hughes Corporation (NYSE: HHC) delivered a 2.78% return in the past 3 months.

In January 2021, we also shared another hedge fund’s views on HHC in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.