Pershing Square Holdings secures fee reduction in voting rights deal

Pershing Square Holdings Ltd on Wednesday said its investment manager had agreed to lower fees, in exchange for sole voting rights on an investment in Howard Hughes Holdings Inc.

PSH, a Guernsey-registered investment trust and financial services firm, is overseen by New York-based hedge fund manager Pershing Square Capital Management LP.

PSH’s board approved an amendment proposed by PSCM to reduce management fees. As part of the deal, PCSM is taking sole voting authority for PSH’s shares in HHH.

Back in May, PCSM and parent company Pershing Square Holdco LP paid $900 million to acquire around 46.9% of HHH, a Woodlands, Texas-based real estate company founded by aerospace magnate Howard Hughes.

The stake is collectively owned by the parent company, PCSM and funds which include PSH, Pershing Square LP and Pershing Square International Ltd.

HHH has agreed to pay for PCSM’s management services, which is part of the reason for lowering fees charged to PSH. Effectively, PSH’s stake in HHH cancels out fees owed to the investment manager, since the reduction will equal fees paid by HHH which are attributable to PSH.

PSH, the other funds, and PCSM have appointed their parent company as designated proxy voter for the investment.

The arrangement follows confirmation from PSH on Tuesday that it will raise its third-quarter dividend to 16.46 cents per share, around 13% higher than 14.56 cents a year ago.

PSH shares were up 0.5% to 4,092.00 pence on Wednesday morning in London and have risen 17% in the past 12 months.

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