PSH-Annual-Report

Annual Report Year Ended December 31, 2014Richard Battey took on the role of Chairman of the Audit Committee. The members of the Board haveconsiderable and relevant experience in listed and unlisted funds and companies. Although the Boarddoes not approve individual investment decisions made by the Investment Manager, we do haveresponsibility for overseeing the investment process and reviewing the investment portfolio. The Boardalso monitors the Company’s exposure to risk.The Board reports in detail on corporate governance matters and delegation of responsibilities later in thisAnnual Report.The Company has recently joined the Association of Investment Companies (“AIC”) and complies with theAIC Code, except where otherwise indicated herein.PREMIUM / DISCOUNTThe Board monitors the trading activity of the Company’s shares on a regular basis. The Companypublishes its NAV weekly on its website together with monthly performance reports disclosing certaininformation with respect to the Company’s underlying positions, which are predominantly in large caplisted companies. The Board and the Investment Manager believe that this transparency will help theCompany’s shares trade over the long term at or above NAV.In the period following the IPO through January 31, 2015, the Company’s shares traded at an averagediscount to NAV of 7.1%. We believe that the primary sellers impacting the share price were event drivenhedge funds that bought shares in the IPO and were under pressure to generate liquidity because ofmarket volatility shortly after the IPO. During January 2015, the Investment Manager organised meetingsto explain the Company’s strategy to potential investors and we believe this increased demand for theshares. By late January 2015, most of the investors mentioned above had sold their positions and thediscount narrowed significantly through February 2015. The average discount to NAV in February 2015was 3.6%. The Board will continue to monitor the performance of the Company’s share price versus NAVper share and the Investment Manager is committed to an ongoing, pro-active global investor relationseffort.PSH NAV vs. Trading Price (October 13, 2014 – February 28, 2015)Share PriceNAV per Share$29$28$27$26$25$24$23$22$21$28.17$27.1610/13/1410/23/1411/2/1411/12/1411/22/1412/2/1412/12/1412/22/141/1/151/11/151/21/151/31/152/10/152/20/15PERSHING SQUARE HOLDINGS, LTD. 3