Howard Hughes Holdings Q2 2026 Earnings Call Transcript

Howard Hughes Holdings (NYSE: HHH ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary Howard Hughes Holdings reported a strong second quarter, with net income increasing by 94% year-to-date and underwriting income doubling from the prior year.

The company is transitioning from a pure-play real estate company to a diversified holding company by acquiring Vantage Holdings and focusing on the insurance business, inspired by the success of Berkshire Hathaway. Future strategic plans include increasing the allocation of capital to their new insurance business, optimizing investment strategies, and exploring joint ventures and third-party capital to reduce reliance on existing high-cost capital. Real estate operations continue to perform well, with significant condominium closings and land sales contributing to financial flexibility and cash generation.

Management emphasized the importance of disciplined capital allocation and expressed excitement about the potential synergies between the real estate and insurance operations. Full Transcript OPERATOR Good day and thank you for standing by. Welcome to the Howard Hughes Holdings second quarter 2026 earnings call. At this time, all participants are in a listen-only mode.

After the speakers' presentation, there will be a question-and-answer session. To ask a question during that session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Joseph Valane, General Counsel and Secretary. Please go ahead.

Joseph Valane, General Counsel Thank you. Good morning, and welcome to the Howard Hughes Holdings second quarter 2026 earnings call. With me today are Bill Ackman, Executive Chairman; Ryan Israel, Chief Investment Officer; David O'Reilly, Chief Executive Officer; Carlos Olea, Chief Financial Officer; and Mark Grandison, Vantage Executive Chair and Howard Hughes Holdings Director. Before we begin, I would like to direct you to our website, where you can download both our second quarter earnings press release and our supplemental package.

The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today in relation to their most directly comparable GAAP financial measures. Certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meaning of the federal securities laws. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved.

Please see the forward-looking statements disclaimer in our second quarter earnings press release and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law. I will now turn the call over to our Executive Chairman, Bill Ackman. Bill Ackman, Executive Chairman Thank you, Joe.

Before we talk about the quarter, I thought, in light of the significance of events over the last few months for the company, I just want to give a little background on how we got here. In May of last year, Pershing Square acquired $900 million of stock in Howard Hughes at $100 a share, increasing our ownership to 47% of the company. I became Executive Chair, Ryan became Chief Investment Officer of the company. And we said, look, our goal is to turn Howard Hughes, a pure-play real estate company, into a diversified holding company.

And our business plan was to acquire an insurance operation, to find a platform that we believed that we could build into a highly profitable and very successful company, and one where Pershing Square's investment capability could add material value. Within about six months or so, we identified and most recently closed the transaction to acquire Vantage Holdings. We purchased the company at a fair price. It was not a bargain purchase.

It was a platform that had been built over the previous five years led by two very successful private equity firms. We had an opportunity to acquire it, and it fit very well with our long-term ambitions. Our initial thoughts on going into the insurance business were really driven by what Warren Buffett and what Berkshire Hathaway has achieved over a very long period of time. And as part of that thinking, we reached out to a guy named Mark Renison, who we had met maybe two and a half or almost three years ago and someone we greatly admired in the insurance business.

And we thought, you know, when we were trying to make a decision whether to acquire a company or to build one from scratch, we looked to Mark for advice. Mark was sort of on the beach. He wasn't sure whether he was prepared to go back into the business. He gave us excellent advice, but we went sort of our own way in acquiring Vantage.

Since the acquisition, Mark has further in his retirement, and we got him to join the board of Howard Hughes. And it was very clear from the first day he joined the board meeting his passion for the industry. So it's been a cultivation—or a seduction, for lack of a better word—to try to get Mark a little bit more involved. And then we had a stroke of luck, which is that David Gansberg, who was kind of co-president of Arch, someone who was in line with the potential CEO role of the company, was actually let go by Arch.

He did not win the battle for CEO, but he was a favored choice of Mark. And that created really an opportunity for us. Where Mark was not prepared to come in and be CEO of an insurance company—with, effectively, his right-hand guy stepping in as CEO—he was prepared to take a more significant role in the company. And with that, we announced Mark became Executive Chair of the company.

David has a non-compete until June, or I guess early June, of about 10 months from today. And we now had really our dream team in the insurance industry. And that's not to diminish in any way Greg Hendrick or anyone in the Vantage operation. But if you look at the 25-year history of Arch, where from 2001, Mark an important younger member of the team, and to all the value and learnings over that period of time, to his becoming CEO and building one of the best records in the insurance industry.

If you look at Pershing Square over time, our most successful investments have been finding a great business and then finding the best person in the world to run that company. And when we've combined those two things, whether it was at Chipotle or at Canadian Pacific or other businesses, that's really when the magic. And we couldn't resist the opportunity to recruit David and to get Mark in place at the company. So it's a very, very material announcement.

The other thing that I have experienced over time: when you get someone who's run a large enterprise or, for example, someone who's managed a large investment portfolio, and then you've given them a much smaller operation, the magic they can achieve from that kind of base level is really remarkable. And I think the same thing really applies. We have a team, a senior leadership team with enormous horsepower stepping into a very small, very young operation. And we're very, very excited about what can be achieved.

The market does not yet understand the significance of this announcement. Now, the other important fact is now that we have the dream team in place, we need to do everything we can to raise—to inject—more and more capital into Vantage so it can exploit the opportunity created by the team that we've built. And Vantage benefits by beginning with a highly diversified kind of portfolio, lines of business; you'll see that expand. Mark will find other areas of opportunity, expansion for the company that will allow us to deploy capital in a market which is patchy in terms of opportunity.

But that's really Mark's expertise. So I have to say that we're incredibly excited about Mark and David. We're excited about the synergies created combining with the Vantage team and what's been built over the last five years, but still at a very early stage. And that kind of gives me an opportunity to segue to real estate.

As proven by this quarter, this is a time where rates have risen very significantly. You read all kinds of stuff about the housing market here and there, and quarter after quarter there continues to be enormous demand for real estate in our communities. The reason for this is in part political. I'm unfortunately living in a city where the city is not run in a particularly pro-business fashion.

Taxes are high and going higher. Whereas in Texas, in Las Vegas—kind of our core MPC markets—these are states, cities, and communities where it's safe; people like to live, and very conducive to business and kind of quality of life. And I think that is a great competitive advantage for us. And so we believe that our real estate assets are phenomenal assets.

Now, in light of the fact we're no longer a pure-play real estate company, we can take a much harder look at the portfolio and say which are assets that are kind of strategic and critical for the long term—think landholdings, kind of core MPC assets—and which are assets where there's a better owner who can be prepared to buy the asset at a very full price. And the team has begun to prune the portfolio and generate cash, freeing up liquidity that can be reinvested in real estate. Now, the nature of our real estate business is that it's effectively in large part self-liquidating. You've seen significant condominium closings during the quarter, significant lot sales.

Over time, we will sell all of our residential lots, we will sell all of our condominium assets, we will sell all of our non-core real estate assets, and then beyond that, we're going to look at all of that. Historically, we sort of owned and financed 100% of everything ourselves. We're going to look at joint venture structures, we're going to look at ways to bring in capital to the Howard Hughes platform. Number one, we have a phenomenal team that did an incredible job building out these communities; a lot of skills honed over time in real estate development.

And unlike a typical developer who's got to find a piece of land, we have decades of value. That being said, we have very high-cost capital, certainly as the market assigns it to us. We're not a REIT; we're kind of an unusual company. So bringing in third-party capital—where we're a really attractive platform—and much lower-cost capital will enable us to earn much higher returns on real estate assets and also free up additional significant capital.

So what you should expect to see over the next several years is the inherent self-liquidating nature of condos and lot sales, but also an acceleration in the monetization of what you'd think of as more stabilized-type assets, and maybe more partnership-type opportunities for the company, and maybe even we'll raise a pool of capital that management can deploy in these assets on behalf of pension funds or other investors who love to own the kind of assets that Howard Hughes owns. So let's call that the backdrop of what we're trying to achieve.

And the result of that will be: as the insurance operation compounds its capital at, ideally, a high rate over time, as we invest more capital in that business, as the real estate business in effect self-liquidates and/or we bring in third-party capital to reduce our capital commitment to that business, we're going to become disproportionately an insurance holding company as opposed to a real estate company with an insurance operation. And that's what you're going to see, and we're going to work to achieve that as rapidly as possible. With that, I'm going to introduce Mark Renison.

Mark, why don't you take it away, and I think it would be very interesting to the people on the call—give us some of your first impressions arriving at Vantage, meeting the team, and then maybe give us a little color on the quarter, et cetera. Thank you. Mark Renison, Vantage Executive Chair and Howard Hughes Holdings Director Thank you, Bill. It's great to be here today.

My role as Executive Chairman, Vantage Risk, while it's still early days since the deal closed, I spent a fair amount of time with the Vantage Risk team and I want to thank them all for helping me get up to speed on the business. Very confident. Vantage has a solid foundation to build and build out a vision that we've highlighted already. I especially want to thank Greg Hendrick, who continues to lead the team.

I want to remind that through this transition period, until David Gansberg, our CEO-designate, joins the company. As you may know, Vantage was founded in late 2020 with about $1 billion of capital. Over the next five years the team has built a diversified specialty platform and a culture that is conducive for profitable growth and expansion. This acquisition that we just made, the incremental $300 million capital contribution, and the fee-free investment management by Pershing Square open the next chapter of Vantage permanent capital and allow us to underwrite for multi-year risk-adjusted returns that should generate top-tier growth in book value.

Given our current size, we have ample room to grow selectively. The Howard Hughes Holdings consolidated financial results for the second quarter include only the stub period from June 4, the day of the closing of the acquisition, through June 30. However, everything I discussed today and the Vantage supplemental information that has been disclosed covers full second quarter and first half of the year results for Vantage on a historical GAAP basis excluding acquisition accounting, which provides a clearer picture of the business. 6% versus 94% a year ago.

Gross and net written premium in the second quarter each rose 29% to $473 million and $325 million, respectively. 2% impact on the combined ratio. 7, both considerable improvements from the previous periods. Year to date, net income increased to $86 million, up 94% year to date.

Underwriting income grew to $23 million, roughly double from the prior year. In the second quarter, significant levels of fee income added to these improvements and in total more than offset the short-term volatility in the new equity portfolio. The first half and trailing 12-month results show the trend toward the longer-term result that was laid out in the Howard Hughes Holdings valuation supplement that was discussed on last quarter's earnings call. While we expect reduced volatility in results over the long term as we build scale, quarter-on-quarter movements will always have some degree of variability commensurate with our book of business.

2 in the second quarter of last year. 6, again showing a positive trend. Let me now highlight what shareholders should expect from Vantage as we look ahead. Vantage's core operating principles are right out of best-in-class performers in the property-casualty insurance space.

One, we're going to prioritize underwriting profit over volume with proper alignment of incentives between shareholders and management. Two, we maintain a conservative reserving approach. Three, we take a long-term, data-driven perspective on loss expectancy and profit margin. And four, we are disciplined in our decision making.

Strategically, we will execute our vision by retaining and attracting top talent, expanding and diversifying our platform so that our ability to capture hardening pockets is nimble and fast. We'll be investing in data to improve the quality of our decisions and better serve our customers. We'll be seeking a margin of safety in pricing, we'll be managing aggregation risk conservatively, and we will be leveraging our underwriting expertise whenever possible. We know that excellent execution of this strategy by the best people will generate return on equity at or above mid-teens over the cycle.

Turning to current P&C market conditions, in the past I have described the insurance cycle broadly in four stages. As a reminder, stage one is where the hard market starts, rates rise sharply, capacity withdraws. Stage two is a restoration phase where further rate increases and reserves are replenished. Then stage three where rates moderate or decline while hard market profits continue to flow, allowing disciplined underwriters to still grow profitably.

And finally stage four: the industry abandons discipline and chases volume as rates fall firm. Today we are primarily in stage three, with casualty seemingly stalled in stage two and a few property and short-date lines already entering stage four. Broadly, rates are down from peak and competition has increased, but pockets of attractive returns remain as many lines still show rate-level adequacy.