After dumping Warren Buffett and Berkshire Hathaway, Ackman says his hedge fund is up big
Pershing Square opts for buys in Starbucks, Lowe's and Hilton Worldwide
William Ackman's hedge fund is boasting double-digit gains at a time many portfolios have sunk along with the economy during the coronavirus pandemic, after the billionaire investor plowed cash into a number of companies he already owned and dumped Warren Buffett's Berkshire Hathaway among other stocks.
The public and private funds at Pershing Square Capital Management have gained between 22 percent and 27 percent this year, handily beating both the Standard & Poor's 500 index and the average hedge fund which are each off percent since January, Ackman said.
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Ackman, who began worrying about the health and market impact of the pandemic months ago, famously hedged his portfolio with a $27 million bet that turned into a $2.7 billion windfall that he reinvested in the stock market in late March, buying bigger stakes in companies he was already betting on.
"We like what we own and we still think these stocks are cheap," Ackman told investors on a conference call on Wednesday, adding that his portfolio contains companies whose businesses can withstand unpredictable events with severe consequences.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BRK.B | BERKSHIRE HATHAWAY INC. | 483.02 | -0.06 | -0.01% |
| PK | PARK HOTELS & RESORTS INC. | 15.55 | -0.01 | -0.06% |
| BX | BLACKSTONE INC. | 191.09 | +2.07 | +1.10% |
| PSHZF | PERSHING SQUARE HOLDINGS LTD. | 48.23 | +1.49 | +3.20% |
Positions in Berkshire Hathaway, Blackstone Group and Park Hotels & Resorts were liquidated because the cash could be used more efficiently elsewhere, he said.
68% OF BUFFETT'S PORTFOLIO IS IN THESE 4 STOCKS
Money was used to buy more stock in Starbucks, Restaurant Brands International, Agilent Technologies, Lowe's Cos Inc and Hilton Worldwide Holdings he said, arguing these large companies have best-in-class technology to weather the pandemic.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SBUX | STARBUCKS CORP. | 102.46 | +0.95 | +0.94% |
| LOW | LOWE'S COMPANIES INC. | 272.43 | -0.76 | -0.28% |
| HLT | HILTON WORLDWIDE HOLDINGS INC. | 253.44 | +3.02 | +1.21% |
| QSR | RESTAURANT BRANDS INTERNATIONAL INC. | 69.61 | -0.57 | -0.81% |
This year's gains come on the heels of last year's 58.1 percent return, the single best year since Pershing Square's founding in 2004, and signal that Ackman is still having success with his back-to-basics strategy where in 2018, he took back control of making investments instead of being the firm's chief marketer.
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Ackman was early in closing down his Manhattan office and sending staff to work from home. When millions of other Americans were told to stay away from the office, Ackman pounced on the beaten-down stock of Lowe's, arguing that the time for long-delayed home improvement projects is now.
"We bought Lowe's at $84 a share and it was the bargain of a lifetime," he said with the stock now at $127.62.
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