Bill Ackman has been through a lot in the past few years. After his Pershing Square Capital Management recorded a string of embarrassing losses in Herbalife, Valeant and JC Penney, sending many of his LPs “running for the exits” and leaving the billionaire hedge fund manager on the verge of succumbing to the worst fate imaginable for somebody in his position: Converting to a “family office.”
But after taking more than his fair share of lumps, it seems things are finally turning around for silver-haired financial media darling, both personally and professionally: Because just months after announcing his engagement to an MIT professor, Bloomberg reported that Ackman’s fund is up roughly 25% so far in 2019, aided by one of the biggest market snapbacks in recent memory, after falling more than 10% during December’s bout of market volatility.
Bill Ackman’s Pershing Square Capital Management is off to its strongest start to a year on record, reporting a roughly 25% return on its investments so far in 2019.
That represents a turnaround for Ackman’s activist fund in the early part of the year, after a 10.8% loss on its investments in December and a 0.7% decline for all of 2018. Pershing Square returned 24.7% on its investments this year through Feb. 12, according to a statement Wednesday. Last year, its annual returns were down 9.4% through Feb. 13.
According to a shareholder letter seen by Bloomberg, Ackman said that his firm’s outperformance could be attributed to four of its holdings: ADP, UT, CMG and Starbucks (which didn’t show up in his 13-F for Q3 because he unveiled the play back in October, when he disclosed a $900 million stake).
The timing of the leak is, unsurprisingly, auspicious: Ackman is reportedly preparing to unveil a dividend for shares of his publicly-traded (in Europe) Pershing Square Holdings, which he told BBG is intended to attract dividend-seeking investors.
Ackman explained in his most recent shareholder letter that the recent outperformance has been driven by investments in ADP, Lowe’s, Starbucks and Chipotle.
The activist investor already up about 37 percent on his Starbucks stake and nearly 50 percent on his Chipotle bid based on initial average purchase prices.
Ackman’s publicly traded Pershing Square Holdings Ltd., which will hold an investor day in London on Wednesday, announced it was implementinga quarterly dividend of 10 cents a share. The payout, which currently represents a 2.5 percent yield, is intended to expand the company’s investor base by attracting dividend-seeking shareholders, the company said.
According to Pershing’s latest 13-F filed back in November, the firm’s three largest positions were Restaurant Brands International, Lowe’s and Chipotle. Together, they account for about 60% of the portfolio. His other holdings include: ADP, Howard Hughes, Platform Specialty Products and United Technology.
But readers should take the news of Ackman’s outperformance with a grain of salt, as one twitter user pointed out in their reaction to the news:
Even is Ackman is making money in 2019! https://t.co/k4MlrxJ96e
— Kunal (@kunalmacro) February 13, 2019
The real test for Ackman will come when the choppiness of late last year returns.
via ZeroHedge News http://bit.ly/2toXoAJ Tyler Durden