Photographer: Christopher Goodney / Bloomberg
Photographer: Christopher Goodney / Bloomberg
Bill Ackman’s Pershing Square Capital Management reported a second straight performance in 2020, as bets in the early days of the pandemic helped 70% on investments.
The billion investor Pershing Square reported a net return of 4.6% in December alone. Annual yields surpassed the 16% gain in the S&P 500, and exceeded Ackman’s 2019 record of about 58%.
Photographer: Christopher Goodney / Bloomberg
A back-to-back win marks an impressive result for Ackman, whose previous hedge fund was losing three consecutive years of losses after a disastrous bet on Valeant Pharmaceuticals Ltd. and a well-known short selling campaign at Herbalife Nutrition Ltd., among other challenges. The year marked a return for human-run hedge funds, after years of being overwhelmed by computer-driven quantitative strategies.
Pershing Square 2020’s performance was driven by Ackman’s profit hedge hedge that was implemented before the coronavirus crisis and the subsequent market sale. Ackman said in April that he had been so concerned about the potential impact of the coronavirus that he had considered melting down Pershing Square ‘s entire portfolio before choosing a credit hedge strategy.
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The bet paid off, returning about $ 2.6 billion to Pershing Square before it was sold in March, or about 100 times more than the initial investment. Ackman used the money to make what he called a “payback” on the economy, raising levels of portfolio companies and reinvesting in others including Starbucks Corp.
Ackman’s attention later turned to his blank check company, Pershing Square Tontine Holdings Ltd. In July, the special purpose construction company, or SPAC, raised $ 4 billion in an initial public offering, in addition to a $ 1 billion pledge from Pershing Square, and is now seeking a private company to bring it to public. Ackman had held discussions with Airbnb Inc., Stripe Inc. and others.
(Putting the product back to the top of human currencies in the third paragraph.)