Billionaire Bill Ackman’s hedge fund delivered 58% returns in 2019 after making a big investment in Warren Buffett’s Berkshire Hathaway

Bill Ackman

Pershing Square Holdings, the activist hedge fund run by billionaire Bill Ackman, returned 58.1% in 2019, the fund said in December.
It’s the first net positive annual performance for Ackman’s fund in three years.
Ackman increased his position in Warren Buffett’s Berkshire Hathaway this year, according to SEC filings. In April, he credited the fund’s outperformance to Buffett’s influence, Yahoo Finance reported.
on Business Insider.

After three years of net negative returns, Bill Ackman’s hedge fund posted an incredible rebound in 2019.

Pershing Square Holdings, the activist fund run by Ackman, gained 4.5% in December, bringing its 2019 net performance to 58.1%, according to its December portfolio update. It’s a massive outperformance of the S&P 500, which gained 29% last year.

The positive annual performance is the first for Pershing Square since the fund began trading publicly in 2014, when it returned 40.4%. From 2015 to 2018, the fund posted negative returns, including 2018, where it nearly posted a positive return, but was pulled down to -0.7% from 0.07% for the year by fees.

Since, Ackman has honed his long positions and exited chemical and business service companies. In 2019, he also bet big on Warren Buffett, the so-called Oracle of Omaha who leads Berkshire Hathaway. At the end of September, Ackman held roughly 4 million Berkshire Hathaway B shares worth about $555 million, according to GuruFocus data.

In August, Ackman told investors the position in Berkshire Hathaway amounted to roughly 11% of Pershing Square’s net asset value. Since Ackman announced the investment, Berkshire Hathaway shares have gained roughly 16%.

Ackman considers Buffett a “mentor,” Yahoo Finance reported. At the 13-D Active-Passive Investor Summit in April, Ackman credited his fund’s performance, which was at that point already in the double-digits, to Buffett’s influence, according to Yahoo Finance.

In addition to Berkshire Hathaway, Pershing Square’s investments include Starbucks Corp., Lowe’s Companies Inc., Chipotle Mexican Grill Inc., and Restaurant Brands International, the parent company of fast-food joints such as Burger King and Popeyes, according to September data.

In December, Pershing Square also announced a stake in Agilent Technologies Inc., a life sciences equipment maker, Bloomberg reported.

Pershing Square’s outperformance comes amid a rough year for hedge funds overall. In 2019, the hedge-fund industry saw more closures than openings for the fifth year in a row, spurred by investors looking for cheaper vehicles to capture the bull market’s record run.

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Source:: Business Insider


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