Pershing Square: Bill Ackman’s 7 Stock Market-Beating Portfolio

Pershing Square Capital is a New York-based hedge fund founded in 2004 and still managed by legendary investor Bill Ackman.

Pershing Square is unique, as it has been structured as a closed-end fund whose shares are publicly traded, but is still managed like a hedge fund. According to the company’s latest 13F report, Pershing Square has around $10.6 billion worth of public equity holdings.

Investors following the company’s 13F filings over the last 3 years (from mid-February 2018 through mid-February 2021) would have generated annualized total returns of 28%. For comparison, the S&P 500 ETF (SPY) generated annualized total returns of 12.5%.

Note: 13F filing performance is different than fund performance. See how we calculate 13F filing performance here.

Keep reading this article to learn more about Pershing Square.

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Pershing Square’s Legendary Manager Bill Ackman

Since the fund’s inception, Pershing Square has been primarily managed by Bill Ackman, who initially funded the company with $54 million from his personal funds.

The billionaire hedge fund manager has gained legendary status in the investing community, having executed many successful and creative investment plays.

One such bet which dominated headlines recently involved him turning $27 million into $2.6 billion. Ackman used credit protection on investment-grade and high-yield bond indexes in his controversial bet that the coronavirus would tank the market.

The trade eventually paid off, at a time when most portfolios were recording losses. The uniquely structured position was so successful that Wall Street journalists described Ackman’s bet as the single best trade of all time.

Mr. Ackman has several other noteworthy achievements throughout his career. In 2011 Pershing Square acquired a 14.2% stake in Canadian Pacific Railway Limited (CP). Ackman eventually won a fierce battle with the existing board to install a new CEO and overhaul the company’s business strategy. Over the next 3 years, CP shares quadrupled.  This successful investment netted the activist hedge fund a total of $2.6 billion in profit.

Finally, while Ackman’s coronavirus generated a sizeable return, it’s certainly not Pershing Square’s first. In 2009, Ackman said that he realized a 13-fold return in General Growth Properties, which was on the brink of bankruptcy amid the Great Financial Crisis. By accomplishing a 7-year extension of the company’s $27.3 billion in debt, the mall owner was able to survive, and eventually, buyback Pershing Square’s stake. Ackman’s risky bet is now the second-best in his investing career, turning $60 million into $1.6 billion, exceeding his initial expectations.

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