Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Ackman's Pershing Square takes off coronavirus hedges: letter

Published 03/25/2020, 03:57 AM
Updated 03/25/2020, 07:16 AM
© Reuters. Ackman, CEO of Pershing Square Capital, speaks at the WSJ Digital Conference in Laguna Beach

© Reuters. Ackman, CEO of Pershing Square Capital, speaks at the WSJ Digital Conference in Laguna Beach

By Simon Jessop

LONDON (Reuters) - Veteran investor Bill Ackman told clients on Wednesday that he had taken off credit market hedges and reinvested the money into new and existing stock holdings after turning "increasingly positive" on stock and credit markets.

Ackman, who oversees Pershing Square (NYSE:SQ) Capital Management, initially took out the hedges - credit protection on investment grade and high yield credit indices - at the start of March as panic caused by coronavirus began cratering markets globally.

In a letter to investors in his listed fund, Pershing Square Holdings Ltd (AS:PSH), Ackman said subsequent market falls combined with steps taken by governments to limit the spread of the disease and federal and Treasury monetary support, had made him more positive on the outlook.

"We became increasingly positive on equity and credit markets last week, and began the process of unwinding our hedges and redeploying our capital in companies we love at bargain prices that are built to withstand this crisis, and which we believe will flourish long term," Ackman said.

Ackman said the fund completed its exit from the hedges on March 23, generating proceeds of $2.6 billion, and had reinvested the money in existing holdings including Agilent (N:A), Berkshire Hathaway (N:BRKa) and Lowe's (N:LOW).

© Reuters. Ackman, CEO of Pershing Square Capital, speaks at the WSJ Digital Conference in Laguna Beach

The fund also bought into several new holdings, including buying back in to Starbucks (O:SBUX). After the investments, the fund had maintained a cash position of about 17% of portfolio, he added.

Latest comments

Suckers rally. Still will go lower. This is biggest bull trap ever!!!
nice manipulation of markets with the CNBC interview. He with the most marbles wins right Bill?
Beautiful!!! So he manipulates the market last week with drama and tears about how bad it is, name drops he is long Hilton. the markets accelerated on his call in to CNBC. his hedges make huge profit, his long in Hiton goes up as soon as he mentioned he has been buying it. Where is the SEC on this? Why isn't this guy being getting called out for manipulation?
this guy is a compulsive liar. u can cut his comments.
why anyone would believe this putz is beyond me. be george costanza.
now that he says he's buying, sell.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.