Almost everything in Bill Ackman’s Pershing Square Holdings portfolio made money in July, boosting his monthly performance to 4.6 percent.
Pershing Square Holdings is now up 34.8 percent for the year, according to a document released to investors in the UK and Amsterdam-listed publicly traded hedge fund.
Last month Ackman made news with the launch of a $4 billion SPAC, or special purpose acquisition company, that his firm sponsored. It was the largest SPAC ever, at time when these investment vehicles are booming. It’s up about 5 percent since its debut.
And while the bold investor was making news, his hedge fund portfolio was continuing to post big gains.
Several stocks in Ackman’s highly concentrated portfolio gained around 10 percent or more for the month. They include burrito chain Chipotle Mexican Grill, home improvement retailer Lowe’s, and Agilent Technologies. Year to date, Chipotle is up 38 percent, Lowe’s is up 25 percent, and Agilent is up 16 percent.
Earlier this year, Ackman was able to invest the proceeds from savvy short bets on CDS on various investment grade and high-yield credit default swap indexes into several stocks when they were trading at a deep discount.
Even some of Ackman’s stocks that have been hardest hit by the pandemic — hotelier Hilton Worldwide Holdings and real estate developer Howard Hughes — posted gains last month. Hilton, which was Ackman’s third-largest holding at the end of the first quarter, gained about 2 percent in July. It is down about 32 percent for the year.
Howard Hughes, which has been particularly hard hit by the collapse in oil prices as one of its biggest developments, the Woodlands, is near Houston, Texas, managed a gain of about 1 percent for the month of July.
Ackman is chairman of the board of the Dallas-based company. It is down about 58 percent year to date through July.
Starbucks gained more than 4 percent in July, while Restaurant Brands, which was Pershing Square’s biggest holding at the end of March according to regulatory filings, gained a little more than 2 percent during the month. It has nearly doubled since the bottom in mid-March, and Starbucks is up about 30 percent since that time.
The one detractor last month was Ackman’s long-suffering stake in Fannie Mae and Freddie Mac, FMCC, the government-owned mortgage insurers. The common stocks of both lost a little more than 8 percent in July. For the year, they were down 37 percent and 34 percent, respectively, through July.
Pershing Square is no longer required to disclose how much it owns of these two companies, but its annual report indicated the fund had owned both common and preferred shares of both mortgage insurers through March.
During the first quarter, Ackman’s CDS hedge provided a more than 37 percent contribution to the portfolio. Although he unwound that bet in early March, he has since put on another one.
Ackman told Institutional Investor that he is cautious about the markets over the next nine months because of political uncertainty surrounding the presidential election and the lack of a vaccine for the coronavirus, among other issues.
And so, the firm has put on another short position in a high-yield index. “We are bearish on highly levered companies,” Ackman told CNBC when he first disclosed the new hedge.
A spokesman for Pershing Square declined to offer further details on the new short bet, including its contribution to the portfolio.
