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William ‘Bill’ Ackman, CEO and Portfolio Manager of Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid
May 17, 2018
BOSTON (Reuters) – Two days after billionaire investor William Ackman told clients that he was making money across all his funds again, he said on Thursday that his publicly traded Pershing Square Holdings Ltd portfolio was barely in the black so far this year.
The portfolio (PSH) gained 9.4 percent in the second quarter through May 15 after having lost 8.6 percent in the first quarter, Ackman wrote in a letter to investors. That left a 0.1 percent gain for the year through May 15.
The broader S&P 500 stock market index gained 2.1 during the same time.
“While 45 days is much too short a period to judge investment performance for a long-term strategy, we believe recent progress is reflective of actual business progress at PSH, and at our portfolio companies during this period,” Ackman wrote in the letter seen by Reuters.
On Tuesday, Ackman had told investors on a conference call that all funds are in “slightly positive territory,” welcome news after his $8 billion Pershing Square Capital Management posted three consecutive years of losses.
Chipotle Mexican Grill Inc, where Pershing Square has two board seats and played a key role in selecting the burrito chain’s new chief executive, helped fuel gains across the funds.
Mortgage giants Fannie Mae and Freddie Mac, whose common stock prices have each dropped roughly 50 percent since January, ranked among the biggest losers.
Despite those losses, Ackman signaled that he is sticking with the bet.
“We continue to believe that Fannie and Freddie offer a highly attractive potential reward relative to risk for the patient investor, particularly at current share prices, near their lowest since we made our investment in 2013,” he said.
Ackman’s hedge fund is not the only prominent firm to have lost on Fannie and Freddie this year. Two weeks ago Daniel Loeb’s Third Point told investors in a letter that they ranked among the firm’s five biggest losers in the first quarter.
(Reporting by Svea Herbst-Bayliss; Editing by Meredith Mazzilli)