The comparatively low level of cash assets currently held by hedge fund mogul Bill Ackman probably means that he won’t be making any activist investments for the next few months.
Ackman’s $18.3 billion Pershing Square hedge fund firm ended 2014 with a near-zero cash balance, making it unlikely that the company is building a new activist stake at the moment, the New York Post said.
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Ackman made headlines in 2014 for unconventional and profitable strategies in activist investing. His 40 percent return last year sparked rumors in recent weeks that he is making a run at numerous troubled blue-chips, from IBM to McDonald’s, the report said.
However, just $500 million, or about 3 percent of Pershing’s assets, were in cash as of Dec. 31, according to a year-end investment summary he shared with the funds’ investors last week, the Post said.
Pershing Square historically keeps 13.6 percent of its assets in cash, which can be used to fund new investments or give money to clients who want out, according to the presentation. Wall Street isn’t likely to see a big public short campaign again from Ackman soon, CNBC said.
“You’ll never hear about it, ” he told CNBC in January. “I may be done with public shorts. This may be – Herbalife — one of the last.”
Still, Ackman may already be searching for his next target. When the Actavis Allergan $66 billion stock/cash deal closes in March or April, he’ll have to figure out what to do with at least $4 billion in cash, the Post said.
Pershing Square’s main fund gained 40 percent in 2014 net of fees, among the best performances in the hedge fund industry, CNBC said.