Bill Ackman’s Pershing Square Capital Management managed to achieve a 70% return for the year 2020 in spite of the Coronavirus pandemic and the worldwide recession which it caused. The hedge fund reported a 4.6% gain in December leaving the firm with a 70.2% return in total for last year. In doing so Pershing Square broke its own previous record.
The 54 year old investor owns 45 million shares, or 23 percent, of Pershing Square Capital.
CNBC points out that this return greatly outperformed the 2020 return of the Dow Jones Industrial Average, S&P 500 or even the Nasdaq Composite, which posted a robust gain of 43.6%.
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Pershing Square Capital Management has now had two consecutive winning years after a three year run in the red. That was caused by a poor bet which Bill Ackman made on bet on Valeant Pharmaceuticals Ltd. He also blew it when he tried to short Herbalife. Meanwhile his rival activist investor Carl Icahn just cleared $1.5 billion off of his investment in Herbalife. Icahn made the investment knowing that it put him up against Ackman who expected Herbalife to fail.
Bill Ackman’s success in 2020 is being attributed to his accurately assessing the effects of the Covid-19 pandemic. Ackman put in place in the lead-up to the Coronavirus crisis and the subsequent market selloff. Ackman utilized a credit-hedge strategy.
One success was his $2.5 billion investment made in equities back in March. This was done to offset possible losses caused by the Coronavirus emergency.
And Bloomberg explains that Bill Ackman used his “blank-check company,” Pershing Square Tontine Holdings. Which raised $4 billion in an initial public offering and another $1 billion commitment from Pershing Square.
Institutional Investor reports that Bill Ackman personally pocketed more than $1 billion last tear.