Activist investor Bill Ackman, billionaire CEO of Pershing Square Capital hedge fund, made a big comeback in 2019.
His listed hedge fund company ended the year up 58.1%, significantly outperforming the broader market and average hedge fund.
The 53-year-old activist investor, who is known for building large positions in listed companies and forcing changes in management to unlock shareholder value, has held a relatively low profile over the past year. He has not actively raised capital, nor has he appeared on financial television. He has also given very few public lectures.
<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "In one of these rare appearances D Aktiv-Passiv- April Investor Conference, Ackman & nbsp;credited his already double-digit turnaround& nbsp; to his "mentor" Warren Buffett. "data-reactid =" 18 "> At one of these rare appearances, the 13-D Active Passive Investor Summit in April, Ackman wrote his" mentor "his two-digit turnaround for" Warren Buffett.
The investor said that "one of the most educational things in his career" was reading the legendary Omaha letters from the Buffett partnership – the fund Buffett launched before Berkshire Hathaway has become a world-class authority in making money.
In May 1969, after several years of outperformance, Buffett announced to his investors that he would close the partnership, indicating a "more negative and frustrating" investment environment. In the letter, Buffett offered partners the option to withdraw their money or keep their investment in shares in the textile company Berkshire Hathaway.
"I think it's instructive. And I think Mr. Buffett realized in 1969 that a long-term investor with short-term capital would ultimately lead to a bad result," said the hedge fund manager.
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Activist investor Bill Ackman (L), managing director of Pershing Square Capital, talks to a specialist dealer on the floor of the New York Stock Exchange on November 10, 2015. REUTERS / Brendan McDermid
The mission at Pershing Square, like Buffett's, is to have a permanent capital structure. Ackman said the company took a step in that direction and launched a publicly traded fund in 2014 with the long-term plan to have a majority of the capital in that vehicle.
After hitting 40.4% in 2014, the hedge fund saw negative returns each year until 2019. At the April conference, Ackman attributed the poor performance to some bad investments. These mistakes, which led to substantial capital repayments, or what Ackman called a "tough piece".
Pershing Square Holdings, the public vehicle, is now 80% of the company's capital, Ackman said at the time.
He said he had returned to a strategy that had been successful and invested in simple, predictable companies with positive cash flows.
<p class = "Canvas Atomic Canvas Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Some of Pershing Square's equity investments include Chipotle (CMG), & nbsp; Brands International Restaurant (QSR), Hilton (LDS), Lowe & # 39; s (LOW) and Starbucks (SBUX) to name a few. This summer, Pershing Square also has a large position in Buffett's Berkshire Hathaway (BRK-B). "data-reactid =" 38 "> Some of Pershing Square's equity investments include Chipotle (CMG), Restaurant Brands International (QSR), Hilton (HLT), Lowe & # 39; s (LOW) and Starbucks (SBUX), to name but a few To be mentioned this summer, Pershing Square also announced a large position in Buffett's Berkshire Hathaway (BRK-B).
Pershing Square also owns preference shares of government-sponsored mortgage giants Fannie Mae and Freddie Mac.
While 2019 was a professional success, it was also personal for Ackman. Based on another important lesson Buffett had learned – choosing the right person for the marriage – the investor married MIT professor Dr. Neri Oxman and greeted his first child in the spring.
"Maybe that has something to do with being in love, getting married. If your manager marries and has a child, I highly recommend that you bring capital," said Ackman at the summit.
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Julia La Roche is a correspondent at Yahoofinances,Follow her on Twitter."data-reactid =" 42 ">
Julia La Roche is a correspondent at Yahoo finances, Follow her on Twitter.
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