June 14, 2018 / 10:25 PM / a year ago

Exclusive: Ackman's hedge funds gain after years of losses, Chipotle helps

BOSTON (Reuters) - William Ackman’s private hedge fund has gained more than 9 percent this year while his publicly traded fund is up double digits, marking a dramatic reversal for the billionaire investor after three years of losses.

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/File Photo

Pershing Square International climbed 9.3 percent from January through June 12, an investor in the fund said on Thursday. According to data from HSBC, the firm now ranks as one of the top 20 performing hedge funds for 2018.

Pershing Square Holdings, the largest fund managed by Ackman’s New York-based Pershing Square Capital Management, has climbed 11.4 percent since January, Pershing Square told clients late on Wednesday.

Last month Ackman told clients that performance was improving as all of his portfolios were finally in the black for the year.

Those gains have now grown and could signal a comeback for 52-year old manager after three years of back-to-back losses that helped shrink Pershing Square’s assets to roughly $8 billion, about half of what Ackman managed at the firm’s peak in 2015.

Despite years of poor performance, Ackman remains one of the industry’s most closely watched managers at a time active management has come under fire for high costs, and as other prominent fund managers post sluggish returns.

Ackman, who made three new investments this year, is now beating the average hedge fund’s roughly flat return for the year, according to data from Hedge Fund Research.

Returns have been fueled by gains at Chipotle Mexican Grill and Automatic Data Processing.

Burrito chain Chipotle, in which Pershing Square is the biggest investor with a 10 percent stake, saw its share price tumble to $251 after a string of food safety lapses.

Ackman bought the stake in 2016 for an average cost of $405 and joked last year that his investment team would be eating Chipotle until the stock price recovered. Earlier this year he helped install Brian Niccol as chief executive and Chipotle closed at $460.44 on Thursday, gaining 58 percent since January.

Automatic Data Processing, where Ackman lost a bitter proxy contest in late 2017, has climbed 19.75 percent since January to close trading on Thursday at $139.82, far above Ackman’s average cost of $105 a share.

The human resources software company held an investor day earlier this week and said its chief financial officer, Jan Siegmund, will be leaving.

Ackman, who told investors earlier this year that he would be lowering his profile as he seeks to turn around the firm’s performance, declined to comment.

Last year Ackman had said he was ready for a comeback. “I’m incredibly focused. I’ve got something to prove,” he said.

Reporting by Svea Herbst-Bayliss; Editing by Tom Brown

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below