The much-respected hedge fund Pershing Square from Bill Ackman achieved a return of just under 27 percent in the last year. This means that the billionaire’s fund is doing much better than in the previous year – but is only just beating the market.
Last year, Pershing Square Capital Management was able to make up for the setback in 2022. With a plus of just under 27 percent, the dip of around 9 percent from the previous year has been ironed out. This has emerged from the investor update published last Tuesday.
With this return, the hedge fund of billionaire Bill (William) Ackman was able to develop in the broad market, measured against key American index Dow Jones, which showed a plus of 14 percent. In the previous year, however, the broad S&P 500 index gained around 24 percent, and the NASDAQ 100 index with U.S. technology shares even rose by 54 percent.
Attractive Google Parent Company
The long-standing portfolio company Chipotle Mexican Grill contributed to the success of Pershing Square. Its share price gained more than 63 percent in 2023. The share value of Google parent company Alphabet, a position that Ackman added to the portfolio last year, rose by around 55 percent.
The 57-year-old founded Pershing Square in 2004. According to reports, the company manages an asset volume of an impressive 18 billion dollars. In 2021, the fund also gained around 27 percent and in the two years before that, 70 and 58 percent.
Pioneer of the «bond vigilantes»
Once an activist investor who would wage battles against companies with demands for change, Ackman had significantly scaled back this role some time ago. He happily announces his investment decisions on the social media platform X (formerly Twitter), and most of these decisions attract a high level of interest.
Last August, Ackman announced that he was going to short 30-year U.S. Treasury bonds, which meant that he planned to bet on their loss in value. At that time, he was on the right course, as the interest rates in the months to follow increased by almost a whole percentage point. He was thus one of the troop of «bond vigilantes» who successfully bet on decreasing rates in the U.S. Treasuries.
Risk of a Hard Landing
In October, Ackman caused a stir on the market once again when he tweeted that the company had liquidated his bet against U.S. Treasury bonds. In an interview in December, he said that he had already expected a decrease in interest rates at the American Federal Reserve in the first quarter of 2024. With no early decrease, he had ruled out a «soft landing» for the U.S. economy.
«I think there’s a risk of a hard landing if the Fed doesn't start cutting rates pretty soon,» Ackman warned at the time.
Recently, the investor has also weighed in vehemently on the antisemitism debate at the American universities Harvard, Pennsylvania and MIT. He reproached the executive committees of the elite schools for not doing enough to prevent antisemitic demonstrations on campus. He studied at Harvard.
