Pershing Square’s 3Q14 performance
Activist hedge fund manager William Ackman’s Pershing Square Capital Holdings filed its third quarter 13F last month. In this series, we’ll go through some of the fund’s positions traded during the third quarter that ended in September. We’ll also highlight the fund’s November 13D filing on its new position Zoetis Inc. (ZTS).
The fund said in its latest shareholder letter that its portfolio “outperformed the major market indexes for the third quarter of 2014, year-to-date and since inception.” The fund’s year-to-date returns as of October 31, 2014, net of fees, was 35.0%.
The fund’s U.S long portfolio rose to $13.4 billion, from $12.5 billion in the third quarter of 2014. The fund’s only new position in the third quarter was Zoetis Inc. (ZTS). It also added to its existing position in Canadian Pacific Railway (CP).
Pershing Square said its positions in Canadian Pacific Railway (CP) and Herbalife Ltd. (HLF) added 3.2% each to the fund’s performance during 3Q14. Its position in Allergan, Inc. (AGN) added 1.8%, while Burger King Worldwide Inc. (BKW) added 0.7%. The fund said its positions in Freddie Mac (FMCC), Fannie Mae (FNMA), Howard Hughes Corporation (HHC), and Platform Specialty Products Corporation (PAH) saw negative returns during the quarter.
Fund completes IPO in October
The fund said the IPO of Pershing Square Holdings was completed on October 1, 2014, on the Euronext Amsterdam exchange with a capital raise of $2.73 billion from new investors. The fund said it expects “to continue to concentrate the substantial majority of our capital in about 8 to 12 investments, and estimate that our typical holding period will be long-term, typically four or more years.”
Pershing Square Holdings also added, “While our activist approach to investments has generated large returns on capital, historically we have deployed, on average, only about two-thirds of our capital in this strategy. The balance of our funds has been invested in cash and passive value investments, which have generated minimal returns.”