Pershing Square Sells Canadian Pacific Shares

Oct 25 2013 | 12:53pm ET

Pershing Square Capital Management is doing something that it's had precious little opportunity to engage in recently: profit-taking.

The New York-based hedge fund announced that it had sold a chunk of its stake in Canadian Pacific Railway, whose stock has soared since Pershing Square won two board seats last year. The hedge fund's investment has nearly tripled in value since it began buying shares in 2011, amounting to a US$2 billion profit.

Pershing Square announced in June that it would sell 7 million shares over the course of a year. But after unloading a million of the them over the last four months, it succumbed to pressure from analysts and other investors, who feared the projected sales would weigh on its share price.

Bank of America Merrill Lynch, Credit Suisse and Morgan Stanley arranged the sale, which netted about US$800 million.

Pershing Square remains CP's largest shareholder with a 9.8% stake, and both Ackman and Pershing Square partner Paul Hilal will remain on the company's board.

The sale adds to Pershing Square's growing cash horde. The firm has been hit hard by the poor performance of its investment in J.C. Penney Co. and its huge short against nutritional supplements company Herbalife, but performance has picked up this month, investors told Reuters.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...

 

From the current issue of