Pershing Square Jumps 7.9% In October

Nov 5 2013 | 9:14am ET

Pershing Square Capital Management posted a huge return in October, transforming what appeared to be an extremely disappointing year into an extremely promising one at a stroke.

The firm's flagship International Fund jumped 7.9% last month and is now up more than 8% on the year. Returns were fueled by big gains among some of its biggest holdings, including mall owner General Growth Properties, Burger King Worldwide and Canadian Pacific Railway.

The New York-based hedge fund has had an up-and-down year in 2013, but recently it's been primarily down. After a difficult summer, Pershing Square was essentially flat, burned by big losses on J.C. Penney Co. and its $1 billion short against nutritional supplements company Herbalife.

Pershing Square booked a $500 million loss when it sold off its entire Penney's stake and has a similarly large paper loss on its Herbalife short, which it recently restructured to reduce risk. But its October surge was helped by a 7.1% drop in Herbalife's share price—although it remains up 84% on the year. Ackman is planning a new presentation on the company, which he believes is a pyramid scheme, later this month.

Of course, October wasn't without its missed opportunities: Pershing Square in September nearly halved its General Growth stake, only to see the stock jump 10% last month.

Pershing Square said in a letter to investors that it had added two short positions in October, although it did not identify them. It also added two long bets.


In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...

 

From the current issue of