Thursday, 24 July 2014
Last updated 1 hour ago
Nov 5 2013 | 8:14am 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.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…