Bill Ackman's Strategic Investment Shifts: A Detailed Analysis

Bill Ackman Investments, Retail Hedge Fund, and Portfolio Shifts for 2024

Trading Strategies


Bill Ackman, the influential hedge fund titan behind Pershing Square Capital Management, is once again at the forefront of financial news with his innovative investment vehicle tailored for Main Street investors. Ackman's latest move, a closed-end fund listed on the New York Stock Exchange, underscores his commitment to democratizing high-quality investment opportunities. This article expands on Ackman's strategic shift, incorporating insights from his latest 13F filing which reveals significant portfolio adjustments, marking a new chapter in his investment approach.

Ackman's Investment Vehicle and Portfolio Strategy

A "Retail Hedge Fund"

In a significant departure from traditional hedge fund structures, Ackman is introducing a closed-end fund that targets 12 to 24 large-cap, investment-grade "durable growth" companies in North America. This fund, unique for its lack of a minimum investment requirement, is designed to open up opportunities for a broader investor base, aligning with Ackman's philosophy of making premier investments accessible to all.

Further enhancing its appeal, the fund eschews the conventional 2% management fee and 20% performance fee model. Instead, Ackman has pledged to waive the management fee for the first year and subsequently apply a flat 2% fee, a move that prioritizes investor returns and reflects a commitment to equitable investment practices.

Insights from the Latest Ackman 13F Filing

Significant Portfolio Adjustments

The fourth quarter of 2023 saw Ackman making notable changes to Pershing Square's portfolio. Ackman, known for his strategy of investing in undervalued stocks and pushing for corporate reforms to unlock value, has adjusted his stakes significantly:

  • Howard Hughes Holdings Inc (NYSE:HHH) saw an increase of 2,045,156 shares, totaling 18,852,064 shares. This adjustment is a clear testament to Ackman's confidence in Howard Hughes, marking a 12.17% increase in share count and a 1.68% impact on the portfolio.
  • Conversely, Lowe's Companies Inc (NYSE:LOW) and Chipotle Mexican Grill Inc (NYSE:CMG) experienced significant reductions. Lowe's shares were cut by 82.37%, impacting the portfolio by 11.53%, while Chipotle's shares saw a 13.49% reduction, with a 2.25% portfolio impact. These moves reflect strategic divestments, aligning the portfolio with Ackman's vision for future growth.

Portfolio Composition

As of the end of 2023, Ackman's portfolio comprised eight stocks, with leading positions in Chipotle Mexican Grill Inc, Restaurant Brands International Inc, Hilton Worldwide Holdings Inc, Howard Hughes Holdings Inc, and Alphabet Inc.  Ackman has a focus on companies with strong growth potential and sustainable business models.

Pershing Square Hedge Fund Performance

Pershing Square 2023 fund performance amounted to 26% net of fees. In 2022, the fund lost -8.8% of value, net of fees. In 2021, Pershing Square fund performance amounted to 27% and the previous COVID year, 2020, the fund yielded 70.2%.

Event-driven investing

The outperformance in 2020 was attributed to event-driven investing, most notably, a large short position on the stock market.

In 2019, Ackman's Pershing Square fund gained 58% and the previous year, 2018, Pershing Square lost just under 1%. In 2017, Pershing Square also lost money - 4% net of fees. In 2016, Pershing Square lost -13.5% net of fees.

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