REUTERS/Shannon Stapleton
- Bill Ackman’s Pershing Square made an 11.1% net gain in March after betting that markets would tank because of the novel coronavirus.
- The billionaire investor’s hedge fund spent $27 million on hedges that surged in value to $2.6 billion during the market sell-off, balancing out declines in its equity portfolio.
- Pershing Square recorded a 3.3% net gain for the first quarter, a sharp rebound from its year-to-date loss of 7.1% at the end of February.
- Ackman last month denied deliberately trying to scare investors to help his hedges, arguing that he was up front about Pershing Square’s strategy.
- Visit Business Insider’s homepage for more stories.
Bill Ackman’s Pershing Square posted an 11.1% net gain in March after betting that the novel coronavirus would tank the stock market, according to its latest monthly report.
The billionaire investor’s hedge fund spent $27 million on credit-default swaps — which insure the buyer against an asset defaulting — on investment-grade and high-yield credit-default-swap indexes in February.
Those hedges ballooned in value to $2.6 billion after markets plunged last month, roughly offsetting Pershing Square’s losses on its equity portfolio, Ackman said last week.
Pershing Square plowed more than $2 billion of the windfall into equities by March 18, before the stock market rallied. Its strategy delivered a 3.3% net gain for the first quarter, marking a sharp rebound from net losses in January and February.
The fund performed especially well in the final two weeks of March, given it was down 6.5% for the year on March 17. Indeed, its net asset value swelled 10% — to $27.72 a share from $25.19 — during that period.
Critics accused Ackman of manipulating markets last month after an emotional CNBC interview in which he warned of mass casualties, industries collapsing, and a deep recession.
Ackman denied the claims in a letter to investors and a Twitter thread, arguing he had been up front about Pershing Square’s hedges and buying equities.
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
