Bill Ackman’s Pershing Square is back with a bang, to put it mildly. The long/short equity hedge fund that closed the third quarter with a less that 1% net return, was up +7.9% in October, according to a monthly performance sheet seen by ValueWalk (and as earlier noted on Twitter)


Bill Ackman

Bill Ackman’s overall returns

This major reclaim to gain puts Bill Ackman’s overall return for the year at +8.5%. The monthly stat sheet also shows another interesting development; the fund now has two equity shorts as opposed to a single short disclosed through the end of Q3. Bill Ackman’s highly publicized short bet is against Herbalife Ltd. (NYSE:HLF). The fund reduced its risk exposure to the $1 billion direct short in shares of the nutrition supplements company with cutting direct exposure by 40% and buying put options instead.

According to the October stat sheet, Pershing Square has 11 long positions and 2 short positions. The fund has -10% gross exposure in a large cap short and -1% gross exposure in a mid cap short. It would appear that the -10% net exposure in large cap short is Herbalife Ltd. (NYSE:HLF) whereas the new short is a smaller one worth roughly $100 million.

But whatever specifically drove PSCM’s returns to the whopping 7.9% in the last month, it was not the new short, given it is a small position. A spokeswoman for PSCM confirmed that the fund has a new short but declined to comment further.

PSCM has 86% net long exposure and -11% net short exposure. The fund has long exposure in CDS valued at ~ $5666 million.

Bill Ackman’s best performing positions

One of the best performing positions of Bill Ackman in October was Canadian Pacific Railway Limited (USA) (NYSE:CP), his largest stake, where shares were up nearly 16%. The fund plans to sell more than 6 million shares of CP soon. The fund’s total holding in CP was at 24.15 million shares at the end of Q2.

PSCM’s second largest position, The Procter & Gamble Company (NYSE:PG) was up 4.6%, whereas General Growth Properties Inc (NYSE:GGP), another major stake, took a 10% gain last month.

Burger King Worldwide Inc (NYSE:BKW) gained 6%, whereas BEAM Inc (NYSE:BEAM) was up 4.5% in October. After a multi-month rally,  Herbalife Ltd. (NYSE:HLF) closed down 7% in October. This would have also contributed to PSCM’s returns which has previously suffered from Herbalife’s seemingly unstoppable gains.

Pershing Square Capital Management managed $11.44 billion at the end of October.