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)
Ackman has a new short our story to follow pic.twitter.com/E1mtjCdRur
— ValueWalk.com (@valuewalk) November 4, 2013
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.