Bill Ackman Made $2 Billion This Year Betting on Rising Rates
"Bill Ackman’s bet on rising interest rates has paid off big time, earning his firm almost $2 billion this year — and $5.2 billion since the Covid-19 pandemic began in 2020.

Despite that success, Ackman’s Pershing Square Capital funds are still down as much as 8 percent this year on a gross basis, he told investors in a quarterly call Thursday. Not counting the interest rate bet — or hedge as he likes to call it — the equity positions of the funds fell by around 22 percent."

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"Ackman runs a concentrated long portfolio of eight equity holdings, and the only two of them whose shares are in the black this year are Canadian Pacific Railways and Restaurant Brands.

But betting against the market has proved quite lucrative. Short bets placed over the past three years now account for about 40 percent of the the Pershing Square’s profits, with firm capital now standing around $11 billion.

Pershing Square made $2.5 billion in 2020, $700 million in 2021, and $2 billion so far this year on such investments."
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"The firm also has a few commodity hedges and forward contracts to hedge the currency risk of its holdings in Europe, like Universal Music Group, and Canada, like Canadian Pacific.

“You should expect this to be part of our thinking going forward,” he said, noting the “volatile world” we live in has forced the hedge fund to dedicate more time to thinking about “potential black swans.”


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Source: Institutional Investor

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