Bill Ackman’s Pershing Square trounces Carl Icahn as returns rise

Bill Ackman, the well-known Wall Street investor, had a strong performance in 2023 as American equities rallied. Shares of Pershing Square Holdings jumped to a record high of 3,530p on Friday, rising by about 22% since January. The stock outperformed the FTSE 100 index, which was barely moved during the year.

Pershing Square had a strong performance in 2023 as most of its portfolio companies rose. It also rose after Bill Ackman’s well-timed macro bet on US Treasuries market. In August, he placed a bet that US long-term treasury bonds would crash. He then covered the short position in October, netting his fund a cool $200 million.

We covered our bond short.

— Bill Ackman (@BillAckman) October 23, 2023

That trade sent memories of his giant trade at the start of the Covid-19 pandemic. At the time, he invested just $27 million and made a $2 billion profit within a few weeks. 

Pershing Square holds a highly concentrated portfolio of just eight companies, most of which did well during the year. Chipotle Mexican Grill stock price jumped by over 68% in 2023 and was trading at $2,304. He invested in the company a few years ago when it was trading at less than $400.

Restaurant Brands (QSR), the parent company of Popeye, Burger King, Tim Hortons, and Firehouse, jumped by over 16%. Hilton, the giant hospitality company, rose by over 45% as the tourism and business travel industry recovered. 

Lowe’s, one of the top duopolies in the US, also rose by 12% as inflation started falling and as the company improved its inventories. In a year when the real estate industry struggled, Howard Hughes Corporation did well as its stock rose by 10%. Canadian Pacific shares rose by just 6% while Google, his only big investment in 2023, spiked by 60%.

In all, Pershing Square’s returns in 2023 stood at 25.2% as Bill Ackman beat most hedge funds during the year. These returns were a big improvement from the previous year’s decline of 8.8% and 2021’s gains of 21.6%. He has continued to outperform the S&P 500, by having a five-year return of 220%.

Pershing Square vs Icahn Enterprises vs FTSE 100

Most notably, Ackman has trounced Carl Icahn, a long-term nemesis. Carl Icahn’s Icahn Enterprise (IEP) stock price plunged by over 65% in 2023 as it was attacked by Hindenburg Research. It also slashed its dividend in a bid to preserve cash.

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