Bill Ackman, the founder, and CEO of Pershing Square Capital Management released a statement this week explaining why he has taken measures to protect his hedge fund’s $6.6 billion portfolios after a rough start to the year. Which he partly attributes to the coronavirus.
‘‘We believe that efforts to contain the coronavirus are likely to have a substantial negative impact on the U.S. and global economies, and on equity and credit markets.’’
The Wall Street billionaire is protecting his holdings, which include restaurant and hotel stocks, against the impact of the coronavirus as it continues to threaten U.S. and International equity markets.
Ackman explained that he would rather hedge than unload positions in strong businesses like Chipotle, Hilton, Lowe’s, Restaurant Brands and Berkshire Hathaway.
Starting last week, “we have taken steps to protect the portfolio from downward market volatility,” he wrote. Ackman didn’t offer up details on the specific steps or provide any insights on his hedging strategy.
2019 was a great year for Pershing Square. The hedge fund rallied 58.1% to outperform the broader market.
2020 has been a different story, the portfolio had dipped 7.1% so far and could potentially go lower with due to the combination of the coronavirus and political uncertainty.
In regards to hedging…the ‘Joe Biden Rally’ is in full effect this week. There is no hedging necessary!
