Forget Tiger Woods. On Wall Street, Bill Ackman is attempting a comeback for the ages — perhaps by reverting to investing basics.
‘For a while there, we forgot that our main job was to make money, so we woke up, and now we’re back in the money making business.’
At a money-manager conference in New York earlier this week, Ackman acknowledged a string of missteps in recent years that saw his main hedge fund Pershing Square Capital Management stumble badly, shrinking to around $11 billion from a peak of $20 billion in 2015.
Some of Ackman’s losses came on the back of a series of hard-charging activist bets around nutrititional-supplement companyHerbalife Nutrition Ltd. HLF, -1.44% and the former Valeant Pharmaceuticals, now known as Bausch Health Cos. Inc. VRX, +9.29%
Now, Ackman is enjoying a renaissance of sorts. The hedge-fund luminary’s main fund is having the best year so far in Pershing Square’s 15-year history.
Part of the hedge fund’s success can be attributed to the manager dialing back somewhat on aggressive activist tactics and complex deals, and focusing on bread-and-butter businesses, including fast-casual Mexican chain Chipotle Mexican Grill Inc. CMG, +1.71% which is up 62% so far in 2019, according to FactSet data. He also bought stakes in Starbucks Corp. SBUX, +1.25% up 18.1% on the year, United Technologies Corp. UTX, +0.89% which has seen its shares climb 29% year-to-date gain, and Hilton Worldwide Holdings Inc. HLT, -0.60% which has risen by 21.5%.
Ackman’s investment in United Technologies, Hilton and Chipotle represented about 40% of his portfolio, at the end of December of 2018, according to data from WhaleWisdom, tracking the most recent quarterly 13-F filings.
Read: Chipotle’s stock takes a hit as Morgan Stanley downgrades after shares more than double this year
Ackman’s performance is even outperforming a stock market that is on a solid bull rally, despite a host of macroeconomic and political fears.
Yahoo Finance said Ackman’s revival stems from his realization that he needed to be more stylistic like famed value investor Warren Buffett in his investment strategy:
“I guess the way to think about it is — it’s very hard to lose money by buying great businesses if you pay a fair price,” Ackman said at the 13-D Monitor Active-Passive Investor Summit in New York on Tuesday. Staying out of the limelight and scaling back his own business also have helped, according to The Wall Street Journal.
At least part of Ackman’s comeback can be credited to his January marriage to Neri Oxman, a professor at the MIT Media Lab, according to the New York Post.
“It’s very helpful when you’re going through a difficult period to be in a great relationship” with someone who is “super-supportive, loving and warm and believes in you,” Ackman said at the summit, according to the Post.
The Post said Pershing’s main fund is up nearly 40%, while Yahoo Finance said that like Buffett with investment conglomerate Berkshire Hathaway Inc. BRK.A, -0.22% BRK.B, -0.11% Ackman is focusing more on his own publicly traded entity, Amsterdam-listed Pershing Square Holdings Ltd. PSH, +0.45% PSHZF, +0.39% which is intended to reflect the performance of his hedge fund. That publicly traded entity is up about 40% on the year.
By comparison, the Dow Jones Industrial Average DJIA, +0.42% is up 13.9% so far this year, while the S&P 500 index SPX, +0.16% has gained 15.9%, and the Nasdaq Composite Index COMP, +0.02% has rallied 20.5%.
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