This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.
Next up we have Pershing Square Capital Management. Bill Ackman runs Pershing Square, a well known value / activist based hedge fund that started in 2003 after Gotham Partners broke up. The past few years, he has had notable short positions in the bond insurers such as MBIA (MBI) and Ambac (ABK). But, he has since closed those shorts.
He also detailed his plans for Target (TGT) to spin-off its real-estate to unlock value. His Pershing Square IV fund, which invests solely in Target, has seen abysmal performance, as Ackman apologized for in one of their investor letters. So far, it has been an uphill battle with Target in regards to instituting change at the company. A great quote from Ackman has arisen from all the Target hoopla. He states, “The investment business is about being confident enough to know that you’re right and everyone else is wrong. Yet you have to be humble enough that you recognize when you’ve made a mistake. Earlier in my career, I think I had the confidence part pretty solid. But the humbleness part I had to learn.’’
More recently, Ackman presented at the Ira Sohn Conference where numerous hedge fund managers shared investment ideas. Ackman's gave a presentation on General Growth Properties (GGWPQ.PK) in which he proposed that equity would not be completely wiped out in their bankruptcy. For more reading on the subject, Ackman also separately talked a lot about his Target & General Growth positions.
We track Ackman on the blog extensively and have a lot of resources on him and his fund. Just yesterday, we ran a profile & biography piece on Bill Ackman for a more in depth look. This is part of our biography series in which we've already covered Julian Robertson (of Tiger Management) and Lee Ainslie (of Maverick Capital).
The following were their long equity, note, and options holdings as of March 31st, 2009 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.
Some New Positions (Brand new positions that they initiated in the last quarter):
Apartment Investment & Management (AIV)
Yum Brands (YUM)
Some Increased Positions (A few positions they already owned but added shares to)
General Growth Properties (GGWPQ.PK): Increased by 16%
Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Visa (V): Reduced by 69%
Wendys Arbys (WEN): Reduced by 31%
Target (TGT): Reduced by 7%
Removed Positions (Positions they sold out of completely)
Dr Pepper Snapple (DPS)
Sears Holdings (SHLD)
Their Entire Long Portfolio (by % of portfolio)
- Target (TGT): 42.9% of portfolio
- EMC (EMC): 33.5% of portfolio
- Wendys Arbys (WEN): 8.15% of portfolio
- Visa (V): 6.15% of portfolio
- Target (TGT) Calls: 3.47% of portfolio
- Apartment Investment & Management (AIV): 2.23% of portfolio
- Yum Brands (YUM): 2.14% of portfolio
- General Growth Properties (GGWPQ): 0.83% of portfolio
- Borders (BGP): 0.33% of portfolio
- Greenlight Capital Re (GLRE): 0.2% of portfolio
- Alexander (ALX): 0.07% of portfolio
Firstly, please note that since this filing there has been activity regarding Pershing's portfolio. In mid May, they sold entirely out of their WEN position. So, the information above does not reflect this (as it is taken directly from their filing that was made prior to the WEN action).
Moving on to the rest of their portfolio, we see that Ackman still has his large Target position. This is due to his Pershing Square IV fund that invests solely in TGT via common stock and options. It is undoubtedly their largest position but it is also somewhat of a unique circumstance in our tracking series because its not very often that you come across a firm that has a fund invested solely in one company. However, Pershing still has their main fund which is invested in numerous positions. The rest of Pershing's portfolio is more 'normal' in the sense that it is diversified amongst a few concentrated holdings. One cannot overlook the large EMC stake they have amassed at 33.5% of their portfolio.
While Visa is their fourth largest holding, they still cut it drastically, selling 69% of their position. They also sold completely out of both Dr Pepper Snapple and Sears, with DPS previously being a pretty large position for them as it used to be 7.2% of their portfolio. And, as mentioned before, they also have recently sold out of their Wendys Arbys (WEN) position, even though the data above does not reflect this. In terms of new additions, they added both Apartment Investment & Management (AIV) and Yum Brands (YUM) and both sit right in the middle of their portfolio in regards to position sizing. Overall, not a whole lot of changes on the long side for Pershing Square over the first quarter of 2009.
Assets from the collective holdings reported to the SEC via 13F filing were $1.9 billion this quarter compared to $2.4 billion last quarter, so a drop off of around $500 million or so. This is just one of the 40+ prominent funds that we'll be covering in our hedge fund Q1 2009 portfolio series. We've already covered:
- Gurus such as: Soros Fund Management (George Soros), and Jim Rogers.
- 'Tiger Cub' portfolios like: Andreas Halvorsen's Viking Global, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, Lee Ainslie's Maverick Capital, Shumway Capital Partners (Chris Shumway), Chase Coleman's Tiger Global,
- Outperforming funds like: John Paulson's hedge fund Paulson & Co, Eric Mindich's Eton Park Capital, Raj Rajaratnam's Galleon Group,
- Value and activist funds such as: David Einhorn's Greenlight Capital, Seth Klarman's Baupost Group, Whitney Tison's T2 Partners, Philip Falcone's Harbinger Capital Partners, Ricky Sandler's Eminence Capital,
- Concentrated funds that play secular / macro themes such as: Timothy Barakett's Atticus Capital, Bret Barakett's Tremblant Capital Group, Boone Pickens' BP Capital Management, John Burbank's Passport Capital
- Global macro firms such as: Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, Peter Thiel's Clarium Capital,
- And, newer funds on the scene: David Stemerman's Conatus Capital, Anand Parekh's Alyeska Investment Group. Check back each day as we cover new fund portfolios.