The two shares star investor Bill Ackman has snapped up
Investment trust Pershing Square Holdings has made rare additions to its portfolio, writes Sam Benstead.
19th August 2024 09:30
by Sam Benstead from interactive investor
Star fund manager Bill Ackman has invested in two new shares in his investment trust, Pershing Square Holdings (PSH).
Filings to the US financial regulator from PSH parent Pershing Square Capital Management show new positions in Nike and Brookfield Corporation, a Canadian asset manager.
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He also mentioned them in his recent semi-annual letter to investors, saying: “During the second quarter, we made two new equity investments, Nike and Brookfield Corp. We intend to defer discussion about these new investments for now.”
Nike shares, which are also owed by Fundsmith Equity manager Terry Smith have been struggling recently.
They trade at around half the price of their late 2021 peak and have dropped 22% so far this year. However, the shares jumped 5% after news broke that Ackman had built up a position worth around $230 million (£180 million).
Nike is seeing increased competition from sportswear upstarts, such as LuluLemon, and sales and earnings have been disappointing.
Taking a stake in the struggling sports giant could suggest that Ackman is returning to a more activist style of investing, where he pushes for change at a company that he owns a part of.
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He successfully did this in 2016 when he bought shares in Chipotle, a fast-food chain, and helped recruit a new CEO in 2018.
Brookfield is performing better, with shares up 69% over the past five years and 19% so far in 2024. Pershing Square Capital Management now has a $284 million position in the company.
Other key positions in the trust include Alphabet, Restaurant Brands International, Hilton Worldwide Holdings and Universal Music Group.
Ackman recently attempted to launch a listed investment vehicle in America, Pershing Square USA, but it failed to attract sufficient investor interest.
QuotedData, a fund research firm, said that this was bad news for investors in the London-listed vehicle, which could have seen a fee reduction.
"We were also fairly sure that there was a plan to reduce PSH’s outsized bet on Universal Music with a sale of some of the position to the US sister fund,” the analyst said.
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However, QuotedData said that notwithstanding all of this bad news, Pershing Square Holdings shareholders have had a great run over the past year, with the shares up almost 30%, even after the recent Universal Music-related pullback.
Over five years the trust is up 171% compared with a 94% gain for the S&P 500 index. However, despite strong returns it trades on a 26% discount to net asset value.
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