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Billionaire investor Bill Ackman turned $27 million into $2.6 billion by betting that the coronavirus would tank the market

Pershing Square Capital Management CEO Bill Ackman minted a multibillion-dollar profit as coronavirus fears tanked US stocks.

The hedge-fund billionaire turned a $27 million position into $2.6 billion through defensive hedge bets, a Wednesday letter to investors said. The profit offset losses elsewhere in the firm’s portfolio and helped Ackman’s public fund land a 7.9% gain in March through Tuesday’s close, The Wall Street Journal reported. The S&P 500 slid 17% over the same period.

The hedge fund began liquidating its protective bets last week after unprecedented action from the Federal Reserve and the Treasury Department shifted sentiment toward corporate credit health. Ackman fully exited the position on Monday, the same day the US central bank announced it would begin buying corporate bonds to prop up the battered market.

Ackman has since used the profits to bolster Pershing Square’s investments in Berkshire Hathaway, Hilton, Lowe’s, Restaurant Brands International, and Agilent. The fund also reestablished a stake in Starbucks after selling its position in January.

Source: BI



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