Hedge-fund manager Bill Ackman, chief executive of Pershing Square Capital Management, said Wednesday that his firm has exited equity stakes in Warren Buffett’s Berkshire Hathaway (BRK.B) - Get Report and Blackstone Group (BX) - Get Report, the world’s largest private equity firm.
Ackman said he still liked Berkshire but the market’s recent turmoil might generate better investment opportunities.
Pershing had a $1 billion stake in the industrial group, accounting for 15% of its stock portfolio at the end of March, according to Markets Insider.
One problem is Berkshire’s size, he said. It has to deploy $130 billion of capital, compared with $10 billion for Pershing Square, Ackman said.
“The one advantage we have versus Berkshire is relative scale,” the prominent investor said on a conference call, according to Bloomberg.
That makes Pershing a nimbler investor. “We should take advantage of that nimbleness, preserve some extra liquidity, in the event that prices get more attractive again,” Ackman said.
Ackman said he exited Blackstone and Park Hotels because he wasn’t able to form big enough positions at low prices before the market came storming back.
As of May 19, Pershing Square investments returned 21% year to date, according to the company’s website.
Hedging against the market’s plunge amid the coronavirus pandemic enabled Ackman to turn $27 million into $2.6 billion.
He used the enormous profit in March to lift Pershing’s holdings of Berkshire, Hilton (HLT) - Get Report, Lowe's (LOW) - Get Report, Burger King owner Restaurant Brands (QSR) - Get Report, and Starbucks (SBUX) - Get Report.