Pershing Square Capital Management
|Headquarters||888 7th Avenue, New York City|
|AUM||US$8.2 billion (March 2018)|
Ackman is known to occasionally hire people outside of traditional finance backgrounds; for instance, his professionals have included a former fly fishing guide, a former tennis pro, and "a man whom he met in a cab."
In 2005, Pershing bought a significant share in fast food chain Wendy's International and successfully pressured them to sell its Tim Horton's doughnut chain. Wendy's spun off the Canadian restaurant donut chain through an IPO in 2006 and raised $670 million for Wendy's investors. After Ackman sold his shares at a substantial profit after a dispute over executive succession, the stock price collapsed, raising criticism that the sale of Wendy's fastest growing unit left the company in a weaker market position. Ackman blamed the poor performance on their new CEO.
In December 2007, his funds owned a 10% stake in Target Corporation, valued at $4.2 billion through the purchase of stock and derivatives. His funds now own a 7.8% stake. In December 2010, his funds held a 38% stake in Borders Group and on December 6, 2010, Ackman indicated he would finance a buyout of Barnes & Noble for US$900M.
On January 9, 2009, the fund disclosed a 7.4% ownership stake in General Growth Properties (GGP) according to documents filed with the SEC, becoming the second-largest shareholder behind Brookfield Asset Management. The fund was betting on the company to go bankrupt in a way that would leave its shareholders intact. In November 2010, Pershing Square helped the company emerge from Chapter 11 bankruptcy protection. As of August 2012 the fund holds beneficial ownership of 7.7 percent of General Growth's stock.
In July 2012, Ackman acknowledged to CNBC that he had acquired shares in Procter & Gamble worth approximately $1.8 billion, a 1% stake in the company, with the idea of taking an activist role within the corporation. Pershing Square later reduced its stake in Procter & Gamble, which was valued at around $60 million by the end of 2013.
In the first quarter of 2016, the hedge fund experienced its "biggest-ever quarterly loss" of 25%, due in part to its 9% stake in Valeant Pharmaceuticals International. Ackman, who joined Valeant's board in March 2016, commented on the company's 88% loss since August 2015 stating, “This is going to be a badly scraped knee that may even require stitches but it is not life threatening... We should be able to recover the lion's share of our investment—if not all of it—over time".
In December 2012, Ackman announced that the firm had made a $1 billion short bet against Herbalife, a maker of weight-loss and vitamin supplements, calling the company a "pyramid scheme". After activist billionaire investor Carl Icahn bought a stake in the company in January 2013, the share price rose nearly 13% and the investment was seen by analysts as the worst investment ever made by the firm. After a persistent political and grassroots campaign funded by Ackman and the firm, the Federal Trade Commission initiated a civil investigation into Herbalife, causing its stock to drop enough that by March 2014, Pershing Square was nearly even on their bet. In April 2014, Reuters reported that, according to its sources, the FBI conducted a probe into Herbalife and reviewed documents obtained from the company's former distributors.
In March 2015, U.S. District Judge Dale Fischer dismissed a suit filed by Herbalife investors alleging the company is operating an illegal pyramid scheme. On March 12, 2015, it reported that Ackman was under investigation by federal prosecutors and the FBI; Ackman was quoted that he would not back down from his claims against Herbalife.
Platform Specialty Products Corporation
As of June 2014, Pershing Square is the largest institutional holder of the shares of Platform Specialty Products Corporation (NYSE: PAH), owning a 24.28% stake. Pershing first disclosed the position in January 2014, shortly after Platform debuted on the New York Stock Exchange. Subsequently, in April 2014, Platform announced a deal to acquire the agrochemicals business of Chemtura for approximately $1 billion. Agriphar, another agricultural specialty chemicals company, agreed in August 2014 to become the third company to join the Platform umbrella.
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- Cheffins, Brian R. (2014). "Hedge Fund Activism Canadian Style". University of British Columbia Law Review. 47 (1): 1-59) (Discussing Pershing Square's activities in Canada, and a unique cultural reluctance to support active value creation by ethical intervening shareholders). SSRN 2204294.
- Rojas, Claudio R. (2014). "An Indeterminate Theory of Canadian Corporate Law". University of British Columbia Law Review. 47 (1): 59-128 ("The author's perspective on Berkshire Hathaway's investment philosophy was informed by discussions with Warren Buffett in Omaha, Nebraska": pp. 59, 122-124). SSRN 2391775.