By Svea Herbst-Bayliss
BOSTON (Reuters) – Billionaire investor William Ackman is making money on one of his new investment ideas, but he declined on Wednesday to identify the portfolio company, which has gained 30 percent since he first bought it.
Less than four months after telling clients that he had made two new and undisclosed bets, he gave a little more information about either on a quarterly investment call on Wednesday.
One makes up roughly 5 percent of Pershing Square (NYSE:) Capital Management's $ 11 billion of capital and has gained about 30 percent, Ackman said. The other, which constituted as much as 10 percent of the fund's capital, has been sold, he said.
For years, any word from Ackman about new names often sent stock prices higher as investors expected the activist to push for better returns and shake up management. He currently owns stakes in fast food restaurant chain Chipotle Mexican Grill Inc (NYSE:) and snack maker Mondelez International Inc (NASDAQ:) among others, and sold out of Valeant Pharmaceuticals International Inc (NYSE:) this year.
After two years of double-digit losses in his own portfolio, Ackman has been less voluble about new ideas lately. On Monday, at the Sohn Investment Conference he discussed Howard Hughes Corp, a holding since 2010, instead of unveiling the current winning name. His funds are up between 1.9 percent and 3.6 percent this year.
Ackman said he still likes the unidentified winning company and regrets that he was not able to buy more before the stock's price began to take off. “We believe it's an attractive investment and if it were priced at a lower price we would buy more,” he said. He said he is not required to disclose the name for regulatory reasons.
The second unnamed bet, which made up between 9 percent and 10 percent of the fund's capital, has been sold, Ackman said, noting that business developments at the company prompted him to get out. He said the firm could re-enter the company if the developments are sorted out.
Ackman said his research team is conducting due diligence on two possible new investments. “These are both simple, predictable, free cash flow generative businesses,” he said, calling them typical Pershing Square investments but cautioning that there is no certainty either will be added.
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