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Bill Ackman told investors that his hedge fund has sold its $1 billion stake in Warren Buffett’s Berkshire Hathaway. The hedge-fund billionaire, a longtime outspoken Buffett acolyte, explained that the move was made to give his fund, Pershing Square Capital Management, the cash it needs to make the kind of investments that the 89-year-old Buffett …
Bill Ackman told investors that his hedge fund has sold its $1 billion stake in Warren Buffett’s Berkshire Hathaway.
The hedge-fund billionaire, a longtime outspoken Buffett acolyte, explained that the move was made to give his fund, Pershing Square Capital Management, the cash it needs to make the kind of investments that the 89-year-old Buffett no longer seems nimble enough to make himself.
“Berkshire has the problem, if you will, of deploying one $130 billion of capital … whereas by virtue of our much, much smaller size, today we have $10 billion of capital to invest,” Ackman told investors on a Wednesday afternoon call. “We can be much more nimble and so our view was generally we should take advantage of that nimbleness, preserve some extra liquidity in the event that prices get more attractive again.”
Buffett has weathered an onslaught of criticism after disclosing in early May that Berkshire lost $50 billion in the first quarter of 2020 and did not make any new investments during the coronavirus market plunge. Many investors interpreted the so-called Oracle of Omaha’s inertia as a signal that the fabled investor had lost his Midas touch during one of the biggest potential buying opportunities in market history.
Pershing Square, meanwhile, was up 27 percent on the year as of Wednesday, with Ackman’s investments in Lowe’s and Restaurant Brands making up for laggards like Chipotle and Hilton Hotels.
In March, Ackman reaped $2.6 billion by shorting credit markets in the weeks leading up to the COVID-19 outbreak that sent the global economy into tailspin and crashed the stock market by almost 40 percent.
Ackman took flack for an emotional appearance he made on CNBC calling for the economy to be shut down just days before he announced his extremely lucrative short.
