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Billionaire Bill Ackman’s hedge fund beats S&P 500 by this much in 2023

Billionaire Bill Ackman’s hedge fund beats S&P 500 by this much in 2023
Elmaz Sabovic

The hedge fund managed by billionaire investor Bill Ackman, Pershing Square Capital Management, delivered a notable return of 26.7% last year, surpassing broader stock market gains, among which is the S&P 500 and rebounding from the previous year’s loss, as detailed in a report from January 2. 

This performance restores the hedge fund to its established pattern of double-digit gains for Ackman’s investors, following a setback in 2022 when concerns about interest rate hikes, inflation, and geopolitical uncertainties triggered a decline in stock values.

In comparison, the benchmark S&P 500 index ended 2023 with a 24.2% gain.

Rebound from 2022, and biggest holdings

In 2022, Pershing Square Capital Management experienced a loss of 8.8%, contrasting with gains of 26.9% in 2021, a surge of 70.2% in 2020, and a climb of 58.1% in 2019.

Although the firm did not specify the factors driving the increase last year, notable portfolio companies such as Chipotle Mexican Grill (NYSE: CMG), a long-standing holding, witnessed a rise of over 63%. Additionally, Alphabet (NASDAQ: GOOGL), the parent company of Google and a recent addition to the portfolio, registered a 55% increase.

Restaurant Brands International (NYSE: QSR), Pershing Square’s second-largest holding at around 15% of its portfolio, is the world’s leading quick-service restaurant company, owning popular brands like Burger King, Tim Hortons, POPEYES, and Firehouse Subs. In 2023, QSR stock gained nearly 25%.

Hilton Worldwide Holdings (NYSE: HLT), representing about 15% of Ackman’s holdings, is a prominent hospitality company with a diverse portfolio of 22 brands and over 7,400 properties worldwide. HLT stock appreciated approximately 45% in 2023.

Whether this strong performance will continue in 2024 remains to be seen, as investors are optimistic about the announced FED rate cuts, bullish views from analysts on inflation, and other significant market factors.

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