Benzinga - by Surbhi Jain, .
Billionaire investor Bill Ackman‘s Pershing Square Capital Management made a strong comeback in 2023, boasting an impressive return of 26.7%. This resurgence steers the hedge fund back on track, reinstating its history of delivering double-digit profits to Ackman’s investors.
This surge eclipsed broader market gains like that of the S&P 500 Index, which is tracked by the SPDR S&P 500 ETF (NYSE:SPY). The benchmark S&P 500 finished 2023 with a commendable 24.2% gain. Pershing Square’s outperformance may be signalling a rebound from the preceding year’s downturn, as unveiled in a Jan. 2 report.
The setback faced in 2022 was triggered by concerns around interest rates, inflation, and geopolitical tensions. The hedge fund experienced a downturn in 2022 with an 8.8% loss, a stark contrast to its impressive gains of 26.9% in 2021, 70.2% in 2020, and 58.1% in 2019.
While specifics driving last year’s growth were not detailed, notable holdings like Chipotle Mexican Grill (NYSE:CMG) and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) contributed significantly. Chipotle observed a remarkable 63% rise, while Alphabet, a recent addition to the portfolio, saw a substantial 55% increase in 2023.
Also Read: Chipotle Mexican Grill To Gain From Higher Traffic, Stable Beef Prices & More: Analyst
Pershing Square’s substantial holdings in Restaurant Brands International (NYSE:QSR) and Hilton Worldwide Holdings (NYSE:HLT) further bolstered its performance. QSR, representing about 15% of the portfolio, saw a nearly 25% gain in 2023, while HLT appreciated by approximately 45%.
Looking forward, the sustainability of such strong performance in 2024 is uncertain. The optimism among investors is fueled by the prospect of FED rate cuts, encouraging analyst opinions on inflation, and various critical market dynamics. The success of Ackman’s fund in the coming year will hinge on how effectively it adapts to these evolving trends.
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