Insiders

Ackman says owned stake in Hilton, a previously unnamed bet

August 16, 2017 at 02:17 pm EDT

BOSTON (Reuters) - Investor William Ackman said on Wednesday his hedge fund had bought and sold a stake in Hilton Worldwide Holdings, identifying the portfolio company that recently earned him a double digit return.

Ackman and one of his partners told investors on a conference call that they have long admired the hospitality company and made the investment last year as Hilton was trading at a temporarily depressed valuation.

Pershing Square Capital Management owned a roughly 5 percent stake but sold out within the last two months, Ackman said, noting that the stock price ran up too quickly and prevented him from buying more.

"Our big disappointment here is we were never able to make it as large a position as we would have liked," Ackman said, adding that it finished up "about 30 percent versus our average cost where we exited."

Despite the gains from Hilton, Ackman's funds are flat to down nearly 2 percent for the year, he said, adding that Chipotle Mexican Grill, Herbalife and government sponsored enterprises Federal National Mortgage Association and Federal Home Loan Mortgage Corp have weighed on performance.

For years any word from Ackman about a new idea could send the company's stock racing. But after two years of double-digit losses, Ackman is looking for a win and has tried to keep some bets under wraps.

That includes his most recent investment, a $4 billion bet on human resources software company Automatic Data Processing Inc which Pershing Square previously owned between 2009 to 2011.

To make that bet, Ackman said he raised $500 million in a special purpose vehicle to invest in ADP.

While Ackman will lay out his case for improving performance at ADP on a conference call on Thursday, he said on Wednesday that if management had been quiet he might have worked more collaboratively with the firm.

"Had they given us a week, I don't think we'd be in a proxy contest," Ackman said just days after proposing three people, including himself, as independent board directors.

The company announced Ackman's investment earlier this month and said he was seeking to fire Chief Executive Officer Carlos Rodriguez and control the company. The CEO later called the fund manager a "spoiled brat" on television.

Ackman hit back on Monday in a filing which disclosed that Rodriguez had accidentally sent him an email intended for the ADP legal team in which the CEO dismissed Ackman's pledge to work collaboratively as not credible.

(Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama and Tom Brown)

By Svea Herbst-Bayliss

Stocks mentioned in the article

	Add to a list Add to a list 0 selected To use this feature you must be a member Log in Sign up	Price	Change	5d. change	Capi.
	LINE CORPORATION	5,350 JPY	-.--%	-0.19%	12.52B
	AUTOMATIC DATA PROCESSING, INC.	246.3 USD	-0.13%	+1.69%	101B

William Ackman

William (Bill) Ackman is the founder and CEO of Pershing Square Capital Management, an American hedge fund that holds shares in Wendy’s International and McDonald’s Corporation. As well it has interest in Target Corp., the second largest discount company in US.

Graduated at Harvard College, he holds also an MBA from Harvard Business School. He began his career working for his father in the real estate, and in 1993 he founded Gotham Partners Management Co. This investment company encounters some troubles including legal problems that will lead to its dissolution in 2003.

In 2004, William Ackman comes back on the financial stage. He has created Pershing Square Capital, and he showed a lot of activism buying massive share in the lowest price for resale in two years maximum. A short-term strategy often criticized by the US Medias. His different attacks against FSA, American division of Dexia, and also against MBIA and Ambac, that it forecast the collapse, earned him a strong enmity in financial world.

In 2007, William Ackman took a share up to 5 millions of dollar (3,5%) in Sears Holdings, third group in distribution sector in US, behind Wal-Mart and Home Depot.

Pershing Square Capital Management manages approximately 2.4 billion of dollar of which 40% was invested in shares of McDonald.

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Pershing Square Capital Management LP Pershing Square Capital Management LP Investment ManagersFinance Pershing Square Capital Management LP (PSCM) is an independent, SEC-registered investment advisor and hedge fund manager headquartered in New York City. The firm was founded in 2003 by William Ackman and David Berkowitz. PSCM provides investment advisory services to a variety of private investment funds.	Chief Executive Officer
Pershing Square Foundation	Founder

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