Billionaires Portfolio: Billionaire investor, Bill Ackman, has one of the best investing track records in the world. When you add back fees, Ackman has returned 1,199% since starting his fund in 2004. That compares to 119% in the S&P 500 for the same period. That’s ten times better than the S&P 500.
Of course, if you invested in his fund back in 2004, you had to pony up a huge initial investment, likely $5 million or more. You had to agree to remain invested in the fund period of time, likely three years at minimum. And you had to pay Mr. Ackman a big cut of that handsome cumulative return. With that, after Ackman has taken his cut throughout the past decade, investors that have been in his fund since day one sit with a cumulative return of 627%. They put all of the money up, but they share in just a little more than half of the total profits generated on their money during the past ten years. Still, no one would argue with a seven-fold return over the past ten years. It’s outstanding.
In his recent letter to investors, Bill Ackman explained that there is no need to pay him fees. He admits that following his portfolio is easy. He says “free riders” can follow him “with none of the costs or the illiquidity, and with all of the upside.” In plain English, this means you can piggy-back his investments without paying him fees, without putting up a muli-million dollar minimum investment in his fund and without having your money locked up for three years.
How is this possible, you might ask? When Bill Ackman’s fund, Pershing Square Capital Management, takes a stake of 5% or more of a company, he is required to notify the SEC within 10 days, through a public disclosure filing called Schedule 13D. And then on a quarterly basis, Ackman is required to file form 13F with the SEC. This filing discloses all of his fund’s positions. Ackman says, looking back, in 87% of the activist campaigns they’ve launched, the public could have bought the stocks at a “bargain price” even the day after he made his public filing.
While Ackman is one of the best performing investors on the planet, his portfolio might be one of the easiest to replicate. His fund holds just six positions.
Here’s a look at the holdings of Ackman’s $12 billion Pershing Square fund as of its last filing:
Allergan, Inc. (NYSE:AGN) – AGN represents 39% of his portfolio. He has a nearly $5 billion stake in the company.
Air Products & Chemicals, Inc. (NYSE:APD) – APD represents 21% of his portfolio. He has a $2.6 billion stake.
Canadian Pacific Railway Limited (USA) (NYSE:CP) – CP represents a 20% of his portfolio. He has a $2.5 billion stake.
Burger King Worldwide Inc (NYSE:BKW) – BKW represents 8% of his portfolio. He has a stake worth $1 billion.
Platform Specialty Products Corp (NYSE:PAH) – PAH represents 7% of his portfolio. He has a stake worth nearly $1 billion.
The Howard Hughes Corporation (NYSE:HHC) – HHC represents 4% of his portfolio. He has a stake of $563 million.
Ackman has 80% of his fund’s money in just three stocks. That shows extraordinary conviction, and it also means he can’t afford to lose. That conviction and confidence is present only because he has the ability to gain control of, and influence on, the companies he invests in.
Please don’t miss the opportunity to learn more about me and how we follow Billionaire Investors into stocks by visiting the Billionaires Portfolio.
The insider behind the Billionaire’s Portfolio is William Meade. William started his career with Wood Asset Management. Wood Asset Management was a $1.5 billion dollar institutional asset management firm and hedge fund, founded by Gary Wood, a former Goldman Sachs Partner and Harvard MBA. At Wood, William helped manage equity and fixed income portfolios for major university endowments, Fortune 500 pension funds and super high net worth clients (including 2 billionaire families).
Next, William was Director of ETF and Mutual Fund Research for Zacks Investment Research in Chicago. At Zacks, he worked with the founder Len Zacks, a PHD from MIT, in developing and maintaining a proprietary model that ranked over 20,000 ETFs and mutual funds. This model was viewed and used by over 150,000 people monthly, and was published in US News and World Report, and featured on CNN, Yahoo Finance, and Fortune.com.
William received a Masters in Economics from Johns Hopkins University, including PhD level coursework in International Economics. At Johns Hopkins, Mr. Meade was taught by Economists from The Federal Reserve and Department of Treasury. While at Johns Hopkins Mr.Meade consulted for a top hedge fund in Washington DC.