Bill Ackman, the renowned hedge fund manager, is having a difficult year as his portfolio continues to underperform the broader U.S. stock market, while several of his recently launched investments have also declined. As a result, his net worth has fallen sharply from its peak earlier this year.
Bill Ackman’s Returns are Lagging the Market This Year
Pershing Square data shows that the company’s portfolio has dropped by 9.3% this year. In contrast, the S&P 500 and Nasdaq 100 indices have jumped by 9.6% and 13.4% in this period.
Ackman has also underperformed other hedge funds, with Point72 and Millennium gaining by 14.5% and 10.5% in the year’s first half. Pinpoint Asset Management and Dymon Asia returned 16.9% and 15%, respectively.
Pershing Square has underperformed as some of its portfolio companies have struggled this year. Brookfield Corporation (NYSE:BN), a key part in its portfolio, has dropped by 5.3% since January.
Other companies in the portfolio like Uber, Hertz, and Restaurant Brands have also underperformed the market. Freddie Mac and Fannie Mae have also not done well.
As a result, Bill Ackman’s net worth has continued falling this year. After peaking at $14.3 billion earlier this year, it has now dropped to $10 billion.
Ackman Has a History of Making Comebacks
On the positive side, Ackman has a long history of making comebacks. He closed Gotham Partners, his first hedge fund in 2003 after making ill-timed bets in real estate, golf, and small-cap companies.
However, he also suffered major losses, including $4 billion in Valeant Pharmaceuticals and $1 billion in Herbalife. He also lost money in Target and JCPenney.
After recording substantial annual declines between 2015 and 2018, he staged a remarkable comeback in 2020, delivering a 70% return for the year. Since then, his fund has generated positive returns in every year except one.
Image: Shutterstock