Bill Ackman of Pershing Square published his 2Q10 letter. Here are the scorecard for his funds:
Bill Ackman beat the benchmarks handily, in short term or long term.
In the letter, Ackman commented on some of his investments, of which I found these comments interesting:
Pershing Square Q2 10 Investor Letter
Also check out:
Bill Ackman beat the benchmarks handily, in short term or long term.
In the letter, Ackman commented on some of his investments, of which I found these comments interesting:
General Growth Properties Inc.
Since our last letter, continued progress has been made towards GGP’s emergence from bankruptcy. On July 13th, GGP filed its Plan of Reorganization and Disclosure Statement with the Bankruptcy Court, with an expected emergence from bankruptcy in October 2010. As part of the Plan, GGP will emerge as a well-capitalized mall REIT, and will spin off the currently unnamed “Spinco,” a real estate company that will own the former GGP’s master planned communities and a diversified portfolio of real estate with near, mid- and long-term development opportunities.
Over the past few months, GGP has continued to improve upon its original recapitalization plan by increasing the likelihood that it will raise replacement capital on more favorable terms. Largely due to the fact that GGP is still in chapter 11, its stock continues to trade at a substantial discount to our view of intrinsic value. We believe a large part of this discount should be eliminated after the company emerges from bankruptcy, is included in the REIT indices, and after the stock has been fully distributed to longer-term owners.
Borders
The most significant corporate event relating to Borders during the quarter was the Barnes & Noble board’s decision to pursue strategic alternatives, which was likely due to pressure from the company’s largest outside shareholder, Ron Burkle. We have long believed in the strategic logic
of a business combination between the two largest superstore companies. We also believe that B&N’s chairman and largest shareholder is more likely to be a seller than a buyer of the company. We believe that any third-party acquisition of B&N will significantly increase the probability that Borders is included in a potential industry consolidation, because of the significant cost economies and other synergies that could be achieved in such a combination.
Other Investments
The balance of our portfolio companies including Target, Kraft, Corrections Corp., Citigroup, Aliansce, and ADP (which we recently reacquired as its stock price dropped slightly and it reported strong quarterly performance) continued to report, for the most part, strong results. Our portfolio companies’ respective stock price performances have been muted, however, as investors have been unwilling to extrapolate near-term company results into the future as there is continued fear of a U.S. double-dip recession and continued global economic weakness. The resulting investor pessimism has caused stocks – even those of large capitalization, dominant, economically resilient business franchises which are the focus of our investment strategy – to trade at substantial discounts to our estimates of business value.
We believe that this is an excellent environment for us to identify potential new situations. We are currently analyzing a number of investments which appear to offer large opportunities for profit with limited downside risk, where we believe that we can be a catalyst for unlocking value.
Pershing Square Q2 10 Investor Letter
Also check out:
