Per Bloomberg's count, the world's 500 richest people lost a combined $1.3 trillion since the beginning of 2020, after recent stock selloffs obliterated all of earlier months' gains. But one smart anomaly, hedge fund billionaire Bill Ackman, manages to profit handsomely in a time when everyone is losing money.
At the beginning of March, Ackman revealed that his investment firm, Pershing Square Capital Management, had bought $27 million worth of credit protection on global investment-grade and high-yield credit indexes in late February to limit portfolio loss amid coronavirus-spurred market volatility.
The timing of those investments couldn't have been better. Major stock indexes began their free fall on March 6 and hit the rocket bottom on Monday. The same day, Ackman finished unwinding those hedges and reaped $2.6 billion in proceeds.
"The proceeds of the hedges have enabled us to become a substantially larger shareholder of a number of our portfolio companies, and to add some new investments, all at deeply discounted prices," Ackman wrote in a letter to shareholders on Wednesday. Pershing Square's major stakes include Agilent Technologies, Berkshire Hathaway, Hilton Worldwide Holdings, Lowe's and Restaurant Brands International.