Pershing Square, managed by billionaire Bill Ackman, recently filed with the U.S. Securities and Exchange Commission a Form 13F, in which the fund disclosed its equity portfolio at the end of the fourth quarter of 2014. The portfolio contains only 7 positions, and is valued at $16.04 billion. The fund’s strong focus during the quarter was on healthcare stocks, which accounts for 51.2% of its portfolio. Allergan Inc. (NYSE:AGN), Air Products & Chemicals Inc. (NYSE:APD), Canadian Pacific Railway Limited (USA) (NYSE:CP), Zoetis Inc (NYSE:ZTS) are the top four largest holdings, in terms of value. These holdings will be discussed in this article.
New York-based Pershing Square is the hedge fund founded by Bill Ackman. Ackman is a long term value investor, who takes advantage of short term downward moves in prices. He is particularly successful at special situations investments. Pershing Square had around $12 billion in assets under management in early 2014. The fund lost 1.1% in 2011 but gained 12.4% in 2012, and 9.7% in 2013. Pershing Square performed extremely well in 2014, with a 40.4% return. Last month, in an interview on Bloomberg Television, Ackman discussed his investment strategy, stating that the main target of his fund’s investments are high quality companies that run a predictable business model and are capable of generating free cash flow.
Allergan Inc. (NYSE:AGN) continues to be the largest holding of Pershing Square, and was its biggest success story of 2014. The fund reported owning 26.64 million shares, worth $5.66 billion, at the close of the fourth quarter, a decrease of 2.24 million shares. Previously, Ackman’s fund disclosed holding 28.88 million shares of the company. Allergan Inc. (NYSE:AGN) is a healthcare company that has a market cap of $68.43 billion. Ackman tried to acquire Allergan, Inc. (NYSE:AGN) jointly with Valeant Pharmaceuticals Intl Inc (NYSE:VRX). However, after a pretty rough proxy fight, Allergan was sold to Actavis plc (NYSE:ACT), though the investment still paid off in the end for Ackman.
Allergan Inc. (NYSE:AGN) seems to be a favorite stock of John Paulson’s Paulson & Co, which increased its position in the company during the fourth quarter to 6.37 million shares. Another shareholder that sees value in the stock is Pentwater Capital Management, led by Matthew Halbower, which boosted its share of ownership during the fourth quarter to 5.59 million shares.
On the second position is Air Products & Chemicals Inc. (NYSE:APD), in which Pershing Square’s stake remained unchanged over the quarter. The investor revealed holding 20.55 million shares of the company as of the end of 2014. The holding is valued at $2.96 billion. Air Products & Chemicals Inc. (NYSE:APD) is an industrial gases company, which has a market cap of $32.81 billion. Other investors betting big on Air Products & Chemicals Inc. (NYSE:APD) include OZ Management, run by Daniel S. Och, which held 5.47 million shares of the company as of the end of 2014. During the fourth quarter, Andreas Halvorsen’s Viking Global added more shares to its holding of the company, bringing its ownership to 5.36 million shares.