Bill Ackman has already earned billions on coronavirus

Experienced economists repeat that after each crisis, the rich get even richer and the poor even poorer. Are they exaggerating? Bill Ackman is a trader who turned USD 27 million into ... USD 2,6 billion last month. All thanks to the chaos in the markets related to the coronavirus pandemic.

This will not be an article about conspiracy theories and the fact that the coronavirus was created by a group that wanted to profit from it and take control of the world. Because you didn't have to do that to make billions. It was enough to "just" play in line with the trend and hold out for a long time. Who has made it? There are probably a lot of such people, but Bill Ackman's result is very impressive.

Who is Bill Ackman?

The investor has been known in the industry for many years. He runs a hedge fund Ackman Pershing Square Capital Management. In 2019, the whole Trader's world talked about him when  earned 40 percent on American shares in four months at a time when S&P 500 index "only" increased by 13 percent. Such a big breach of the benchmark is practically unheard of in the industry - especially in large capital management, and at that time his fund had USD 5,3 billion in capital, which he traded.

In the following months, he did less well because he believed that he was smarter than the market. He stubbornly bet, for example, on Herbalife's decline when it recorded further growth records. Despite this, it still belongs to the world leaders, both in terms of investment results and ensuring that it is loud.

USD 90 million apartment and Mexican food

Already in 2013, he boasted, among others the purchase of a residence occupying the entire 75th and 76th floor of the building at ul. West 57th Street in New York. For real estate, which he treats as an investment, he paid ... USD 90 million.

However, his portfolio includes mainly derivative financial instruments and shares. The basis is the Chipotle Mexican Grill Inc. package, a network of several hundred Mexican food bars, which has great results and is the driving wheel of its fund, which is periodically based up to 20 percent. on this company. However, he also invests in derivative financial instruments and they have earned him a fortune this year.

USD 2,6 billion from USD 27 million

Have we already written that Bill Ackman is stubborn? He knows it too and openly admits it.

"It was the most stubborn thing we've ever done" - he told Bloomberg in an interview. "Everyone had long positions, the market grew, broke new records. No fund has bet on shorts. " - he added in an interview with journalists.

Why has he been invited to all, not just industry media in recent days? Because he admitted that he had just completed the investment which he recently announced. Anyway, he didn't have to announce anything to the world. Everyone can check the composition of his wallet online.

Composition of Bill Ackman's wallet

This investment is USD 27 million for the purchase of credit protection on credit indices. He did this at the end of February, when credit spreads were higher, they were associated with limited risk of decline, but could potentially bring significant increases. I have brought. The investment has already been cashed. The result: $ 2,6 billion in proceeds, which it now spends on purchasing shares.

"Collateral inflows have allowed us to become a much larger shareholder in many of our portfolio companies and focus on new investments, all at significantly reduced prices" - wrote Bill Ackman in a letter to shareholders on Wednesday.

He bought, among others the Starbucks shares, which he sold in January, were purchased by Agilent Technologies, Berkshire Hathaway, Hilton Worldwide Holdings, Lowe's and Restaurant Brands International. And it still has 17 percent. cash while waiting for the next investment opportunities.

"If you can buy a Hilton for $ 60 when it was sold for almost $ 120, this is the opportunity" - emphasizes the investor.