VRX drove Pershing Square Capital Management in July. PAH did not
Pershing Square Capital Mgmt returns an estimated 6.35% for July 2015 - the fully hedged version returns 6.06%
Bill Ackman's Pershing Square Capital Management generated a 6.35% return on their publicly disclosed long portfolio for the month ending July 2015, outperforming the S&P500 by 634 basis points (bp). On a hedged basis, the portfolio would have returned 6.06% StockAlpha over the same period. Pershing's StockAlpha reflects the return of the net return if each security in their portfolio was hedged with a sector ETF, such that the resulting portfolio was market, beta and sector neutral. StockAlpha in the Health sector contributed the most to StockAlpha during the month.
Positive Contributors to Pershing's Returns
Pershing’s position in Valeant Pharmaceuticals International Inc (ONT) (VRX) contributed the most to the performance of the manager’s long-portfolio during the month. Over the month of July 2015, Pershing's 25.8% position in Valeant Pharmaceuticals International Inc (ONT) (VRX) increased in value by 17.8%, contributing 4.6% (25.8%*17.8%=4.6%)to the long portfolios overall return. Looking at Pershing's portfolio through a fully hedged StockAlpha lens, the holding of Valeant Pharmaceuticals International Inc (ONT) (VRX) also provided the largest contribution to fully hedged returns. Valeant Pharmaceuticals International Inc (ONT) (VRX) returned 17.8% during the month compared to the Health sector, which returned 3%. As a result, after taking into account Valeant Pharmaceuticals International Inc (ONT) (VRX)'s beta relative to its sector, the position contributed 3.7% of StockAlpha to the Pershing’s monthly performance.
Negative Contributors to Pershing's Returns
Much of the drag on Pershing’s long-portfolio during the month can be attributed to the holding of PLATFORM SPECI (PAH). Over the month of July 2015, the manager's 7.3% position in PLATFORM SPECI (PAH) returned -9%, contributing -0.66% (7.3%*-9%=-0.66%)to the long portfolios overall return. Looking at Pershing's portfolio through a fully hedged StockAlpha lens, the holding of PLATFORM SPECI (PAH) also provided the most negative contribution to fully hedged returns. PLATFORM SPECI (PAH) returned -9% during the month compared to the Materials sector, which returned -5%. As a result, the position contributed -0.4% of StockAlpha to the manager’s monthly performance.
Overlap with other hedge funds
Among Pershing’s top 10 largest positions, Actavis Plc (ACT) is the name that is owned by most other hedge funds. 26.5% of hedge funds within Symmetric's universe had a position in Actavis Plc (ACT) as of March 31, 2015, making it a consensus name relative to other stocks. Pershing initiated its position in Actavis Plc (ACT) 0 years ago. Other hedge funds that have significant ownership stakes in Actavis Plc (ACT) include Ratan Capital Management Lp (16.4% position initiated 1 year ago), Sachem Head Capital Management (15.8% position initiated 0.5 years ago) and Oskie Capital Management Llc (11.5% position initiated 1 year ago). Overall, Pershing's book is neither consensus or contrarian, with the average position held in the portfolio held by 12.4% of hedge funds.
Use Symmetric to surface managers with unique sources of alpha and flag those that may be in trouble.
