Berkshire Hathaway Inc BRK'B:NYSE

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Ackman's Pershing Square Capital Exits Hedge Positions, Generates $2.6 Billion for Funds

9:43AM ET 3/25/2020 MT Newswires
Pershing Square Capital has exited its hedge positions, generating about $2.6 billion for its funds versus premiums and commissions of about $27 million, and added to its investments in Agilent (A), Berkshire Hathaway (BRK.A, BRK.B), Hilton (HLT), Lowe's (LOW) and Restaurant Brands (QSR), manager Bill Ackman said in a letter to investors on Wednesday.

The firm also re-established its investment in Starbucks (SBUX) that it had exited in January. After the redeployment of proceeds, the company still has a cash position of about 17% of its portfolio, he said.

Ackman said Pershing disclosed on March 3 that it had acquired hedges in the form of credit protection on investment-grade and high-yield indexes.

In the letter to investors, he said he believes reopening the economy before the COVID-19 pandemic is contained could result in increased deaths and overcrowd the US medical system. A 30-day lockdown of the country "makes sense" and minimizing person-to-person interaction for two weeks beyond the infection will curb the disease's spread.

"Some have argued that we should fully reopen the economy now, as the coronavirus kills mostly the old and immune-compromised, and a relatively small percentage of those infected," Ackman said. "Beyond the ethical considerations of such an approach, it has become increasingly clear that the high percentage of younger US citizens with co-morbidities -- including obesity, diabetes, and hypertension, as well as those who take medications for other conditions that reduce immunity, and/or who smoke or vape -- will have a substantially higher death rate than has been experienced in other countries."