Billionaire investor William Ackman's fund surged 3.8 percent in January, handily beating the stock market's decline and taking some of the sting away from last year, when losing trades involving J.C. Penney and Herbalife dragged on his fund's performance.
Ackman's $12 billion Pershing Square Capital Management told clients that its Pershing Square LP fund gained 3.8 percent, after fees, last month according to a performance update sent to investors earlier on Tuesday and seen by Reuters.
The Standard & Poor's 500 index dropped 3.5 percent in January and the average hedge fund slipped 0.24 percent, according to data from Hedge Fund Research.
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Ackman did not say which bets powered returns during the month, but it is clear that his holding in Beam helped with the stock surging 22 percent this year in the wake of news that Japan's Suntory will buy the company.
As an activist investor, Ackman tends to hold only a handful of stocks at a time. In January he listed 14 positions, including two short positions.
Burger King Worldwide is another winner, having gained 6.08 percent this year. Also Herbalife, where Ackman has a $1 billion short bet, is no longer as much of a drag on performance as last year now that the stock price has dropped this year.
The returns would be welcome news to investors who earned only a 9 percent return with Ackman last year when the Standard & Poor's 500 index surged 32 percent.
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Last year Ackman lost $500 million on an investment in J.C. Penney and his loss on Herbalife swelled as the company's stock price rose.
For many hedge fund managers the start of the year has been rocky because of the stock market's sharp decline. Daniel Loeb's Third Point, one of last year's biggest winners, told his investors that his flagship Third Point Offshore fund lost 1.8 percent last month.