Hedge Funds

Ackman's hedge fund Pershing Square surges 25% in first half

Bill Ackman
Adam Jeffery | CNBC

Activist investor William Ackman's main fund climbed 25 percent during the first half of 2014, ranking the billionaire as one of this year's top hedge fund industry performers.

Ackman told clients of his Pershing Square Capital Management hedge fund that its main portfolio rose 2.4 percent in June, putting the fund up 25 percent for the year, according to two investors.

The performance marks a huge comeback for Ackman from 2013, when big losses on Herbalife and JCPenney hurt the portfolio. In last year's first half, the fund was up roughly 6 percent.

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Strong gains in its top holdings, including Canadian Pacific, Air Products & Chemicals and Burger King Worldwide helped fuel the rise. Ackman has spent much of June trying to convince pharmaceutical company Allergan, in which he is the biggest investor, to sell itself to rival Valeant Pharmaceuticals, with which he is working to negotiate a deal.

As the battle for Allergan rolls on, it has taken some of the spotlight away from Herbalife Ackman's high-profile short bet. In June, Herbalife's share price climbed, even though it is still down for the year.

Many hedge fund managers are still compiling half-year performance data. But Ackman, with something to brag about, has been quick to release his numbers to clients.

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Hedge fund results are often closely guarded secrets, so information on how prominent managers performed is often seen as a bellwether for industry returns. The average hedge fund gained 1.77 percent in the first half of 2014, according to Hedge Fund Research.

Pershing Square now manages $14.7 billion, up from $11.2 billion a year ago, for wealthy clients and pension funds, including New Jersey's state retirement fund and the Arkansas Teacher Retirement System.

"When you are with the best of the best, there is no being excited about these numbers,'' George Hopkins, executive director at Arkansas Teacher Retirement System, said of the returns. "It just confirms what you already knew. Brilliant people will make you money over time.''

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— By Reuters