Finance

Bill Ackman is bragging about a mystery investment doing really well as hedge fund trails market

Key Points
  • Pershing Square's Bill Ackman discussed his fund's performance Wednesday on a quarterly call.
  • He said an undisclosed position has risen "slightly more than double digits" so far this year.
  • Ackman told investors to expect an update on the mystery investment "once we exit."
William Ackman speaking at the 22nd Annual Sohn Investment Conference on May 8, 2017.
Heidi Gutman | CNBC

Hedge fund Pershing Square has an unnamed investment position that is up big so far this year, founder Bill Ackman said on an investor call Wednesday.

"Our undisclosed position [is] up slightly more than double digits," he said on the firm's quarterly call.

But Ackman said year-to-date performance for Pershing ranged from 1.9 percent to 3.6 percent, depending on the specific fund. The S&P 500 is up more than 7 percent this year at record highs. Pershing managed more than $10.9 billion at the end of 2016.

Ackman told investors in January he had put 10 percent of the fund's capital in two new positions, but declined to reveal what they were.

"We made two new investments over the past four months. One we continue to retain," Ackman said on Wednesday's call. "We believe it's an attractive investment and if were priced at a lower price we would buy more."

The hedge fund manager said the name he still holds is up roughly 30 percent. That investment comprises 5 percent of capital, he said. "The only disappointment on our part is that we did not get enough before the stock started to run."

And here's the kicker. It sounds like he's not planning on letting it get out what this position is until Pershing has already sold.

"We still like it at the current share price, [but] not enough to add," Ackman said. "Once we exit, you can expect some type of update from us on that investment."

Ackman said his firm already exited the other investment due to "business developments at the company that caused us to question our decision to continue to hold the investment." Depending on changes in the business, "we may enter again," he said.

On Monday, Ackman reiterated a recommendation on shares of Howard Hughes at the Sohn Investment Conference, presented by CNBC.

A short position in Herbalife and declines in Fannie Mae and Freddie Mac contributed to "big losses" for Pershing Square, Ackman said. Fannie and Freddie both lost just more than 30 percent, while Herbalife is up 51 percent.

On the call, Ackman maintained his negative view on Herbalife and said he expects resolution on restructuring of Fannie and Freddie to come in the next 18 months, "well within our time frame."

— With reporting by CNBC's Amanda Lasky.