Bill Ackman dumps Berkshire, adds to other holdings with hedge fund up more than 20% this year

Published Wed, May 27 20203:56 PM EDTUpdated Fri, May 29 20209:06 PM EDT

Pershing Square founder Bill Ackman said Wednesday on a call that the hedge fund sold its stake in Warren Buffett 's Berkshire Hathaway . Ackman also noted the fund's massive returns thus far in 2020 while the broader market struggles amid the coronavirus pandemic. "The one advantage we have over Berkshire is just relative scale," Ackman told investors during a conference call on Wednesday. "Berkshire has the problem, if you will, of deploying $130 billion of capital." "Whereas, by virtue of our much smaller size … we can be much more nimble. So. our view was we should take advantage of that nimbleness, preserve some extra liquidity in the event that prices get more attractive again," Ackman said. Berkshire was one of Pershing Square's biggest holdings, accounting for 10.7% of its entire portfolio through the end of March, according to FactSet. Pershing's stake was first revealed last year through a regulatory filing. Pershing's exit from Berkshire Hathaway was revealed after Buffett warned at the company's annual meeting in May that the economy faces a wide range of outcomes amid the coronavirus pandemic. "We just pulled the train off the tracks and put it on a siding. And I don't really know of any parallel — in terms of a very, very well the most important country in the world, most productive, huge population — in effect sidelining its economy and its workforce," Buffett said on May 2 . Buffett also revealed he dumped his stake in the airline industry because of the uncertainty the indsutry faces due to the coronavirus . Ackman has been a longtime student of Buffett's teachings and investment strategies. In 2015, Forbes called Ackman " Baby Buffett ." Ackman has also asked questions at Berkshire's annual shareholder's meeting before. Pershing also sold its stakes in Blackstone and Park Hotels & Resorts , Ackman said. Funds up big Ackman told Pershing investors the company's hedge funds are up between 22% and 27% for 2020 while the S & P 500 remains down over 7% year to date. A big chunk of those gains came from a massive bet against the broader market as the coronavirus pandemic forced the global economy into a screeching halt. Ackman netted a profit of $2.6 billion from that bet. "This is a case where you could just look East and see what was happening in China," said Ackman. "The Chinese were incredibly aggressive in shutting down the virus by basically quarantining a very large city and region and then shutting down big portions of their economy. As we though about that, we were unfortunately very confident that … it would not be long before this was on our shores." "Fortunately, the nature of the companies we own ... are the kinds of businesses that are meant to withstand Black Swan type of events," Ackman said. Ackman added on the call that Pershing Square has increased its stakes in Agilent Technologies , Hilton Worldwide , Howard Hughes , Lowe's and Restaurant Brands . Agilent, one of Pershing's biggest holdings, is flat for the year but has jumped about 20% in the second quarter. Hilton and Restaurant Brands are both down sharply for 2020, but have rallied 21% and 38%, respectively, since March 31. Howard Hughes has eked out a small gain quarter to date while Lowe's has soared more than 47% in that time.

Bill Ackman, founder and CEO of Pershing Square Capital Management.

Adam Jeffery | CNBC