Ackman's fund roars back in October, now up 8.5 percent for year

Reuters

By Svea Herbst-Bayliss

BOSTON, Nov 4 (Reuters) - Hedge fund manager WilliamAckman's fund came roaring back in October and is now up 8.5percent for the year, helping erase the memories of bruisinglosses only a few months ago.

Because of advances in Canadian Pacific Railway Ltd,Burger King Worldwide Inc and other investments,Ackman's Pershing Square Capital Management gained 7.9 percentlast month, said two investors who are not permitted to discussthe returns publicly.

Ackman also said in a monthly report to investors that headded two short positions. That is up from one, which is a shortbet on Herbalife Ltd, at the end of September, fuelingspeculation of what the new target might be.

Pershing Square's returns beat both the broader Standard &Poor's 500 stock index's 3.6 percent rise for October aswell as the average hedge fund's 5.4 percent gain for the yearto date.

This was a dramatic recovery from Pershing Square's lossesin July and August, when ailing retailer J.C. Penney Co Inc weighed on returns. Ackman exited his J.C. Penneyposition at the end of August.

The New York-based fund told investors, including pensionfunds in New Jersey, New Mexico and Massachusetts, that it hadlong bets on 11 securities, up from nine at the end ofSeptember. Assets under management are at $11.45 billion, closeto $12 billion at the start of 2013.

Ackman did not say what helped the portfolio and did notidentify the new positions. Over the last several months, he hasbeen trimming back some of his biggest holdings, raising cashfor unspecified new investments.

Nearly a year ago, Ackman disclosed a $1 billion shortposition in Herbalife with a highly public announcement thatraised eyebrows on Wall Street. While Herbalife's stock priceinitially fell, it quickly recovered and is up 84 percent thisyear, leaving Pershing Square with hundreds of millions ofdollars in unrealized losses. But the stock price dipped inOctober, helping Ackman's portfolio.

Ackman is planning to make a new Herbalife presentationlater this month, two sources said.

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