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Bill Ackman makes a $1 billion bet on Lowe's

Activist investor Bill Ackman, the CEO of $8 billion Pershing Square, has built a $1 billion stake in home improvement retailer Lowe’s (LOW), according to a person familiar.

Ackman revealed the investment while speaking about activism and other topics at an M&A roundtable hosted by New York law firm Kirkland & Ellis. Dow Jones first reported the news.

William ‘Bill’ Ackman, CEO and Portfolio Manager of Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid

According to an attendee, Ackman discussed how Lowe’s has been a long-time direct competitor to Home Depot (HD). While comparing the two, Ackman argued that the opportunities for improvement were far greater at Lowe’s.

On Tuesday, Lowe’s announced a new CEO, hiring Marvin Ellison from JCPenney (JCP). Ackman is very supportive of the incoming CEO and praised Ellison’s track record at the Kirkland & Ellis event.

Ellison spent more than 12 years at Home Depot, where he was executive vice president of U.S. stores from 2008 to 2014. In that role, he led 2,000 stores with more than 275,000 employees and $65 billion in annual sales volume. Before that, he spent 15 years at Target. 

Ackman is not currently seeking a board seat. He thinks the board is taking the right steps to close the gap between Lowe’s and Home Depot.

Shares of Lowe’s were last up more than 10%.

In recent years, Pershing Square’s performance has been disappointing for investors. As of May 15, Pershing Square had returned 0.1%.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.