Billionaire investor Bill Ackman posted an 11% gain in March after turning $27 million into $2.6 billion with coronavirus bets
- Bill Ackman's Pershing Square made an 11.1% net gain in March after betting that markets would tank due to the novel coronavirus.
- The billionaire investor's hedge fund spent $27 million on hedges that surged in value to $2.6 billion during the market sell-off, balancing out declines in its equity portfolio.
- Pershing Square recorded a 3.3% net gain for the first quarter, a sharp rebound from its year-to-date loss of 7.1% at the end of February.
- Ackman denied that he deliberately scared investors to help his hedges last month,arguing that he was up front about Pershing Square's strategy.
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Bill Ackman's Pershing Square posted an 11.1% net gain in March after betting that the novel coronavirus would tank the stock market, according to its latest monthly report.
The billionaire investor's hedge fund spent $27 million on credit default swaps - which insure the buyer against an asset defaulting - on investment-grade and high-yield credit default swap indexes in February.
Those hedges ballooned in value to $2.6 billion after markets plunged last month, roughly offsetting Pershing Square's losses on its equity portfolio, Ackman said last week.
Pershing Square plowed more than $2 billion of the windfall into equities by March 18, before the stock market rallied. Its strategy delivered a 3.3% net gain for the first quarter, marking a sharp rebound from net losses in January and February.
The fund performed especially well in the final two weeks of March, given it was down 6.5% for the year on March 17. Indeed, its net asset value swelled 10% - from $25.19 to $27.72 - during that period.
Critics accused Ackman of manipulating markets last month after he warned of mass casualties, industries collapsing, and a deep recession during an emotional CNBC interview last month.
Ackman denied the claims in a letter to investors and a Twitter thread, arguing that he had been up front about Pershing Square's hedges and buying equities.
