Stock up 4%, narrowing to about 22% discount to last reported NAV.
Who knows, FTSE 100 inclusion + consummation of a deal at PSTH (as a reminder PSH gets the founders shares / right to invest more) may just get us into the more respectable mid teens discount range.
Fund manager Bill Ackman's Pershing Square Holdings is on the brink of being included in the U.K.'s blue chip FTSE 100 index, after delivering an impressive run of performance during the coronavirus pandemic.
The fund's share price has jumped by 116% to 2,459 pence (3,274 cents) on Nov. 30, from March 23 when it stood at 1,134 pence.
Over the past 12 months, the fund's share price is up 48% while the FTSE 100 index has fallen 10%.
"Shares in PSH have leapt partly due to deft choreography by CEO Bill Ackman's fund management team during the coronavirus crisis. Moves to hedge its equity portfolio just before the pandemic hit paid off when the market crashed in late March," said Susannah Streeter, senior investment and markets analyst at investment platform Hargreaves Lansdown.
Pershing Square hedged its portfolio in February after predicting that economic shutdowns were coming to Europe and the U.S. in line with China's experience of coronavirus.
Pershing Square bought "very large" numbers of credit default swaps on the assumption that U.S. and European credit spreads would widen when the expected lockdowns took place, according to a March 26 letter to investors.
"By March 12th, our CDS contracts had increased in value to $2.75 billion, and we began selling," the letter said.
A CDS is a derivative that allows an investor to swap their credit risk with that of another investor.
"The company has been waiting in the wings for some time, but there is a chance it could move from FTSE 250 understudy to a FTSE 100 performer," Ms. Streeter said.
Changes to the FTSE index will be announced on Dec. 2 based on closing prices on Dec. 1, with changes effective after close on Dec. 18.
To enter the FTSE 100 index, potential joiners have to number in the top 90 by market capitalization to ensure inclusion, and existing constituents have to drop outside the top 110 to guarantee demotion.
Entering the FTSE 100 can boost shares further, as funds that track the index are likely to include the new entrant's shares in their portfolios. It also brings a softer benefit; conferring upon constituents the prestige of being described in the media and elsewhere as a premium, "blue-chip" stock.