Bill Ackman dumps investments in Berkshire Hathaway, Blackstone

Activist investor Bill Ackman said he has exited his investments in Warren Buffett's Berkshire Hathaway as well as his recently acquired investments in the Blackstone Group and Park Hotels & Resorts.

Ackman's Pershing Square Capital Management sold off Blackstone and Park Hotels because it wasn't able to build large enough positions at attractive prices before markets rebounded, he said in a conference call on Wednesday.

While the billionaire investor continues to view Berkshire as a sound investment, he said he believes recent market volatility might create better opportunities to deploy capital on higher-returning investments.

The markets are far different to when Pershing Square first disclosed its position in Berkshire in August 2019, he said.

"The one advantage we have versus Berkshire is relative scale," Ackman said. "Berkshire has the problem, if you will, of deploying $US130 billion [$197 billion] worth of capital."

Pershing Square, on the other hand, has about $US10 billion of capital to invest and therefore can be more nimble, Ackman said.

"We should take advantage of that nimbleness, preserve some extra liquidity, in the event that prices get more attractive again," he said.

Ackman is off to a strong start in 2020 despite the volatility in the market. Pershing Square has returned about 21 per cent on its investments through to May 19, according to the company's website. He said on the call on Wednesday they are now up 22 per cent to 27 per cent depending on the fund.

Those returns were bolstered by a credit hedge Pershing Square put in place as the outbreak of the coronavirus pandemic triggered a selloff in the market. The credit hedge returned about $US2.6 billion to Pershing Square, or roughly 100 times the original size of the investment, helping offset the declines in its portfolio companies.

Ackman used proceeds from the hedge to reinvest in some of its portfolio companies. Since then, he said shares in those companies have gained, in the case of Lowe's, by as much as 47 per cent from the price he purchased them at after the outbreak.

"We still think everything we own is undervalued," he said.

His one frustration was Pershing Square's investment in Chipotle Mexican Grilll because of the trading restrictions placed on the firm because it still has a representative on the board, he said.

"The downside to that is that Chipotle's stock reached a low in the last 60 days in the mid-$US400s. We were very frustrated that we couldn't buy stock at that price," he said.

Bloomberg