Bill Ackman’s Pershing Square Makes Key Moves with Nike and Brookfield, Despite Market Setbacks

Pershing Square Capital Management, the hedge fund led by Bill Ackman, made its first new investments in over a year during the second quarter of 2024, acquiring stakes in Nike and Brookfield, according to a Reuters report.

The report, based on a 13F regulatory filing released on Wednesday, reveals that Nike and Brookfield were the first additions to Pershing Square’s portfolio since the firm’s investment in Alphabet, Google’s parent company, in early 2023. The filing indicates that, as of June 30, Pershing Square, which manages roughly $17 billion in assets, acquired around 3 million shares of Nike and 6.8 million shares of Brookfield. These holdings represent approximately 0.19% of Nike and 0.34% of Brookfield.

Nike’s stock has faced significant challenges in 2024, with a 26% drop in value since the start of the year. However, the company saw a 4% increase in after-hours trading, fueled by speculation that an activist investor had acquired a substantial stake and might push for corporate changes. Nike is currently navigating slowed sales growth and rising competition from brands like Adidas, On Holding, and Hoka by Deckers. In response, the brand has begun offering more affordable products and increasing its marketing efforts, particularly surrounding the recent Olympics. Ackman previously made a $100 million profit from a passive investment in Nike in 2017, though his firm, known for its activist approach, might take a different strategy this time.

The 13F filing also discloses that Pershing Square reduced its position in Chipotle Mexican Grill by 23% during the second quarter, holding 28.8 million shares by June 30. This follows a significant rise in Chipotle’s stock price, largely driven by Ackman’s role in recruiting Brian Niccol as CEO in 2018. Niccol, who recently became the new CEO of Starbucks, was instrumental in Chipotle’s growth.

Additionally, Pershing Square reduced its stake in Alphabet, cutting its Class C shareholding by around 20% to 7.5 million shares and its Class A shares by 8.5% to 3.9 million shares.

As of early August, Ackman’s Pershing Square Holdings fund has experienced a 4.4% decline, while the broader stock market has surged by 15% since January. This marks a period of underperformance for the hedge fund relative to the market, despite its recent strategic moves.