October 25, 2018 / 7:42 AM / a month ago

Pershing Square checks into Hilton again with new stake

FILE PHOTO: William Ackman, founder and CEO of hedge fund Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York May 4, 2015. REUTERS/Brendan McDermid/File Photo

(Reuters) - Billionaire investor William Ackman has taken a stake in hotel operator Hilton Worldwide Holdings for the second time in two years after earning a 32 percent profit on his investment in 2017.

Ackman’s Pershing Square Capital Management hedge fund owns 10.9 million shares, or 3.7 percent, of the company, according to a filing made on Thursday.

Hilton shares hit a more than one-year low on Thursday on concerns over a slowdown in the hotel industry due to international trade worries.

Pershing Square, which invests $8.4 billion (£6.6 billion), said the 10.9 million Hilton shares purchased represent about 13.9 percent of the net asset value of Pershing Square Holdings (PSH.AS), the firm’s publicly traded hedge fund. Hilton has a market capitalisation of $19 billion (£14.8 billion).

Ackman, one of the industry’s most closely watched activist investors, originally started buying Hilton stock in 2016 and exited the position in 2017, he told investors last year. The size of that position was never disclosed, but a source familiar with the matter said it was smaller than the current position.

Ackman tends to invest in companies in which he can bring about change, but last year’s Hilton bet was a passive investment for Pershing Square

He has said nothing regarding his plans for Hilton this time around, saying only that investors would find out more next month when he holds an investor call.

Earlier this month, Pershing Square announced a $900 million position in Starbucks (SBUX.O), after having announced positions in Nike (NKE.N), United Technologies Corp (UTX.N) and Lowe’s Companies Inc (LOW.N) earlier this year.

Ackman is one few activist investors delivering top returns this year, with results up by double digits before this month’s market sell-off. Since January, his publicly traded hedge fund has gained roughly 6 percent through Tuesday.

Reporting by Svea Herbst-Bayliss in New York, Bhargav Acharya in Bengaluru and Dasha Afanasieva in London; Editing by David Goodman and Dan Grebler

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