January 25, 2018 / 11:02 PM / 6 months ago

Ackman made new bet on Nike, Namvar to transition to advisory board

NEW YORK (Reuters) - Billionaire investor William Ackman said on Thursday that his hedge fund Pershing Square Capital Management made a new bet on sportswear company Nike last year that has already earned his portfolio a roughly 30 percent return.

FILE PHOTO - William Ackman U.S. on November 10, 2015. REUTERS/Brendan McDermid/File Photo

For months the activist investor has been saying he had new ideas for his portfolio, and on Thursday he spoke about them publicly for the first time at his firm’s annual client dinner, an investor in the firm said.

At the dinner, Ackman also said that Ali Namvar, one of Pershing Square Capital Management’s most senior investment team members, will be moving to the firm’s advisory board.

Ackman, one of the world’s most closely watched activist investors whose bets have often helped push up a target company’s share price, bought Nike when it was trading around $53 a share. It closed trading on Thursday at $67.71.

The bet on Nike is unusual in that Ackman has no plans to push the company’s management to make changes, leaving it as one of his few “passive investments.”

Pershing Square, which oversees roughly $9 billion for clients, has suffered three years of losses, and Ackman plans to spend more time generating ideas and focusing on investments in a bid to help revive performance. He will leave the marketing of the firm, which often involves a lot of travel, to other partners, Reuters reported on Monday.

Nike previously caught the eye of other hedge funds. Hoplite Capital founder John Lykouretzos presented it to an industry conference in May as one of his best ideas, and said the stock price could double within three years amid strong international growth.

For years, any word from Ackman about new names often sent stock prices higher as investors expected him to push for better returns and possibly shake up management.

Ackman said Namvar, who is also a board member at portfolio company Chipotle Mexican Grill, will join Pershing Square’s advisory board in a few months, leaving the day to day investment business to pursue a second career in the music industry. He will continue to sit on the CMG board, Ackman said.

Namvar will be the first person to move to the hedge fund’s advisory board from its investment team. Several other members of the investment team have left the firm over the last years to run their own investment businesses.

Reporting by Svea Herbst-Bayliss; Editing by Daniel Wallis

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