Pershing Square's hedging strategy has generated large profits that were generally reinvested in core holdings at lower valuations during market disruptions.

TRUE: Pershing Square's own reports and records show (a) more than one hedge that produced large profits, for example the 2020 credit protection hedge or interest-rate hedges, and (b) that the proceeds were generally put back into core holdings at depressed prices during market disruptions. MOSTLY TRUE: (a) and (b) both hold, but reinvestment is documented for only one major episode. MIXED: large hedge profits are documented, but there is little evidence they were reinvested in core holdings during market disruptions, or the profits were modest. MOSTLY FALSE: hedges produced only small profits or losses overall, apart from one episode. FALSE: the hedging programme lost money overall, and no large profit or reinvestment is documented.

Set before the research began.

1. E1 Dear Pershing Square Investor, Pershing Square Capital Management, L.P. (William A. Ackman) · 26 March 2020 Own record

   “By selling the hedge, we generated $2.6 billion of proceeds, the substantial majority of which we invested in both new and existing investments, which we believe will payoff as markets recover.”

2. E2 Dear Pershing Square Investor, Pershing Square Capital Management, L.P. (William A. Ackman) · 26 March 2020 Own record

   “We had turned bullish and we were in the process of investing about $2.5 billion in equities.”

3. E3 [PDF] Pershing Square Holdings, Ltd. 2023 Interim Report and Unaudited ... Pershing Square Holdings, Ltd. (filed via FCA National Storage Mechanism) Own record

   “Hedging gains have been a material contributor to our performance since March 2020 when the Pershing Square funds generated $2.6 billion of proceeds from our COVID-related hedge on an immaterial investment in CDS premiums.”

4. E4 Annual Investor Presentation Pershing Square Capital Management, L.P. · 9 February 2023 Own record

   “Across the Pershing Square funds, the interest rate hedging program generated approximately $2.7 billion in total proceeds in 2022”

Pershing Square's own records show two hedges with large profits. The March 2020 COVID-related hedge produced $2.6 billion of proceeds (E1, E3), and the 2022 interest-rate hedging programme produced about $2.7 billion (E4). Reinvestment is documented only for the 2020 episode: E1 says the substantial majority of the $2.6 billion went into new and existing investments that the manager expected to pay off as markets recover, and E2 says the manager was in the process of investing about $2.5 billion in equities. None of the evidence shows what was done with the 2022 proceeds, so under the criteria the claim is mostly true.